Seeley International Pty Ltd v Cintro Pty Ltd
[2011] FCA 712
•23 June 2011
FEDERAL COURT OF AUSTRALIA
Seeley International Pty Ltd v Cintro Pty Ltd [2011] FCA 712
Citation: Seeley International Pty Ltd v Cintro Pty Ltd [2011] FCA 712 Parties: SEELEY INTERNATIONAL PTY LTD (ACN 054 687 035) v CINTRO PTY LTD (ACN 005 777 748) and NEWTRONICS PTY LTD (ACN 061 493 516) and CIGNA INSURANCE AUSTRALIA LIMITED (ACN 001 642 020)) File number: SAD 21 of 1998 Judge: BESANKO J Date of judgment: 23 June 2011 Date of hearing: 21 June 2011 Place: Adelaide Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 12 Counsel for the Applicant: The Applicant did not appear Counsel for the First Respondent: The First Respondent did not appear Counsel for the Second Respondent/Cross-claimant: Mr M Burnett Solicitor for the Second Respondent/Cross-claimant: Holding Redlich Counsel for the Third Respondent/ Cross‑respondent:
Mr W Ericson Solicitor for the Third Respondent/ Cross‑respondent: Finlaysons
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 21 of 1998
BETWEEN: SEELEY INTERNATIONAL PTY LTD (ACN 054 687 035)
ApplicantAND: CINTRO PTY LTD (ACN 005 777 748)
First RespondentNEWTRONICS PTY LTD (ACN 061 493 516)
Second Respondent/Cross-ClaimantCIGNA INSURANCE AUSTRALIA LIMITED (ACN 001 642 020)
Third Respondent/Cross-Respondent
JUDGE:
BESANKO J
DATE OF ORDER:
23 JUNE 2011
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.That for the purpose identified in paragraph 2 the second respondent Newtronics Pty Ltd (in liquidation) be released from the implied undertaking not to use other than for the purposes of these proceedings:
(a)Documents supplied by the applicant, Seeley International Pty Ltd (whether by way of discovery, documents filed in Court, witness statements, expert reports and working papers);
(b)Documents supplied by the cross-respondent, Cigna Insurance Australia Limited, by way of discovery as set out in JHS 12 to the affidavit of James Henry Stewart sworn on 12 May 2011 or documents filed in Court;
(c)Documents supplied under subpoena by the parties identified in RK 1 to the affidavit of Radhika Kanhai sworn on 17 June 2011.
2.That leave be granted to use the documents referred to in paragraph 1 and in relation to action number 9670 of 2005 in the Supreme Court of Victoria and action number 6807 of 2006 in the Supreme Court of Victoria.
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 Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 21 of 1998
BETWEEN: SEELEY INTERNATIONAL PTY LTD (ACN 054 687 035)
ApplicantAND: CINTRO PTY LTD (ACN 005 777 748)
First RespondentNEWTRONICS PTY LTD (ACN 061 493 516)
Second Respondent/Cross-ClaimantCIGNA INSURANCE AUSTRALIA LIMITED (ACN 001 642 020)
Third Respondent/Cross-Respondent
JUDGE:
BESANKO J
DATE:
23 JUNE 2011
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The second respondent in this proceeding seeks the following orders:
1.That for the purpose identified in paragraph 2 the second respondent Newtronics Pty Ltd (in liquidation) be released from the implied undertaking not to use other than for the purposes of these proceedings:
(a)Documents supplied by the applicant, Seeley International Pty Ltd (whether by way of discovery, documents filed in Court, witness statements, expert reports and working papers);
(b)Documents supplied by the cross-respondent, Cigna Insurance Australia Limited, by way of discovery as set out in JHS 12 to the affidavit of James Henry Stewart sworn on 12 May 2011 or documents filed in Court;
(c)Documents supplied under subpoena by the parties identified in RK 1 to the affidavit of Radhika Kanhai sworn on 17 June 2011.
2.That leave be granted to use the documents referred to in paragraph 1 and in relation to action number 9670 of 2005 in the Supreme Court of Victoria and action number 6807 of 2006 in the Supreme Court of Victoria.
