Premier Building and Consulting Pty Ltd v Spotless Group Ltd (Ruling No 9)

[2006] VSC 506

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST

No. 8264 of 2003

PREMIER BUILDING AND CONSULTING PTY LTD (ACN 066 568 367)	Plaintiff
V
SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS	Defendants

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IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST

No. W9/2004

PREMIER BUILDING AND CONSULTING PTY LTD (ACN 066 568 367)	Applicant
V
SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS	Respondents

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IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST

No. W61/2005

NORTH SUBURBAN PROPERTIES PTY LTD (ACN 065 883 614)	Applicant
V
SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS	Respondents

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATE OF RULING:	21 December 2006
CASE MAY BE CITED AS:	Premier v Spotless (No 9)
MEDIUM NEUTRAL CITATION:	[2006] VSC 506

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Applicant (Premier)	Mr J Burnside QC with Mr T Boston	Gadens Lawyers
For the First, Third and Ninthnamed Defendants (Spotless parties)	Mr S G Finch SC with Mr T J Walker and Mr J Slattery	Freehills
For the Secondnamed Defendant/Applicant (North Suburban)	Mr M Dreyfus QC with Marita Foley	Mirabelli, D’Ortenzio & Co
For the Fourthnamed Defendant (Collie)	Mr R Manly SC with Mr M Whitten	Monahan + Rowell
For the Fifthnamed Defendant (Keen)	Mr J Gobbo QC with Mr D Aghion	Deacons
For the Sixth Defendant  (Moreland)	Mr R Macaulay SC with Dr A Hanak	Moray & Agnew
For the Seventh Defendant (Kilpatrick)	Mr J R Dixon with Ms R Doyle	Slater & Gordon
For the Eighth Defendant (McMullin)	Mr G Uren QC with Mr Parmenter	Mallesons Stephen Jaques
For the Tenth Defendant (McKenzie)	Mr J Davis with Mr J Lewis	Tresscox
For the Third Party  (Burkett)	Mr W Lally QC with Mr J Nixon	Mills Oakley

HIS HONOUR:

1. In this application Premier seeks to be relieved of its implied obligation as to certain documents produced in this litigation for the purposes of disclosing them to prospective purchasers of the Premier land.  The documents comprise 37 documents set out in a schedule entitled “Index of CD” as at 13 December 2006.  Documents 1 to 12 inclusive raise no difficulty.  They are the pleadings in these proceedings and certain documents of a public nature relating to the Premier land and the Spotless land. 

1. The debate before me concerned the remaining documents in the list which I group under the following headings:

(1)       Premier’s own witness statements and material in support;

(2)Witness statements and material in support produced to Premier as part of the court process;  (a), which have been tendered in evidence;  (b), which have not been tendered in evidence.

1. The trial has been running since early October.  Relatively early in the trial, on 6 November 2006, counsel for Premier land announced their client’s intention to sell the Premier land, if possible, on an as is basis and thereby quantify part of its suggested loss.  As part of the sale documentation it was announced at transcript 1810 that the prospective purchasers would be provided with the competing opinions of the various witnesses as to the condition of the land.

1. The contract document has now been advanced and the schedule to which I have referred describes the documents to be provided.  It should be noted that those expert reports and witness statements refer to and rely upon source material which has come to light as part of the investigation of the site and part of the court interlocutory process.  I should add too that this source material runs for many hundreds of pages in the court book.

1. Next I observe that Premier is in receivership.  The proposed sale is by Perpetual Nominees Limited, its mortgagee, exercising a power of sale.  The application has come on for hearing in somewhat of a hurry given the pending holiday season.

1. The draft contract, with an earlier draft schedule, was distributed to the Spotless parties, North Suburban and Kilpatrick on 4 December 2006.  On 11 December 2006 the drafts were sent to McKenzie, Collie and Keen.  The revised schedule was, on 13 December, sent to the Spotless parties, Collie, Keen, Kilpatrick and McKenzie.  On 15 December the consent of Moreland and McMullin was sought to the disclosure of the reports of their experts.

1. The current positions of the defendants to the Premier application appears to be as follows:  all parties complain about short notice of the application.  It seems that notice was given yesterday, if at all.  North Suburban and McMullin do not object to the proposed orders.  McKenzie and Burkett did not appear.  It is unlikely that the documents in question emanate from them.  The application is opposed by the Spotless parties, Collie, Moreland and Kilpatrick.

