Platinum Systems Resourcing Pty Ltd v NRW Holdings Ltd [No 3]

[2013] WASC 402

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PLATINUM SYSTEMS RESOURCING PTY LTD -v- NRW HOLDINGS LTD [No 3] [2013] WASC 402

CORAM:   LE MIERE J

HEARD:   25 OCTOBER 2013

DELIVERED          :   8 NOVEMBER 2013

FILE NO/S:   CIV 1894 of 2013

BETWEEN:   PLATINUM SYSTEMS RESOURCING PTY LTD

First Plaintiff

LEANNE CURTIS
Second Plaintiff

ZILIA KORPAS
Third Plaintiff

NICOLA WILSON
Fourth Plaintiff

CORINNE LENDON
Fifth Plaintiff

AND

NRW HOLDINGS LTD
First Defendant

KIMBERLY HYMAN
Second Defendant

MARK WALLACE
First Third Party

SUSAN WORRALL

Second Third Party

(BY ORIGINAL ACTION)

NRW HOLDINGS LTD
First Plaintiff by Counterclaim

AND

PLATINUM SYSTEMS RESOURCING PTY LTD
First Defendant by Counterclaim

LEANNE CURTIS
Second Defendant by Counterclaim

MARK WALLACE
Third Defendant by Counterclaim

SUSAN WORRALL
Fourth Defendant by Counterclaim

(BY COUNTERCLAIM)
 

Catchwords:

Practice and procedure - Application for leave to use affidavit sworn in one action in another action - Implied undertaking not to disclose documents obtained in a proceeding for a collateral purpose - Whether special circumstances

Legislation:

Nil

Result:

Application granted

Category:    B

Representation:

Original Action

Counsel:

First Plaintiff                :     Mr M L Bennett

Second Plaintiff            :     Mr M L Bennett

Third Plaintiff               :     Mr M L Bennett

Fourth Plaintiff             :     Mr M L Bennett

Fifth Plaintiff                :     Mr M L Bennett

First Defendant             :     Mr B H Taylor

Second Defendant         :     Mr B H Taylor

First Third Party           :     Mr L F Swanson

Second Third Party       :     Mr L F Swanson

Solicitors:

First Plaintiff                :     Bennett + Co

Second Plaintiff            :     Bennett + Co

Third Plaintiff               :     Bennett + Co

Fourth Plaintiff             :     Bennett + Co

Fifth Plaintiff                :     Bennett + Co

First Defendant             :     Rockwell Olivier

Second Defendant         :     Rockwell Olivier

First Third Party           :     Hotchkin Hanly

Second Third Party       :     Hotchkin Hanly

Counterclaim

Counsel:

First Plaintiff by Counterclaim     :        Mr B H Taylor

First Defendant by Counterclaim    :        Mr M L Bennett

Second Defendant by Counterclaim :        Mr M L Bennett

Third Defendant by Counterclaim   :        Mr L F Swanson

Fourth Defendant by Counterclaim :        Mr L F Swanson

Solicitors:

First Plaintiff by Counterclaim     :        Rockwell Olivier

First Defendant by Counterclaim    :        Bennett + Co

Second Defendant by Counterclaim :        Bennett + Co

Third Defendant by Counterclaim   :        Hotchkin Hanly

Fourth Defendant by Counterclaim :        Hotchkin Hanly

Case(s) referred to in judgment(s):

Crest Homes Plc v Marks [1987] 1 AC 829

Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10

Hearne v Street (2008) 235 CLR 125

Juman v Doucette [2008] 1 SCR 157

Laen Pty Ltd v At The Heads Pty Ltd [2011] VSC 315

Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283

Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217

1. LE MIERE J:  The plaintiffs have applied for leave to use the affidavit sworn in this action by Kimberly Hyman on 13 September 2013 in civil action CIV 2026 of 2013 between the plaintiffs and Ben Roestenburg.  The application is opposed by the defendants.