The application was made by notice of motion dated 17 May 2011. It is supported by an affidavit of James Henry Stewart sworn on 12 May 2011. Mr Stewart is a partner of the firm Ferrier Hodgson and a chartered accountant. On 26 February 2002 he was appointed official liquidator of the second respondent by an order of this Court.
The second respondent has issued proceedings in the Supreme Court of Victoria (action number 9670 of 2005) against its former directors as at 1994 and 1995, Messrs Tescher and Gjergja (‘the 2005 Supreme Court action’). The second respondent has also issued proceedings in the Supreme Court of Victoria (action number 6897 of 2006) in relation to the conduct of this proceeding against its then solicitors, Russell Kennedy, and against its then directors, Messrs Gjergja, Kenery and Bruce (‘the 2006 Supreme Court action).
This proceeding was commenced in 1998. Mr Stewart describes the course of the proceeding in his affidavit. The second respondent issued a cross-claim against its insurer, but that cross-claim was settled before trial. The claim between applicant and second respondent proceeded to trial and resulted in a judgment in favour of the applicant on 21 December 2001 in the sum of $13,901,726.02 plus costs which were later taxed at $1,890,162.67. The second respondent’s own legal costs were in the order of $6 million.
Broadly speaking, the 2006 Supreme Court action involves allegations of breaches of duty by the defendants in relation to events which gave rise to the applicant’s claim in this proceeding and the 2006 Supreme Court action involves allegations of breach of duty in connection with the conduct of this proceeding and the failure to reach a commercial settlement with the applicant.
The present application is made because the second respondent wishes to use in the Supreme Court action documents which were obtained:
1.in the course of discovery from the applicant in this proceeding;
2.in the course of discovery from the cross-respondent in this proceeding;
3.from documents produced by third parties in response to subpoenas issued in this proceeding.
Some of the documents in category three were the subject of confidentiality undertakings. In addition to Mr Stewart’s affidavit the second respondent’s application is supported by three affidavits sworn by its solicitor, Ms Radhika Kanhai, two dated 8 June 2011 and one dated 17 June 2011.
The applicant has no objection to the orders sought by the second respondent.
Subject to one qualification the cross-respondent (now Ace Insurance Limited) does not object to the orders sought by the second respondent. The one qualification is that the cross-respondent, in addition to making discovery of documents in this proceeding, produced documents under a subpoena. Confidentiality orders were made in relation to documents produced under the subpoena. Although the second respondent only seeks the orders set out above in relation to the documents discovered by the cross-respondent it is unable to assure the cross-respondent that there is no overlap between the documents which were produced on subpoena and the documents which were discovered. I understand that this difficulty arises because not all of the documents produced under the subpoena were clearly identified. What that means is that some of the discovered documents may also have been produced under subpoena and have been the subject of confidentiality undertakings. Counsel for the cross-respondent appeared and raised this difficulty. He said that the cross-respondent is unable to resolve the matter for itself because of the period of time which has elapsed and the departure of relevant employees. I think the second respondent’s response to this difficulty is correct. The cross-respondent is aware of the documents in respect of which the second respondent seeks the orders and it has had the opportunity to raise any objection. It does not raise any specific objection to the documents in respect of which the second respondent seeks the orders.
With respect to the documents supplied under subpoena the second respondent has contacted or tried to contact the 22 parties concerned. A number have responded that they have no objections. A number are deregistered or do not exist. The important point is that I am satisfied that all who could be notified have been notified and given a reasonable opportunity to object. None of the 22 parties have appeared and objected to the proposed orders.
In terms of the relevant principles it is sufficient for me to refer to Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 225 and Australian Trade Commission v McMahon (1997) 73 FCR 211. In the former case, Wilcox J identified some of the factors which are relevant to the Court’s discretion to allow a party to be released from the implied undertaking (at 221). In the latter case Lehane J said (at 217):
The general principle is, no doubt, that a release of the implied undertaking will be given only if ‘special circumstances’ are established: Crest Homes plc v Marks [1987] AC 829. Where an application for release is decided in contested proceedings, it seems that ‘special circumstances’ will fairly readily be found where it is established that the use of documents discovered in a proceeding is reasonably required for the purpose of doing justice between the parties in other proceedings: see, for example, Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217.
I am satisfied having regard to the facts of this case and the relevant principles that it is appropriate to make the orders sought by the second respondent.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate:
Dated: 23 June 2011
5
0