Reeve v Aqualast Pty Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA

Reeve v Aqualast Pty Ltd (No 2) [2012] FCA 791

Citation: Reeve v Aqualast Pty Ltd (No 2) [2012] FCA 791
Parties: LLOYD REEVE v AQUALAST PTY LTD (ACN 137 316 888), ULTRALAST MANUFACTURING PTY LTD (ACN 139 587 242), ULTRALAST INTERNATIONAL PTY LTD (ACN 137 334 706), ULTRALAST HOLDINGS PTY LTD (ACN 146 101 386), GREENGUARD PTY LTD (ACN 147 950 098), ALPHALAST PTY LTD (ACN 140 791 644), ALPHALAST GLOBAL PTY LTD (ACN 152 564 200), ECO GLOBALGEN PTY LTD (152 594 628), MAHER (AKA MARK) JOSEPH, AKA JOSEPH MAHER and STEVEN NIKOLOVSKI
File number: NSD 98 of 2012
Judge: YATES J
Date of judgment: 31 July 2012
Legislation: Federal Court Act 1976 (Cth) s 43
Federal Court Rules 2011 (Cth) r 7.29
Cases cited: Reeve v Aqualast Pty Ltd [2012] FCA 679
Date of hearing: Determined on the papers
Date of last submissions: 27 July 2012
Place: Sydney
Division: GENERAL DIVISION
Category: No catchwords
Number of paragraphs: 16
Counsel for the Prospective Applicant: Mr J O’Sullivan
Solicitor for the Prospective Applicant: O'Neill Partners Commercial Lawyers
Solicitor for the First, Second, Third, Fifth and Ninth Prospective Respondents: Aldgate Lawyers
Solicitor for the Fourth, Sixth, Seventh, Eighth and Tenth Prospective Respondents: Lawcorp Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 98 of 2012
BETWEEN:

LLOYD REEVE
Prospective Applicant
AND:

AQUALAST PTY LTD (ACN 137 316 888)
First Prospective Respondent

ULTRALAST MANUFACTURING PTY LTD
(ACN 139 587 242)
Second Prospective Respondent

ULTRALAST INTERNATIONAL PTY LTD
(ACN 137 334 706)
Third Prospective Respondent

ULTRALAST HOLDINGS PTY LTD (ACN 146 101 386)
Fourth Prospective Respondent

GREENGUARD PTY LTD (ACN 147 950 098)
Fifth Prospective Respondent

ALPHALAST PTY LTD (ACN 140 791 644)
Sixth Prospective Respondent

ALPHALAST GLOBAL PTY LTD (ACN 152 564 200)
Seventh Prospective Respondent

ECO GLOBALGEN PTY LTD (ACN 152 594 628)
Eighth Prospective Respondent

MAHER (AKA MARK) JOSEPH, AKA JOSEPH MAHER
Ninth Prospective Respondent

STEVEN NIKOLOVSKI
Tenth Prospective Respondent

JUDGE:

YATES J

DATE OF ORDER:

31 JULY 2012

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Subject to order 2, the prospective applicant pay the prospective respondents’ costs of the application for preliminary discovery as well as their costs of giving discovery and producing the discovered documents for inspection.

2.The fourth, sixth, seventh, eighth and tenth prospective respondents pay the prospective applicant’s costs of and incidental to making arrangements for his foreshadowed cross-examination that was to be conducted by video conference.  

Note:    Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 98 of 2012
BETWEEN:

LLOYD REEVE
Prospective Applicant
AND:

AQUALAST PTY LTD (ACN 137 316 888)
First Prospective Respondent

ULTRALAST MANUFACTURING PTY LTD
(ACN 139 587 242)
Second Prospective Respondent

ULTRALAST INTERNATIONAL PTY LTD
(ACN 137 334 706)
Third Prospective Respondent

ULTRALAST HOLDINGS PTY LTD (ACN 146 101 386)
Fourth Prospective Respondent

GREENGUARD PTY LTD (ACN…

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Details
Case
[2012] FCA 791
Decision Date

CaseChat Overview and Summary

In the case of Reeve v Aqualast Pty Ltd (No 2), the primary legal issue was the scope and admissibility of preliminary discovery orders in relation to a wide range of documents, as well as the allocation of costs between the parties. Reeve sought an order for preliminary discovery over a broad spectrum of documents, which was contested by the prospective respondents. The court had to determine whether the application for preliminary discovery was justified and, if so, the extent to which the applicant should bear the costs associated with the process.

