Stratpharma Pty Ltd v Hbba Pty Ltd
[2021] VCC 543
•7 May 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-20-02012
| STRATPHARMA PTY LTD (ACN 628 913 495) | First Plaintiff |
| STRATPHARMA AG (ARBN 614 085 924) | Second Plaintiff |
| v | |
| HBBA PTY LTD (ACN 603 072 108) | First Defendant |
| PANALPINA WORLD TRANSPORT PTY LTD (ACN 000 525 995) | Second Defendant |
---
JUDICIAL OFFICER: | Judicial Registrar Muller | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF RULING: | 7 May 2021 | |
CASE MAY BE CITED AS: | Stratpharma Pty Ltd & Anor v HBBA Pty Ltd & Anor | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 543 | |
RULING
---
Subject:Discovery pursuant to r 29.08 of the County Court Civil Procedure Rules 2018 (Vic)
Catchwords: r 29.08 discovery; redacted documents
Legislation Cited: County Court Civil Procedure Rules 2018 (Vic); Corporations Act 2001 (Cth)
Cases Cited:Sunland Waterfront (BVI) Ltd v Prudential Investments Pty Ltd (No 4) [2010] FCA 863; Fig Tree Developments Ltd v Australian Property Custodian Holdings Ltd [2008] FCA 1041; Octagon Inc v Hewitt (No 2) [2011] VSC 373; Atlas Copco Australia Pty Ltd v Oxair Gases Pty Ltd [2013] WASCA 43.
---
JUDICIAL REGISTRAR MULLER:
- On 22 January 2021, I made orders (my previous order) that pursuant to r 29.11 of the County Court Civil Procedure Rules 2018 (Vic) (Rules) the first defendant make discovery of the following documents or categories of documents (Specified Documents):
- the policy or policies of insurance, certificates of currency, and documents evidencing payment for the insurance cover provided by “Honan Insurance Group” taken out by the first defendant in relation to the stock sold by the first plaintiff during the term of the SPL Distribution Agreement (as defined in paragraph 24(a) of the statement of claim);
- the first defendant’s balance sheet for the financial years ended 30 June 2019 and 30 June 2020 (Relevant Period);
- stock ledgers maintained during the Relevant Period relating to the plaintiffs’ stock;
- the final judgment or order (and reasons if any) from Fair Work Commission proceeding U2018/13068; and
- documents relied on or recording the calculation of the redundancy payment referrable to Fair Work Commission proceeding U2018/13068.
- I also ordered that if any of the Specified Documents are no longer in its possession, the first defendant is to file and serve an affidavit in accordance with r 29.08 of the Rules.
Various other events occurred in the weeks following that resulted in orders being made on 10 February 2021 to vacate the trial fixed for 24 February 2021 and refixing it for hearing on 17 May 2021. At that time, an order was made that the parties make any supplementary discovery by 19 March 2021 at 4.00pm. That order did not replace my previous order.
The plaintiffs have now, by way of a request for interlocutory determination (Request), sought the following further orders (Proposed Orders) against the first defendant:
1.Pursuant to Rule 29.11 of the County Court Civil Procedure Rules 2018 (Vic) (Rules), the First Defendant make discovery of its balance sheets maintained in accordance with section 286 of the Corporations Act 2001 (Cth) for the financial years ended 30 June 2019 and 30 June 2020 (Statutory Balance Sheets), in accordance with paragraph 1(b) of the orders of Muller JR made 22 January 2021.
2.The First Defendant produce unredacted copies of the balance sheets described in items 12 and 13 of its supplementary affidavit of documents served on 1 February 2021.
3.If the First Defendant contends that the Statutory Balance Sheets or Unredacted Balance Sheets (Specified Documents) are no longer in its possession, the First Defendant is to file and serve an affidavit containing particulars of:
a.when the Defendant parted with each of the Specified Documents; and
b.its belief as to what happened to each of the Specified Documents.
The first defendant opposes the making of these orders and has filed and served an affidavit of Mark Harrick dated 26 March 2021 (Harrick Affidavit). The Harrick Affidavit is in truth a mixture of evidence, assertion, admission and submission and I read each paragraph accordingly.
At the time of the Request there was no affidavit of documents filed (or otherwise provided to the Court) from the first defendant after the making of my previous orders until 22 March 2021 when an affidavit of documents affirmed by William Denton, a director of the first defendant was filed in response to a request from my chambers to so do (Denton Affidavit). However, the orders sought by the plaintiffs suggest that a supplementary affidavit of documents was served on them on 1 February 2021. I have not seen that document.
The Denton Affidavit set out documents in categories aligned with the categories in my previous order.
Paragraph 1 of the Proposed Orders
Category 1B of the Denton Affidavit makes discovery of HBBA Pty Ltd’s Balance Sheet as of June 2019 (document 12) and as of June 2020 (document 13) and has produced for inspection redacted copies of each. I infer from the face of these documents that they were generated by the first defendant and are not part of externally audited reports. However, it is not clear how it could be said that they are not documents prepared in accordance with s 286 of the Corporations Act 2001 (Cth) as asserted by the plaintiffs in the Request. In fact, beyond that assertion, the plaintiffs do not make submissions developing that point or adduce evidence that the documents do not meet the requirements of s 286 of the Act.