The proceedings

1. The first defendant, NRW Holdings Ltd (NRW), is a public company listed on the Australian Securities Exchange which carries on the business of providing mining and engineering services.  The plaintiff, Platinum Systems Resourcing Pty Ltd (Platinum), is a company that carries on the business of providing technology consultant services and job placements in technology projects.  On 12 April 2012 NRW and Platinum entered into an agreement, or purported to do so, called the Master Services Agreement.  Under the Master Services Agreement Platinum agreed to provide consultancy services to NRW.  Between April 2012 and May 2013 Platinum provided consultants to carry out work for NRW.  Platinum rendered invoices to NRW.  NRW has refused or failed to pay some of the invoices.  Platinum claims that NRW is indebted to Platinum in the sum of $1,093,955.50 which is the amount of the unpaid invoices.

2. NRW filed a defence which raised a number of defences and a counterclaim.  That defence pleads that the second to fourth defendants by counterclaim, Ms Worrall, Mr Wallace and Ms Curtis, agreed to participate in a dishonest and fraudulent scheme and carried it out.  Mr Wallace and Ms Worrall were the Chief Financial Officer and the Chief Information Officer respectively of NRW.  Ms Curtis is an information technology consultant retained by Platinum and was engaged by NRW through Platinum as the Applications Programme Manager for a project and was responsible for procuring IT consultants for the project and approving timesheets submitted by IT consultants engaged by NRW to assist with the project on behalf of NRW.  Ms Curtis reported to Ms Worrall.  The scheme is said to involve the incorporation of a company, Platinum, controlling the company and entitlement to its profit through arrangements with family members and friends who became officers of the company, procuring NRW to engage the company to provide services to NRW and to pay for those services at such rates as they determined regardless of whether the rates were in excess of those that could be properly and reasonably payable for such services, causing NRW to pay the amounts invoiced by the company without proper scrutiny and not disclosing their connection with, and control of, the company to NRW.  The defence was struck out in part but the essential allegations made by NRW remain.

3. Ms Curtis is the second plaintiff.  The third to fifth plaintiffs, Ms Korpas, Ms Wilson and Ms Lendon, were at various times directors of Platinum.  The defendant says that Ms Korpas is Ms Curtis' sister‑in‑law, Ms Wilson is Mr Wallace's sister and Ms Lendon is a friend of Ms Worrall.

4. Platinum entered into a consultancy agreement with Ben Roestenburg, the defendant in CIV 2026 of 2013, pursuant to which Mr Roestenburg agreed to take up the position as Change Manager at NRW.  The plaintiffs say that in April 2013 Mr Roestenburg telephoned Willie Rooney, the managing Director of NRW, and made allegations including that Ms Curtis had a personal relationship with Platinum and had not disclosed this to him at the time he was engaged as a Platinum consultant, and that Platinum was a front company only set up to earn money from NRW and was a family business of Ms Curtis.  The plaintiffs say that Mr Roestenburg repeated the allegations in a telephone conference with Mr Wallace and Mr Rooney.

5. The second defendant, Kimberly Hyman, is the Company Secretary of NRW.  On 24 May 2013 Mr Hyman sent an email to Ellen Rogers of Platinum.  The plaintiffs say that the email is defamatory of Ms Curtis, Ms Korpas, Ms Lendon and Ms Wilson and gives rise to the imputation that each of them had engaged in fraudulent activities.

CIV 2026 of 2013

1. The plaintiffs in this action are also the plaintiffs in CIV 2026 of 2013.  The defendant is Mr Roestenburg.  In that action Platinum pleads that it provided consultants to NRW pursuant to the Master Services Agreement and that Mr Roestenburg entered into a consultancy agreement with Platinum pursuant to which he took up the position as Change Manager at NRW.  The plaintiffs plead that Mr Roestenburg made allegations to Mr Rooney and repeated the allegations in a telephone conference with Mr Wallace and Mr Rooney.  The plaintiffs say that the allegations made by Mr Roestenburg are defamatory and give rise to the imputations that:

   1.Ms Curtis deliberately withheld relevant information that she was obliged to disclose to NRW Holdings and Mr Roestenburg;

   2.Ms Curtis acted unethically in her dealings with NRW Holdings and Mr Roestenburg;

   3.Platinum was nothing more than a shell company set up for the sole purpose of unlawfully extracting money from NRW Holdings;

   4.Platinum has no legitimate commercial purpose;

   5.Each of the defendants and all of them were corrupt in their dealings with NRW Holdings;

   6.Each of the defendants and all of them were deceitful in their dealings with NRW Holdings;

   7.Each of the defendants and all of them engaged in fraudulent activities in their dealings with NRW Holdings.