The court assessed the merits of Reeve's application for preliminary discovery, concluding that while the applicant had achieved some success, the overall scope of the sought discovery was excessive. The court found that the major issue during the hearing was the alleged misuse of confidential information. It was determined that Reeve's application for preliminary discovery was largely unsuccessful, leading to the conclusion that he should bear the costs of the application, as well as the costs of giving discovery and producing the documents for inspection. However, the court ruled that these costs should not be awarded on an indemnity basis, as there was insufficient justification for such an award. An exception was made for the costs related to the unnecessary arrangements for a video conference cross-examination, which the respondents were ordered to pay.

The court further addressed other orders sought by the prospective respondents, including an application for security for costs. The final orders mandated that Reeve, subject to an exception, bear the costs of the application and the discovery process, while the respondents were to cover the costs associated with the video conference cross-examination arrangements. This decision underscores the importance of proportionality in discovery applications and the discretion of the court in allocating costs.

Orders

Orders of the court

1. Subject to order 2, the prospective applicant pay the prospective respondents’ costs of the application for preliminary discovery as well as their costs of giving discovery and producing the discovered documents for inspection.

2. The fourth, sixth, seventh, eighth and tenth prospective respondents pay the prospective applicant’s costs of and incidental to making arrangements for his foreshadowed cross-examination that was to be conducted by video conference.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

I should add that all prospective respondents made a submission that I should not make any order reserving the question of their costs to any proceeding that Mr Reeve might choose to issue, consequent upon discovery being given. I note, however, that Mr Reeve has made no submission to that effect. Rather, his contention is that an order should be made now that the prospective respondents pay his costs. Consideration The order for costs is in the discretion of the Court: see s 43(2) of the Federal Court of Australia Act 1976. Although Mr Reeve has been successful in obtaining an order for preliminary discovery in his favour, the measure of his success has been very limited indeed. I do not accept his submission that, had there been an agreement to produce the limited categories in respect of which preliminary discovery has been ordered, it is likely that his application would have been unnecessary. Mr Reeve sought preliminary discovery over a very wide range of documents. At the hearing he pressed for discovery in respect of all those categories. For the reasons I have given, his application for preliminary discovery in respect of all categories could not succeed. In this connection I also accept the submission of the Nikolovski prospective respondents that the major issue on the hearing of the application was the alleged misuse of confidential information. In my view, in the present case, the appropriate order for costs is one that reflects what was really the substantial lack of success of the application, overall. For this reason, I am persuaded to the view that, subject to one matter, Mr Reeve should pay the prospective respondents’ costs of the application as well as their costs of giving discovery and producing the discovered documents for inspection. I am not persuaded, however, that those costs should be awarded on an indemnity basis. No proper foundation has been laid for costs to be so awarded. The one matter for which an exception should be made is the costs incurred by Mr Reeve of and incidental to making arrangements for his foreshadowed cross-examination to be conducted by video conference. It has not been made clear to me why any such cross‑examination was likely to be necessary. In any event, the Nikolovski prospective respondents changed their requirement in that regard just prior to the commencement of the hearing. This meant that those arrangements were rendered completely unnecessary. I note, in this connection, that the requirement for Mr Reeve to be present for cross-examination was made almost three weeks before the hearing of the application. There was ample time before commencement of the hearing for that requirement to be reviewed. Against the possibility that costs have been incurred and wasted in that regard, the Nikolovski prospective respondents should bear them. Other orders sought As I have indicated above, other orders are sought by the prospective respondents. I have already dealt with their application for security for costs.