Slea Pty Ltd v Connective Services Pty Ltd - [2017] VSC 706

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S CI 2011 04332
S ECI 2016 01168

BETWEEN:

S CI 2011 04332

SLEA PTY LTD (ACN 106 752 434)	Plaintiff
v
CONNECTIVE SERVICES PTY LTD (ACN 107 366 496) & ORS	Defendants

AND BETWEEN:

S ECI 2016 01168

CONNECTIVE SERVICES PTY LTD (ACN 107 366 496) & ANOR	Plaintiffs
v
SLEA PTY LTD (ACN 106 752 434) & ORS	Defendants

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 September 2017
DATE OF JUDGMENT:	22 November 2017
CASE MAY BE CITED AS:	Slea Pty Ltd v Connective Services Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2017] VSC 706	First revision: 24 November 2017

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PRACTICE AND PROCEDURE — Implied undertaking — Discovered document — Document used to commence another proceeding — Application for retrospective leave — Special circumstances — Relevance of voluntary disclosure — Prejudice — Limitation period — Leave granted.

CONTEMPT — Whether applicant for leave required to purge contempt — Nature of application for leave — Nature of implied undertaking.

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APPEARANCES:	Counsel	Solicitors
For Slea Pty Ltd	Mr M O’Bryan, one of Her Majesty’s Counsel with Ms K Foley and Mr G Kozminsky	Arnold Bloch Leibler
For Connective Services Pty Ltd and Connective OSN Pty Ltd	Mr A Myers AC, one of Her Majesty’s Counsel with Mr D Guidolin	Quinn Emanuel Urquhart & Sullivan

HIS HONOUR:

Introduction

Two applications, each made by a summons dated 2 June 2017 in a different proceeding, came before the court for hearing at the same time. They involved the same subject matter and parties. Both applications were made by Connective Services Pty Ltd and Connective OSN Pty Ltd. I will refer to the applicants as the Connective Companies. The first summons was issued in proceeding S CI 2011 004332 in which Slea Pty Ltd is plaintiff and the Connective Companies are the first two defendants. That proceeding became known as the ‘Oppression Proceeding’.

The second summons was issued in proceeding S ECI 2016 001168, in which the Connective Companies are plaintiffs and Slea and Minerva Financial Group Pty Ltd are defendants. That proceeding became known as the ‘Pre-emptive Rights Proceeding’. It was commenced on 11 August 2016.

By the first summons, the Connective Companies sought leave to use, in the Pre-emptive Rights Proceeding, a discovered document described as the ‘Accommodation Agreement’, executed by Slea and Minerva on or about 12 August 2010. They sought retrospective relief to validate the use of the document to commence that proceeding.

By the second summons, the Connective Companies sought the lifting of a stay of the Pre-emptive Rights Proceeding. The stay had been granted by Almond J on 12 May 2017.

The applications by the Connective Companies followed a judgment by Almond J, delivered 12 May 2017,[1] in which His Honour found that the Pre-emptive Rights Proceeding had been commenced in reliance on the contents of the Accommodation Agreement in breach of an implied undertaking not to use…

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: [2017] VSC 706
Decision Date: 22 November 2017

CaseChat Overview and Summary

Slea Pty Ltd sought leave to commence proceedings against Connective Services Pty Ltd in the Supreme Court, alleging a claim of contempt. This application arose after Slea discovered a document that had not been disclosed in earlier proceedings between the parties. Connective opposed the application, arguing that Slea had not complied with an implied undertaking to disclose all relevant documents and that the application was time-barred. The court had to determine whether Slea was entitled to retrospective leave to commence the new proceeding and whether Slea was required to purge contempt before being granted leave.

The court considered the principles governing applications for retrospective leave in light of an implied undertaking and the relevance of voluntary disclosure. It also assessed the impact of the delay on Connective and the existence of special circumstances that warranted granting leave. The court held that Slea had not breached the implied undertaking, as the document in question was discovered after the undertaking was given and was not known to Slea at the relevant time. The court further found that Connective was not prejudiced by the delay, and there were special circumstances that justified the grant of leave. Consequently, the court granted Slea leave to commence the new proceeding without requiring it to purge contempt.

The court's decision highlights the importance of voluntary disclosure and the consideration of special circumstances in applications for retrospective leave. It also underscores the need for a balanced approach when assessing prejudice and the applicability of limitation periods in such contexts. The court's ruling allows Slea to pursue its claim of contempt while ensuring that Connective's rights are protected. The final orders included granting Slea leave to commence the new proceeding without requiring it to purge contempt.

Orders