Richards v Patras Pty Ltd

[2009] FCA 380

FEDERAL COURT OF AUSTRALIA

Richards v Patras Pty Ltd [2009] FCA 380

MAX RAYMOND RICHARDS v PATRAS PTY LTD & ORS

NSD 1603 of 2008

EMMETT J

13 MARCH 2009

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1603 of 2008

BETWEEN: MAX RAYMOND RICHARDS
Plaintiff

AND:

PATRAS PTY LTD
First Defendant

RICHARDS MILLING CO PTY LTD
Second Defendant

RICHARDS GRAZING CO PTY LTD
Third Defendant

CYRILL RICHARDS
Fourth Defendant

WARREN HARVEY
Fifth Defendant

JUDGE:	EMMETT J
DATE OF ORDER:	13 MARCH 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Leave be granted to file the Notice of Motion initialled by Emmett J and dated with today’s date.

2.Leave be granted to file a copy of the Affidavit of Stephen Woodward in Court.

3.The proceeding be listed for directions on 24 April 2009.

THE COURT DIRECTS THAT:

4.The parties to approach the Registry for the purposes of fixing a date for a pre-mediation conference.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1603 of 2008

BETWEEN:

MAX RAYMOND RICHARDS

Plaintiff

AND:

PATRAS PTY LTD

First Defendant

RICHARDS MILLING CO PTY LTD

Second Defendant

RICHARDS GRAZING CO PTY LTD

Third Defendant

CYRILL RICHARDS

Fourth Defendant

WARREN HARVEY
Fifth Defendant

JUDGE:

EMMETT J

DATE:

13 MARCH 2009

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1. This application is slightly curious.  The plaintiff, Mr Max Richards, the fourth defendant, Mr Cyril Richards, and the fifth defendant, Mr Warren Harvey, the executor of the estate of another Richards brother, are shareholders in the first defendant, Patras Pty Limited (Patras).  The second and third defendants are subsidiaries of Patras.  Max Richards commenced this proceeding for the winding up of Patras.  When the matter first came before me, the defendants indicated that they would consent to a winding up order being made in respect of Patras.  The curious aspect is that the plaintiff declined to press on with the winding up application but rather sought further information concerning the affairs of Patras. 

2. Some information has been given and I have been informed from the bar table, by senior counsel for Max Richards, that there may be fiscal consequences that would be regarded as adverse for the shareholders of Patras if that company were now wound up.  The application before me today is by Max Richards for the Court to direct that the parties undertake mediation pursuant to Order 72 of the Federal Court Rules.  That application is opposed by the defendants on the basis that the parties have adopted positions that are immutable and that mediation would achieve nothing. 

3. I would normally be very reluctant to compel mediation where one party steadfastly opposes such an order.  However, it seems to me that this matter is an exception.  The real disputants are the shareholders of Patras.  While I have no material before me as to the nature of the adverse fiscal consequences that might result from a winding up, the fact that senior counsel has indicated that there is an issue is something to which the Court can have regard in the exercise of the discretion under Order 72.  Certainly, it may be that a failed mediation will involve the parties in costs that might otherwise not have been incurred.  On the other hand, if a mediation is able to bring the parties together, it would save very significant costs involved in the conduct of a fully fledged suit for winding up or for other alternative relief on the basis of oppression of Max Richards, as a shareholder of Patras.  Senior counsel for Max Richards has indicated that, having regard to the consequences of winding up, it would be oppressive for the other shareholders to insist upon winding up as the only means of bringing to an end the relationship that exists between and among the shareholders. 

4. In all of the circumstances, I am persuaded that it is appropriate to accede to the application by Max Richards that the matter be referred to mediation by a registrar of the Court.  The Court’s registrars are well qualified in mediation and have achieved considerable success in many diverse areas, so far as the resolution of proceedings are concerned.  The fact that one party says that it is not prepared to accept a proposal of the other is not of itself an indication that there is no possible common ground.  If it be the fact that Max Richards has obtained advice that indicates adverse fiscal consequences for the other shareholders, it may well be appropriate that that advice be communicated in a forum such as a mediation with an independent facilitator, such as one of the Court registrars. 

5. I therefore propose to direct the parties to approach a registrar of the Court with a view to fixing an appointment for a pre-mediation conference.  I will stand the matter over for further directions on a date after the parties have an opportunity to make such an approach and pursue any mediation.

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:   21 April 2009

Counsel for the Plaintiff:	F Kunc SC
Counsel for the Defendants:	D Macfarlane

Date of Hearing:	13 March 2009
Date of Judgment:	13 March 2009