1. Keen’s position is that it has no objection to the statement of its witness, Mr Throssell, being disclosed but it wants to be paid 50 per cent of the costs of its obtaining his report.

1. Finally, I mention that of the eight defendants and one third party, Premier has settled with Keen, Moreland and McMullin.  It makes no claim against McKenzie which was joined as a defendant by Keen for apportionment purposes.  The remaining parties to the litigation and the VCAT proceedings therefore are Premier, Spotless parties, North Suburban, Kilpatrick and Collie.  Keen and McKenzie remain parties for apportionment purposes only;  no relief is sought against them.

1. No party in terms seeks an adjournment.  Nevertheless, they all complain of the want of sufficient notice.  As I have mentioned, the fact that the witness statements were intended to be deployed at the sale was first mentioned early in the trial on 6 November and the documents have been in the hands of all opposing parties, except Moreland, since early December.  There is a degree of urgency about the matter and I shall proceed to determine the application.

1. Premier’s own reports.  In these reasons I refer to a witness statement, or an affidavit or report or witness statement of an expert witness simply as a report of that witness.  I can see no difficulty with respect to the reports of Premier’s own witnesses.  What use it makes of them is a matter between it and its witnesses.  There remains the question as to the documents which form part of these reports and which have been obtained under the coercive process of the litigation.  This supporting material has not been identified, nor has its source been identified.  Each of the witnesses responsible for these reports has given evidence and their reports and the supporting material are in evidence at the trial.  My familiarity with this material does not give rise to any concern on my part that the interests of a party producing this supporting material will in any way be disadvantaged.  I will grant relief as sought with respect to these reports and the supporting material.

1. The defendants reports.  The reports which have been verified by the witnesses and tendered in evidence are no longer subject to the restraint which arises on their receipt by Premier (British American Tobacco v Cowell)[1]  These are the reports of Mr Clarke, exhibit 77;  Mr McFarlane, exhibit 86;  Mr Parker, exhibit 90;  Mr Hancock, exhibits 50 and 51;  Dr Bazelmans, exhibit 39.  This list includes Mr Hancock’s summary of data and observations and his report on this which are both part of exhibit 50.  Again, my familiarity with the supporting material does not raise any concerns about these documents.  I note too that these reports contain disclaimers which appear to be directed to avoiding liability for any error in favour of third parties. 

   [1](2003) 8 VR 571 at paras [42] and [43].

1. More difficult is the position of the two reports of Mr Throssell, prepared for Keen, Mr Nash prepared for Moreland, and Mr Ormerod, prepared for the Spotless parties and the third report of Mr Hancock.  None of these has been deployed at trial.  I am told that the reports of Mr Nash and Mr Ormerod do not contain any disclaimer.

1. I have not had the benefit of any detailed argument with respect to these reports, nor am I familiar with the detail of their contents.  It was put on behalf of Premier that I should nonetheless permit them to be released because the sale is indirectly part of the litigation and because the prospective purchasers will be bound by a confidentiality agreement.  To this may be added the practical consideration and the cost of remediation.  These opinions will tend to depress the sale price.

1. It may be supposed that the reports of the defendants will tend to the contrary, so that the withholding of them from the prospective purchasers will tend to maximise Premier’s capital loss.  A defendant could then hardly be heard to criticise the price obtained when it withheld material which might have affected that price.  This, however, is a matter which must await the completion of the evidence and final addresses.

1. I have had no regard to the submission that Premier should agree to pay Keen a portion of the cost of Mr Throssell’s reports.  If, as was contended, it would thereby obtain a windfall in circumstances entitling Keen to restitution and relief, this must await another day, possibly in another proceeding.  My concern is with the respect for the privacy of the documents and their source and the integrity of the court process.  Given the attitude of Keen that, subject to payment, it has no objection to the release of Mr Throssell’s reports, I will permit their release.

1. This then leaves the reports of Mr Nash of Moreland and Mr Ormerod and Mr Hancock, all witnesses for the Spotless parties.  I am mindful that the proposed vendor is not a party to the proceeding;  it is the mortgagee.  This is a factor which was mentioned in Cowell’s case as a matter for consideration.

1. Nevertheless, Premier does have an interest in obtaining a fair, if not the best price, for the Premier land.

1. I accept that the legitimate interests of the objecting parties is sufficiently protected by the insertion of the confidentiality agreement.  In the circumstances I will make the orders sought.