S.P.I. Spirits (Cyprus) Ltd v Diageo Australia Ltd (No. 3)

[2006] FCA 938

FEDERAL COURT OF AUSTRALIA

S.P.I. Spirits (Cyprus) Ltd v Diageo Australia Ltd (No. 3) [2006] FCA 938

S.P.I. SPIRITS (CYPRUS) LIMITED AND SPIRITS INTERNATIONAL N.V. v DIAGEO AUSTRALIA LIMITED AND FEDERAL TREASURY ENTERPRISE (FKP) SOJUZPLODOIMPORT;  FEDERAL TREASURY ENTERPRISE (FKP) SOJUZPLODOIMPORT AND STATE FEDERAL UNITARY ENTERPRISE EXTERNAL ECONOMIC UNION SOJUZPLODOIMPORT (FGUP) (VO) v SPIRITS INTERNATIONAL N.V. AND DIAGEO AUSTRALIA LIMITED

NSD 1816 OF 2004

EDMONDS J
25 JULY 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1816 OF 2004

BETWEEN:

S.P.I. SPIRITS (CYPRUS) LIMITED
First Applicant

SPIRITS INTERNATIONAL N.V.
Second Applicant

AND:

AND BETWEEN:

AND

DIAGEO AUSTRALIA LIMITED
First Respondent

FEDERAL TREASURY ENTERPRISE (FKP) SOJUZPLODOIMPORT
Second Respondent

FEDERAL TREASURY ENTERPRISE (FKP)
SOJUZPLODOIMPORT
First Cross-Claimant

STATE FEDERAL UNITARY ENTERPRISE EXTERNAL
ECONOMIC UNION SOJUZPLODOIMPORT (FGUP) (VO)
Second Cross-Claimant

SPIRITS INTERNATIONAL N.V.
First Cross-Respondent

DIAGEO AUSTRALIA LIMITED
Second Cross-Respondent

JUDGE:	EDMONDS J
DATE OF ORDER:	25 JULY 2006
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicant’s motion, notice of which was filed on 19 April 2006, be dismissed with costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1816 OF 2004

BETWEEN:

S.P.I. SPIRITS (CYPRUS) LIMITED
First Applicant

SPIRITS INTERNATIONAL N.V.
Second Applicant

AND:

AND BETWEEN:

AND

DIAGEO AUSTRALIA LIMITED
First Respondent

FEDERAL TREASURY ENTERPRISE (FKP) SOJUZPLODOIMPORT
Second Respondent

FEDERAL TREASURY ENTERPRISE (FKP) SOJUZPLODOIMPORT
First Cross-Claimant

STATE FEDERAL UNITARY ENTERPRISE EXTERNAL ECONOMIC UNION SOJUZPLODOIMPORT (FGUP) (VO)
Second Cross-Claimant

SPIRITS INTERNATIONAL N.V.
First Cross-Respondent

DIAGEO AUSTRALIA LIMITED
Second Cross-Respondent

JUDGE:	EDMONDS J
DATE:	25 JULY 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT (No. 3)

EDMONDS J:

1. This is a motion on notice, which I heard on 8 and 9 June 2005, by which the applicants (‘SPI’ and ‘Spirits’, respectively) and Spirits as the first cross-respondent, seek an order that two orders I made on 3 March 2006 be vacated in respect of certain documents.

2. The two orders I made on 3 March, 2006 were:

   ‘1.Until further order, access for [SPI] and [Spirits] to the documents produced by the second cross-respondents to the first cross-claim (‘Diageo’) in response to the notice to produce dated 17 February 2006 be limited to SPI and Spirits’ external legal representatives.

   2.Pursuant to s 50 of the Federal Court of Australia Act, the documents identified as and comprising Exhibit 1 to Spirits’ motion not be published or made available other than to the parties to the proceedings.’

3. The documents in respect of which it is sought to vacate these orders are described in the notice of motion as ‘… the documents produced by [Diageo] in response to [Spirits’] Notice to Produce dated 17 February 2006 which are attached to confidential Exhibit JVS-10 of the affidavit of John Victor Swinson sworn 18 April 2006’.

4. There are four documents and they can be identified in the following terms without erosion of the confidentiality attaching to such documents by force of the orders now sought to be vacated:

   1.Letter dated 23 July 2002 from the second respondent (‘FKP’) to Diageo.

   2.Email dated 27 December 2002 from FKP to Diageo.

   3.Email dated 27 May 2004 from FKP to Diageo.

   4.Letter dated 27 September 2004 from FKP to Diageo.

   (hereinafter together called ‘the documents’).

5. The case for those moving the motion, SPI and Spirits, was essentially put on two bases:

   1.The documents on their face were not confidential and disclosure of them to SPI and Spirits could not cause damage to Diageo or FKP.

   2.Access to the documents beyond the external legal representatives of SPI and Spirits, in particular to a Mr Audrey Skurikhin, General Counsel and Deputy Chairman of the Board, SPI Group SA, was necessary to enable the solicitors acting for SPI and Spirits to obtain proper instructions.

6. The case for those opposing the motion, FKP and Diageo, was essentially also put on two bases:

   1.The documents were produced in response to a notice to produce in relation to a motion for third party discovery and prior to inter partes discovery in the main proceedings.

   2.Wider access should not be granted prior to inter partes [discovery] in the main proceedings consistent with the principle that recourse to a notice to produce was not a substitute for discovery.

7. The parties indicated that they were content for me to make orders on the motion without giving reasons; however, in the event the whole matter goes further, I think I should at least record my reasoning process on the competing views, albeit in short form.

8. There is undoubtedly some force in the contention of SPI and Spirits that, having regard to the age of the documents and their contents, their confidential nature is not free from doubt; that is certainly the case with three of the four documents and arguably the case with the fourth.

9. Nevertheless, I am not convinced as to why it is contended, in the case of any of the documents, that Mr Skurikhin needs access to them, at least at this stage, in order to give SPI and Spirits’ solicitors proper instructions.  It seems to me that the solicitors for SPI and Spirits could obtain those instructions from Mr Skurikhin and others without giving them access to the four documents, at least at this stage.

10. On the other hand, I think the bases upon which FKP and Diageo oppose the motion are substantive and well founded.  I have not been persuaded why SPI and Spirits should get a ‘head start’ in the discovery process and that, in reality, is what I would be doing if I were to accede to the motion.  As an exercise in case management, that would be unfair.

11. For these short reasons, the motion should be dismissed with costs.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

Associate:

Dated:        25 July 2006

Counsel for the Applicants:	Mr P Flynn
Solicitor for the Applicants:	Mallesons Stephen Jaques
Counsel for the fist Respondent:	Mr R Dick
Solicitor for the First Respondent:	Freehills
Counsel for the Cross-Claimants:	Mr D K Catterns QC
Solicitor for the Cross-Claimants:	Allens Arthur Robinson
Date of Hearing:	8 and 9 June 2006
Date of Judgment:	25 July 2006