JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : TOLEFE -v- CSG LTD [No 2] [2012] WASC 310 CORAM : EM HEENAN J HEARD : 24 JULY 2012 DELIVERED : 24 JULY 2012 PUBLISHED : 30 AUGUST 2012 FILE NO/S : CIV 3374 of 2011 BETWEEN : GREGORY UCHE TOLEFE First Applicant
SWOTSMART PTY LTD
Second Applicant
AND
CSG LTD
First Respondent
CSG EDUCATION PTY LTD
Second Respondent
ACN 126 840 542 PTY LTD
Third Respondent
CSG SERVICES PTY LTD
Fourth Respondent
DELEXIAN PTY LTD
Fifth Respondent
CSG SOLUTIONS PTY LTD
Sixth Respondent
(Page 2)Catchwords:
Order for inspection of documents - Form of the proposed orders - Costs
Legislation:
Nil
Result:
Orders for inspection of documents
Category: C
Representation:
Counsel:
First Applicant : Mr P C van Hattem SC
Second Applicant : Mr P C van Hattem SC
First Respondent : Mr R J Price
Second Respondent : Mr R J Price
Third Respondent : Mr R J Price
Fourth Respondent : Mr R J Price
Fifth Respondent : Mr R J Price
Sixth Respondent : Mr R J Price
Solicitors:
First Applicant : MDS Legal
Second Applicant : MDS Legal
First Respondent : DLA Piper Australia
Second Respondent : DLA Piper Australia
Third Respondent : DLA Piper Australia
Fourth Respondent : DLA Piper Australia
Fifth Respondent : DLA Piper Australia
Sixth Respondent : DLA Piper Australia
(Page 3)Case(s) referred to in judgment(s):Nil
(Page 4)
1 EM HEENAN J: Having delivered my reasons for decision on this application, I have heard submissions as to the form of orders which should be made in order to give effect to the decision made. I have had the assistance of a minute of proposed orders by the applicants, and a minute of proposed orders by the respondents. There are some differences between them. Having heard submissions about the form which the orders should take, I think I can now deal with the principal areas of controversy.
2 Once I have done so, it should be possible for the parties to bring in a further minute with appropriate amendments to either or both of the minutes which should be capable of being approved and so form the final order of the court. I will choose as the model of the order the one submitted by the respondents, only because that contains more detail, and highlights the issues of controversy which have arisen between the parties.
3 The first issue for resolution is whether access to documents in the form of provision for inspection should be made completely by a particular date, or whether or not it should be a two-stage or multi-stage process in which the so-called secondary documents can be made available at an earlier stage, and the primary documents at a later stage. Such an approach would require some definition to be given to the scope of the terms 'primary documents' and 'secondary documents'. An indication of the distinction between the two is apparent from the respondents' minute, and I will not elaborate upon it.
4 The advantage of the two-stage process would be that it would allow access to the secondary documents sooner than access to the primary documents, and thus allow the applicants an earlier opportunity to obtain at least part of the information which they are seeking. However, one disadvantage is that it would require at least duplication of the efforts of inspection and the engagement of consultants, and hence additional expense. The applicants are disinclined to engage in a two-stage process for that reason and, accordingly, with a view to minimising expense and duplication of effort, I consider that the approach should be for there to be one single process for inspection by a certain date. I will therefore direct that the order reflect one process of discovery by a specified date.
5 That brings me to the date by which disclosure should be made. The applicants by their minute seek disclosure within 14 days. The respondents contemplate disclosure of the secondary documents by 31 October 2012, and the primary documents by 28 September 2012. I have been informed without objection that there has been a change in the
(Page 5) control of one or more of the respondents and the sale of the business of another which, combined with the end of year reporting following 30 June 2012, has made this a particularly busy period, and has resulted in a reduction in the number of experienced accounting staff available to perform that task. As a consequence I consider that completion of the inspection arrangement should be made on or before 28 September 2012, as sought by the respondents. That will fix the time for giving access, and it will also result in obviating the need for par 2 in the respondents' minutes, and also obviate the need to distinguish between bank statements and correspondence as falling within the categories of primary or secondary documents, as contemplated by the respondents in pars (1)(c), (d) and (g) of their minute.
6 One further area of controversy is the formulation of par 1(b) of the proposed minute, requiring disclosure of documents relating to any sale, assignment or transfer of the business carried on by the third respondent during or before November 2008, the CingleVue Business, or any part of the CingleVue Business after October 2008. That is the form of the relief sought by the applicants in the originating motion. It was the form of the relief sought in the course of submissions, and it was the form of relief which I contemplated in the written reasons for decision which have just been delivered. 7 The respondents now seek to place a limit on this relating to any sale, assignment or transfer of the business after October 2008 until 30 June 2011, the reason being that since this matter was heard, there has been a sale or transfer of shares in some of the respondents and the business to a major third party. The respondents submit that changing the formulation of par 1(b) is necessary to avoid disclosure of documents relating to that sale, which was not in the contemplation of any of the parties at the time the matter was heard.
8 It seems that this is a matter upon which much may depend upon the nature and sensitivity of the particular documents. As I have not heard full argument upon this, and the applicants have not been in a position to put any evidence or submissions in relation to this, I consider that the order as proposed by the respondents should be made; that is, to 30 June 2011. However, the question of whether or not there should be disclosure, and if so to what extent, of documents relating to the sale of the business or any of its parts after 30 June 2011, should be the subject of liberty to apply for further orders, in which case if application is made, there may be further evidence and submissions.
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9 So although the order will be made in relation to documents not later than 30 June 2011, there will be liberty given to apply for disclosure of documents after that date relating to the more recent sale. That will facilitate an opportunity for the merits of that matter to be properly considered.
10 As for cl 2 and the phrase 'if necessary' in par (2)(b), it is no longer a matter in issue, because there will be no need for par 2. As to the timing for inspection and perusal of documents after disclosure set out in par 4, I consider that the original proposal for three months by the applicants is reasonable, rather than the one month contended for by the respondents, and there will be a three-month period. Similarly in relation to par 3, I consider that a three-month period will be reasonable rather than the one month contended for by the respondents.
11 In relation to par 7 and the proposal for costs, the so-called compliance costs, which are the subject of par (7)(a), I consider that par (7)(a)(i) should allow for a period of six months from the commencement of proceedings, rather than three, and that the liberty to apply at any time, as proposed by the respondents, should be granted. As to par (7)(b), which would call for the payment of the compliance costs by the applicants, if no proceedings were commenced within the six-month period, I consider that the order should stand, but it should, instead of providing for costs on an indemnity basis, include a provision to the effect that the respondents have liberty to apply for indemnity costs at the completion of the process. In any event, the reference to costs is to be taken to be a reference to costs to be taxed if not agreed.
12 As to par 8 for the so-called application costs, I consider that these should be reserved until the process of inspection and associated matters has been completed, with liberty to any party to bring on the application for costs on seven days' notice to the other. If counsel can agree upon a minute which incorporates those changes of principle, I will approve the order and it can issue. The minute as proposed by the respondents, with the necessary amendments to delete the reference to order 2, can stand. The first line of par 7 was not controversial, and can stand.