Prentice & Barila v Treetop Projects Ltd (No 2)

[2006] NSWSC 1053

CITATION:	Prentice & Barila v Treetop Projects Ltd (No 2) [2006] NSWSC 1053
HEARING DATE(S):	04/10/06
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	10/04/2006
DECISION:	Applicants and plaintiff in District Court proceedings released from implied undertaking and granted relief to search Supreme Court file under supervision of Associate for any other documents for which a release might be sought.
CATCHWORDS:	PROCEDURE - Discovery and Interrogatories - Implied undertaking not to use documents or contents for any collateral or ulterior purpose - Defendants in District Court proceedings seek release to use affidavits in those proceedings - Affidavits not read in open court - Commonality of issues between proceedings - Parties to Supreme Court proceedings in liquidation or deregistered - One deponent the former liquidator, the other a director who did not oppose the application
CASES CITED:	Moage Ltd v Jagelman and Others [2002] 43 ACSR 173 Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217
PARTIES:	Maxwell William Prentice & Vincent Christopher Barila (in their capacity as liquidators of Tumut River Orchard Management Ltd) (in liq) - 1st Plaintiff Tumut River Orchard Management Ltd (in liq) - 2nd Plaintiff Treetop Projects Ltd (under external administration) - Defendant Chandelle Nominees Pty Ltd - Applicant HP Mercantile Pty Ltd - Respondent
FILE NUMBER(S):	SC 4133/99
COUNSEL:	Mr M Einfeld QC with Mr J Stephenson - Applicant
SOLICITORS:	G J Gooden Solicitor - Applicant Mr Peter Ton, Verace Mckenzie Lawyers Pty Ltd - Respondent

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

WEDNESDAY 4 OCTOBER 2006

4133/99 MAXWELL WILLIAM PRENTICE & ANOR v TREETOP PROJECTS LTD (UNDER EXTERNAL ADMINISTRATION)(No. 2)

EX TEMPORE JUDGMENT

1 HP Mercantile Pty Ltd has commenced proceedings in the District Court to recover debts alleged to be due to it by Chandelle Nominees Pty Ltd, Peter Thomas and Adrian Hobson. The defendants to those proceedings seek leave to use in relation to the conduct of those proceedings documents filed in these Supreme Court proceedings including, without limitation, an affidavit of Maxwell William Prentice sworn on 2 August 2000 and the documents annexed to it and an affidavit of Andrew Charles Purcell sworn on 18 May 2000 and the documents annexed to that affidavit.

2 The proceedings in the Supreme Court arose with respect to investment projects involving Tumut River Orchard Management Ltd and related companies, the TROM group. Investors borrowed funds to invest in the projects from Treetop Finance Pty Ltd. That company assigned its loan book to TROM, the liquidators of which were the plaintiffs in these proceedings. TROM purported to assign the loans to Treetop Projects Ltd which purported to assign them to Merilbah Investments Pty Ltd, which purported to assign them to HP Mercantile.

3 One of the issues which was before the Supreme Court in these proceedings was the validity of the second of the assignments. What is in issue in the District Court is, again, the validity of the second of those assignments, it being said there was no consideration for it. There is also an issue in the District Court as to whether or not a debt was incurred because of an alleged failure to comply with the requirements of the loan documentation.

4 The general principle in relation to documents produced on discovery in court proceedings is that there is an implied undertaking that they are not to be used for any collateral or ulterior purpose and their purpose is confined to the proceedings in question. The undertaking extends to the information derived from the documents.

5 I have had cause to analyse the authorities in relation to this issue in Moage Ltd v Jagelman and Others [2002] 43 ACSR 173 at [10] to [17]. The public interest in maintaining confidentiality with respect to documents and confining their use to the proceedings changes once a document has been read in open court. It loses its confidentiality and loses the protection of the undertaking.

6 The Supreme Court proceedings were settled and neither affidavit was read in open court.

7 As a general rule a court will not release or modify the implied undertaking save in special circumstances and where the release or modification will not occasion injustice to the person providing the document or information in question.

8 The question is whether special circumstances exist in this case that should override the public interest in the administration of justice that goes to preserve the confidentiality of documents.

9 One of the matters that has been said to constitute special circumstances is the commonality of issues between the two sets of proceedings (Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 223-224).

10 In the instant circumstances, there is the commonality of issue that I have described. It also seems to me that there is an absence of apparent injustice to the parties in the Supreme Court proceedings.

11 The plaintiff and the defendant are in liquidation. A former plaintiff has been deregistered.

12 There also seems to me to be little prejudice that could be suffered by the deponents to the affidavits. Mr Purcell was not a party to the Supreme Court proceedings nor is he a party in the District Court proceedings. He was a director of each of the companies in the TROM group. The affidavit was no doubt prepared by him with a view to its being read in open court in the Supreme Court proceedings. One would expect that the interests of justice should ensure consistency between the affidavit in the Supreme Court proceedings and any evidence that Mr Purcell would be likely to give in the District Court proceedings. Furthermore he has addressed a letter to the registrar of the Supreme Court saying he has no objection to the release of the documents for use in the matters, the matters being the proceedings in the District Court.

13 Mr Prentice was one of the liquidators of TROM. He is no longer in practice. There would appear to be no prejudice to him in relation to any use of his affidavit in the District Court proceedings.

14 It is a matter of weighing up various competing interests of justice and in this case it seems to me that the pendulum swings significantly in favour of releasing the parties from the implied undertaking with respect to the two affidavits.

15 HP Mercantile is represented on this motion and the submission is made on its behalf that it should have access to the documents which are released by the court from the implied undertaking, and I propose to relieve both HP Mercantile and the applicants from the undertaking in respect of the two affidavits.

16 The application for access to the remainder of the Supreme Court file is governed by Practice Note SC Gen 2. It states in par 7 that access will normally be granted to non-parties in respect of, relevantly for present purposes, material that was admitted into evidence unless a judge considers that the material should be kept confidential.

17 The practice note also prescribes in par 5 that a person may not search in a registry for, or inspect any document or thing in, any proceedings except with the leave of the court. There is no further statement in the practice note with respect to a judge allowing access to non-parties.

18 In my view, however, access should be made available if it is in the interests of justice to do so. For the reasons already expressed, I have taken the view that there are two documents on the court file to which special circumstances apply sufficient to relieve the parties on both sides of the District Court proceedings from the implied undertaking with respect to them. That being so, there may be other documents on the file for which similar relief should be granted. I propose, therefore, to allow the applicants and HP Mercantile access to the Supreme Court file under the supervision of my Associate in order to determine whether either side wishes to make a further application to be released from the implied undertaking with respect to other documents on the file.

19 I release the applicants and HP Mercantile Pty Ltd from the implied undertaking not to use the affidavit of Maxwell William Prentice sworn on 2 August 2000 and the documents annexed to that affidavit and the affidavit of Andrew Charles Purcell sworn on 18 May 2000 and the documents annexed to that affidavit for any collateral or ulterior purpose and grant them leave to use the documents and information contained in them in relation to the conduct of District Court Proceedings numbered 2902 of 2003, 2614 of 2003 and 2909 of 2003. I grant the applicants followed by HP Mercantile Pty Ltd access to the Supreme Court file in this matter under the supervision of my Associate to search for such other documents for which an application for release from the implied undertaking may be sought. I stand the matter over before the Duty Judge at 10.00 am on Friday 6 October 2006.

**********