Re Clarinda Pty Ltd (in liq) - [2023] VSC 109

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2022 00710

IN THE MATTER OF CLARINDA PTY LTD (IN LIQUIDATION) (ACN 166 128 892)

DAVID COYNE IN HIS CAPACITY AS THE LIQUIDATOR OF CLARINDA PTY LTD (ACN 166 128 892)	First Plaintiff
CLARINDA PTY LTD (IN LIQUIDATION) (ACN 166 128 892)	Second Plaintiff
v
GRANT HARTLEY FOWLER	First Defendant
BETTINA EVERT	Second Defendant

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 March 2023
DATE OF JUDGMENT:	9 March 2023
CASE MAY BE CITED AS:	Re Clarinda Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2023] VSC 109

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PRACTICE AND PROCEDURE — Application pursuant to s 27(3)(b) of the Civil Procedure Act 2010 (Vic) and inherent jurisdiction — Release of obligation imposed in respect of documents and information used in a previous proceeding to allow use in the current proceeding — Requirement for special circumstances — Harman undertaking — Implied undertaking not to use documents or information for a purpose other than the legal proceeding — Documents and information required to have been produced under compulsion — Only the court can release a party from the implied undertaking — Application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mark McKillop	Mills Oakley
For the Defendants	Christie Jones	Madgwicks

HIS HONOUR:

Introduction

By summons filed on 24 February 2023, the plaintiffs seek an order pursuant to s 27(3)(b) of the Civil Procedure Act 2010 (Vic) (CPAct) and the inherent jurisdiction of the court that they and the defendants be released from:

(a) their respective obligations under s 27(1) of the CP Act not to use the documents and information referred to in Schedule A to these reasons (Schedule A), being documents that were filed or produced in proceeding S ECI 2019 04519 (Previous Proceeding), for a purpose other than in connection with the Previous Proceeding; and

(b) their respective implied undertakings not to disclose or use the documents and information in Schedule A for a purpose other than in connection with the Previous Proceeding.

The implied undertaking referred to in paragraph 1(b) is commonly referred to as the ‘Harman undertaking’, which is how it is referred to in the balance of these reasons.[1]
[1]Being a reference to the case of Harman v Secretary of State for Home Departments [1983] 1 AC 280. See also Hearne v Street (2008) 235 CLR 125, [96] (Hayne, Heydon and Crennan JJ).

The purpose for which it is said that the plaintiffs and defendants wish to use the documents and information is to assist the parties with the conduct of this proceeding, which is said to involve ‘the same or substantially the same issue in dispute’ regarding the solvency of the second plaintiff (Company).

The Previous Proceeding was commenced by the same plaintiffs against the Commissioner of Taxation and involved allegations against the Commissioner that various transactions constituted unfair preferences, insolvent transactions and/or voidable transactions…

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: [2023] VSC 109
Decision Date: 9 March 2023

CaseChat Overview and Summary

The case involved an application by the liquidators of Clarinda Pty Ltd to the Supreme Court of Victoria, seeking permission to use certain documents and information that had been produced under compulsion in a previous proceeding. The liquidators argued that these documents were essential for their case in the current proceeding, but were currently bound by an implied undertaking not to use them for any purpose other than the legal proceeding in which they were originally produced. The application was made pursuant to section 27(3)(b) of the Civil Procedure Act 2010 (Vic) and the court's inherent jurisdiction.

The central legal issue before the court was whether the liquidators could be released from the implied undertaking not to use the documents and information for any purpose other than the legal proceeding in which they were originally produced. The court needed to consider whether special circumstances existed that warranted the release of this obligation and whether an appropriate Harman undertaking could be given to ensure that the documents and information would not be used for any other purpose.

The court held that the implied undertaking not to use documents and information produced under compulsion could only be released by the court itself. It found that special circumstances did exist in this case, as the documents and information were essential to the liquidators' case and the failure to use them would result in substantial injustice. The court also considered that an appropriate Harman undertaking could be given to protect the interests of the party that had originally produced the documents and information. Accordingly, the court granted the application, releasing the liquidators from the implied undertaking and permitting them to use the documents and information in the current proceeding.

The final orders of the court included the release of the liquidators from the implied undertaking not to use the documents and information for any purpose other than the legal proceeding in which they were originally produced, subject to the provision of a Harman undertaking. The court also ordered that the liquidators provide a copy of the undertaking to the party that had originally produced the documents and information and any other party affected by the order. The liquidators were further required to take all reasonable steps to ensure that the documents and information were not used for any purpose other than the current proceeding.

Orders