2. The plaintiffs in CIV 2026 of 2013 also plead that Mr Roestenburg tortiously interfered with the Master Services Agreement between Platinum and NRW.  The plaintiffs also plead that Mr Roestenburg disclosed to Mr Rooney confidential information in breach of his duty of confidentiality.

3. Mr Roestenburg has filed a defence.  He admits making some of the allegations to Mr Rooney but not others.  He denies making the allegations in a telephone conversation to Mr Wallace and Mr Rooney and says he did not speak to Mr Wallace at that time.  Mr Roestenburg says that if what he said to Mr Rooney was defamatory then the statements were made on an occasion of qualified privilege.  Mr Roestenburg denies disclosing confidential information.

The Hyman affidavit

1. Platinum has applied for partial summary judgment.  Mr Hyman swore an affidavit on 13 September 2013 in opposition to Platinum's application for partial summary judgment.  The affidavit has been filed and served on the plaintiffs.  The application for summary judgment has not been heard and the affidavit has not been read in court or in chambers.

2. In the affidavit Mr Hyman says the following things.  On 29 April 2013 Mr Roestenburg resigned from NRW.  On 7 May NRW's CEO Jules Pemberton told Mr Hyman that he had a brief conversation with Grant Gibson of Deutsche Bank about Mr Roestenburg and the ownership of Platinum.  At Mr Pemberton's request Mr Hyman phoned Mr Roestenburg.  Mr Roestenburg told Mr Hyman that he had discovered that Mr Mercovich was Ms Curtis' son and he thought that Platinum was Ms Curtis' family business.  Later that day Mr Hyman had a conversation with Mr Rooney.  Mr Rooney told Mr Hyman that Mr Roestenburg had seen him the previous week and said that he had resigned because he had discovered that Mr Mercovich was Ms Curtis' son and Ms Curtis was somehow involved in the Platinum business and he felt uncomfortable working under such an arrangement.  Mr Rooney said that he had discussed what Mr Roestenburg had told him with Mr Wallace and that Mr Wallace had produced an ASIC company search of Platinum and said to Mr Rooney that the search showed there was no involvement by Ms Curtis or Mr Mercovich in Platinum.  Mr Hyman then goes on to describe steps he took to investigate Platinum.

Legal principles

1. In Hearne v Street (2008) 235 CLR 125 the plurality of the High Court expressed the relevant legal principle as follows:

   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 [96].

   The plurality said that 'it is common to speak of the obligation as flowing from an "implied undertaking"' [97].

2. It is common ground that the plaintiffs are bound by the obligation, or implied undertaking, not to use the Hyman affidavit for any purpose other than prosecuting this action and, in particular, are bound not to use it, or information in it, in CIV 2026 of 2013 unless given leave to do so by this court.  I am satisfied that the obligation applies to the Hyman affidavit.  NRW and Mr Hyman were made subject to the court's processes because the plaintiffs brought an application for partial summary judgment against NRW.  The court's processes required any evidence that they wished to put in opposition to the application to be adduced in the form of an affidavit which was to be filed and served on the plaintiffs.  The Hyman affidavit was served pursuant to a court order that any affidavits on which NRW relied in opposition to the application for summary judgment be filed and served by a particular date.  This is sufficient to meet the requirement of compulsion.  The obligation or implied undertaking attached to the affidavit:  see Laen Pty Ltd v At The Heads Pty Ltd [2011] VSC 315 [8] (Davies J).

3. In Hearn v Street the plurality of the High Court said:

   The importance with which the courts have viewed the obligation under discussion is indicated by the fact that although it can be released or modified by the court, that dispensing power is not freely exercised, and will only be exercised where special circumstances appear [107].

   It appears from the authority cited by the plurality, Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10, 37, and from the authorities there cited that the source of the principle that leave will only be given in special circumstances is the decision of the House of Lords in Crest Homes Plc v Marks [1987] 1 AC 829. In Crest Homes Lord Oliver, with whom the other members of the House of Lords agreed, referred to reported cases in which an application had been made to be released from the implied undertaking and continued:

   I do not, for my part, think that it would be helpful to review these authorities for they are no more than examples and they illustrate no general principle beyond this, that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery.  As Nourse LJ observed in the course of his judgment in the instant case (ante, p840G), each case must turn on its own individual facts.  In the instant case, the determinative point to my mind is that it is purely adventitious that there happened to be two actions.  That has been brought about partly by purely technical considerations and partly, as Crest allege, by the appellants' failure to make full and frank disclosure under the 1984 order, and the fact that the parties to the two actions are not identical is quite immaterial.  The cause of action is the same in each and the first and second appellants are defendants in both (860).

