Principal Financial Group Pty Ltd v Vella - [2011] NSWSC 327

Supreme Court

New South Wales

Medium Neutral Citation: Principal Financial Group Pty Limited ACN 068 318 507 v Gabriel Joseph Vella [2011] NSWSC 327
Hearing dates: 14 April 2011
Decision date: 15 April 2011
Jurisdiction: Equity Division
Before: Ball J
Decision:
Application dismissed with costs

Catchwords: PROCEDURE - interlocutory issues - Anton Pillar orders - duty of full disclosure in ex parte applications - whether failure to notify of links to independent computer expert breach of duty - whether should exercise discretion to set aside order
Cases Cited: Brags Electric Ltd v Gregory [2010] NSWSC 1205
Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213
Thomas A Edison Ltd v Bullock [1912] HCA 72 (1912) 15 CLR 679
Category: Procedural and other rulings
Parties: Principal Financial Group Pty Ltd (First Plaintiff)
King Financial Group (NSW) Pty Ltd (Second Plaintiff)
Gabriel Joseph Vella (First Defendant)
Taurean Financial Planning Pty Ltd (Second Defendant)
Representation: Counsel:
RRI Harper SC / T D Anderson (Plaintiffs)
MF Holmes QC / DCP Stewart (First Defendant)
Solicitors:
LFS Lawyers (First and Second Plaintiff)
Aitken Lawyers Pty Ltd (First Defendant)

File Number(s): 2011/097213

Judgment

The plaintiffs carry on a financial planning business. The first plaintiff (PFG) holds an Australian Financial Services Licence and the second plaintiff (KFG) is one of its authorised representatives.

From about 21 January 2008 the first defendant, Mr Vella, worked as a financial planner in the business carried on by KFG, although there is an issue about precisely which entity employed him. For the purposes of the present application, nothing turns on the resolution of that issue. After taking up his employment, Mr Vella was appointed an authorised representative of PFG.

In January this year Mr Vella decided to leave KFG. There is a dispute about the circumstances in which that came about, but again it is not necessary for the purposes of this application to resolve that dispute. Not long after leaving KFG, Mr Vella commenced employment as a financial planner with the second defendant, Taurean.

After Mr Vella left his employment with KFG or one of its associated entities, KFG discovered that a number of hard copy files relating to clients for whom Mr Vella had been responsible were missing. In addition, the computer records in respect of a number of those clients had been altered by changing the names of the clients to which the records related making it difficult to locate the electronic records for those clients.

Based on this evidence and some other evidence, the plaintiffs made an ex parte application for search orders against the defendants. Those orders were granted by White J on 24 and 25 March 2011. The orders were based on the model orders set out in Practice Note SC Gen 13. Order 3 provided:

You may apply to the court at any time to vary or discharge this order; including, if necessary, by telephone to the Duty Judge (phone number 9230 8025).

Order 12 relevantly provided:

Before permitting entry to the premises…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] NSWSC 327
Decision Date: 15 April 2011

CaseChat Overview and Summary

Principal Financial Group Pty Ltd sought an interlocutory Anton Pillar order against Vella, which was granted ex parte. The order required Vella to preserve documents located on a computer, which had been seized by officers of Principal Financial Group Pty Ltd. The purpose was to prevent destruction or alteration of the documents. The nature of the dispute involved allegations of breach of contract and fiduciary duty by Vella. The case was heard in the Supreme Court of New South Wales.

The legal issues before the court were whether there was a breach of the duty of full disclosure in the ex parte application for the Anton Pillar order and whether the court should exercise its discretion to set aside the order due to the alleged breach. The court examined whether the applicant had failed to notify the respondent of the links to an independent computer expert who would examine the seized computer. The court also had to consider whether this failure warranted setting aside the order.

The court found that there was indeed a breach of the duty of full disclosure, as the applicant had not informed the respondent of the independent computer expert. However, the court exercised its discretion not to set aside the order. The court reasoned that the breach was not material to the decision to grant the order and that setting aside the order would cause significant prejudice to the applicant, potentially allowing the destruction or alteration of critical evidence. The court also noted that the respondent had not demonstrated any prejudice from the alleged breach.

No further orders were made by the court in relation to the Anton Pillar order. The case proceeded to trial on the substantive issues of breach of contract and fiduciary duty.

Orders