Ordinarily, that would be the end of the issue. However, paragraph 16 of the Harrick Affidavit states that the first defendant has not provided copies of the statutory accounts as they are not relevant to the issues set out in the pleadings. Harrick does not depose that the statutory accounts do not contain balance sheets, but rather asserts that the balance sheets that have been provided satisfy the plaintiffs’ query.
10.That is not what I ordered the first defendant do. The first defendant is to discover the balance sheets for the Relevant Period. It is not for the first defendant to pick and choose which documents within that category it discovers. If there are documents, whether described as statutory accounts or otherwise, which fall within the category ordered they are to be discovered.
11.Accordingly, the first defendant is to make file and serve a further affidavit of documents discovering its balance sheets for the Relevant Period, including balance sheets that may form part of its statutory accounts.
Paragraph 2 of the Proposed Orders
12.Make discovery means, in this Court to prepare an affidavit of documents in Form 29B (r 29.04 of the Rules). The first defendant has done this by an earlier affidavit of documents and the Denton Affidavit.
13.Inspection is a process that occurs after the making of discovery and is governed by r 29.09 of the Rules although the standard orders made in this Division provide for discovery including full inspection by a nominated date. This is done as an efficiency to truncate the procedure otherwise provided for in the Rules.
14.However, a party producing a document for inspection is entitled to claim an entitlement to redact any part of a document discovered that does not relate to any question in the proceeding. The claim may be made in the affidavit of documents which is what the first defendant has done here, supported by the Harrick Affidavit.
15.The relevant starting point is that what must be discovered and produced (save for the question of privilege) is the whole of the document if any part of it is discoverable, so as to guard against the loss of comprehensibility arising from too assiduous masking out or redaction.[1]
[1] Sunland Waterfront (BVI) Ltd v Prudential Investments Pty Ltd (No 4) [2010] FCA 863; Fig Tree Developments Ltd v Australian Property Custodian Holdings Ltd [2008] FCA 1041.
16.The fact that parts of a document are irrelevant does not ordinarily prejudice the discovering party in ways regarded as unjust.[2]
[2] Octagon Inc v Hewitt (No 2) [2011] VSC 373 [53] per Dixon J.
17.Where there is a dispute as to the right of a party to seal up or mask part of a discovered document, it is for the court to determine, on the material before it, whether that party had a right to do so.[3]
[3] Atlas Copco Australia Pty Ltd v Oxair Gases Pty Ltd [2013] WASCA 43
18.I have before me two versions of redacted balance sheets. The versions provided to me by the plaintiffs redact all the numbers in the balance sheets for two years save for Total Assets as at 30 June 2019 stated to be $9,945,408.15. The versions exhibited to the Harrick Affidavit redact all of the figures save for Inventory @ PA Stratpharma and Total Inventory @ PA both stated as $9,336,122.53. Without other numbers being unredacted, it is impossible for the plaintiffs to test the veracity of that number, let alone the integrity of the balance sheets overall or obtain a comparison of consistency between the 2019 and 2020 balance sheets.
19.The Harrick Affidavit does not submit that the first defendant will suffer any injustice if unredacted copies of the balance sheets are produced. Rather Harrick asserts that, on instructions, there was no stock held in the balance sheet for 30 June 2020 and the other figures in the balance sheet are irrelevant.
20.Therefore, because the starting point is that the whole of the document must be produced for inspection, the redactions as proposed make it impossible for the plaintiffs to test the veracity of the numbers that were provided unredacted, and because the first defendant has not asserted any prejudice that would make inspection of the unredacted documents unjust, I will order that the first defendant produce for inspection by the plaintiffs unredacted copies of the discovered documents. In case there is any doubt about it, that extends to any further balance sheets discovered by the first defendant.
Paragraph 3 of the Proposed Orders
- My previous order provided that if any of the Specified Documents are no longer in the first defendant’s possession, the first defendant is to file and serve an affidavit in accordance with r 29.08 of the Rules. It’s obligation to do so remains and it is not necessary to make a further order to give effect to that.
Costs
22.As the plaintiffs have been successful in obtaining the substantive orders sought, I see no reason not exercise my discretion to order that the first defendant pay the plaintiffs’ costs of and incidental to the Request on a standard basis, to be taxed in default of agreement. However, if either party wishes to submit that a different order should be made then they are to file written submissions of no more than one A4 page by Tuesday, 11 May 2021 at 4.00pm and I will determine the issue on the papers.
Orders
23.I will make orders in the form of paragraphs 1 and 2 of the Request with the modification that compliance with those orders is to be by Tuesday, 11 May 2021 at 4.00pm. An order pursuant to paragraph 3 is not necessary. I will make an order on costs after Tuesday, 11 May 2021 and authenticated orders will then be provided to the parties.
---
Certificate
I certify that these five pages are a true copy of the reasons for ruling of Judicial Registrar Muller, delivered on 7 May 2021.
Dated: 7 May 2021
Julia Despard
Associate to Judicial Registrar Muller
0
0
0