4. In Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 Branson, Sundberg and Allsop JJ said:

   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 [31].

5. All the circumstances of the case must be considered in exercising the discretion whether to release a party from the undertaking or obligation.  Nevertheless the case law provides some guidance to the exercise of the court's discretion.  In Juman v Doucette [2008] 1 SCR 157 in the Supreme Court of Canada Binnie J said:

   Where discovery material in one action is sought to be used in another action with the same or similar parties and the same or similar issues, the prejudice to the examinee is virtually non‑existent and leave will generally be granted.

   The authorities quoted by Binnie J in support of that proposition include Crest Homes.  Where the purpose of the release from the obligation is for use in another proceeding, commonality between the proceedings may be a sufficient factor to warrant the exercise of the dispensing power:  Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217, 224 (Willcox J). In Laen Davies J said:

   … The mere fact of commonality of subject matter may be sufficient to establish that the party has a legitimate forensic purpose for the use of the material in the second proceeding, but the test is not commonality of subject matter. Generally, use in a subsequent proceeding would not be an improper use of material previously obtained subject to an implied undertaking, unless that material was obtained in the first proceeding for an ulterior purpose [10].

Leave should be granted

1. There are special circumstances in this case which enliven the discretion to grant leave to use the Hyman affidavit in CIV 2026 of 2013 and which make it appropriate to exercise that discretion to grant leave.  First, the affidavit is sought to be used in another action with the same plaintiffs.  Secondly, there is a degree of commonality between subject matters of the proceedings.  The subject matter of both actions is or relates to the provision of consultants by Platinum to NRW under the Master Services Agreement, the relationship between the plaintiffs and Mr Wallace and Ms Worrall and the allegations alleged to have been made by Mr Roestenburg to Mr Rooney.  Those allegations are the foundation of the claim in defamation in CIV 2026 of 2013 and are relevant to the allegedly defamatory email sent by Mr Hyman to Ms Rogers which founds the defamation claim in this action.  In CIV 2026 of 2013 Mr Roestenburg has pleaded qualified privilege.  He says that he made the allegations, or such of them as he did make, to Mr Rooney who had an interest or apparent interest in receiving information concerning Ms Curtis' connection to Platinum.  Mr Roestenburg pleads that his conduct in doing so was reasonable in the circumstances.  Mr Hyman's affidavit discloses that what Mr Roestenburg said to Mr Gibson of Deutsche Bank about the ownership of Platinum caused Mr Pemberton to ask Mr Hyman to look into what was going on.  It is reasonable to infer that the fact that Mr Roestenburg spoke to Mr Grant about the ownership of Platinum, which caused Mr Grant to inform Mr Rooney that Mr Roestenburg has spoken to him about the ownership of Platinum, is information which might enable the plaintiffs to damage Mr Roestenburg's case of qualified privilege or may fairly lead the plaintiffs to a train of inquiry which may advance their case or damage Mr Roestenburg's.

2. Thirdly, the defendants do not claim that the information in Mr Hyman's affidavit is confidential.  Fourthly, Mr Hyman included the information in his affidavit which was prepared for the purpose of use in the plaintiffs' application for partial summary judgment.  That is, the defendants anticipated that the affidavit would be read in court whereupon the information would pass into the public domain and the plaintiffs would be free to use the information in the affidavit for purposes other than this action.

3. Fifthly, there is a public interest in the information in Mr Hyman's affidavit which relates to matters which will be traversed in CIV 2026 of 2013 being available to the plaintiffs in that action.  The public interest in getting at the truth in CIV 2026 of 2013 outweighs the defendants' privacy interest in the Hyman affidavit not being used for purposes other than this action.  Sixthly, it has not been demonstrated that the use of the Hyman affidavit by the plaintiffs in CIV 2026 of 2013 will cause any harm or prejudice to the defendants in this action.

Conclusion

1. For the reasons stated the plaintiffs will be given leave to use the Hyman affidavit in CIV 2026 of 2013.