Verge & Anor v Devere Holdings Pty Ltd & Ors (No. 3)
[2008] FMCA 1220
•29 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| VERGE & ANOR v DEVERE HOLDINGS PTY LTD & ORS (NO 3) | [2008] FMCA 1220 |
| PRACTICE AND PROCEDURE – Discovery – whether appropriate in interests of justice – relevance – of benefit to litigation – litigation relatively complex. |
| PRACTICE AND PROCEDURE – Discovery – whether appropriate in interests of justice – third party discovery. |
| Bankruptcy Act 1996 (Cth), s.120(1) Federal Court Rules (Cth), O.15A r.8 Federal Magistrates Act 1999 (Cth), s.45 Federal Magistrates Court Rules 2001(Cth), rr.1.03, 1.05(1) and (2), 4.05(2)(b) and (3), 14.02 |
| Abrahams v Qantas Airways Limited (2007) 210 FLR 314; [2007] FMCA 639 Rana v University of South Australia (2004) 136 FCR 344; [2004] FCA 559 Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd (No 2) [2008] FMCA 690 |
| Applicants: | EVAN ROBERT VERGE AND GEORGE AUBREY LOPEZ |
| First Respondent: | DEVERE HOLDINGS PTY LTD (ACN 009 220 615) |
| Second Respondent: | PACKHAM PTY LTD (ACN 056 326 884) |
| Third Respondent | CASTLEWORLD PTY LTD (ACN 056 326 884) |
| File Number: | PEG 64 OF 2007 |
| Judgment of: | Lucev FM |
| Hearing date: | 8 August 2008 |
| Date of Last Submission: | 13 August 2008 |
| Delivered at: | Perth |
| Delivered on: | 29 August 2008 |
REPRESENTATION
| Counsel for the Applicants: | Ms P E Cahill |
| Solicitors for the Applicants: | Jackson McDonald |
| Counsel for the First and Second Respondents and for Topfox Corporation Pty Ltd: | Mr C S Williams |
| Solicitors for the First and Second Respondents and for Topfox Corporation Pty Ltd: | Solomon Brothers |
| Counsel for the Third Respondent: | No appearance |
| Solicitors for the Third Respondent: | Hotchkin Hanly |
DECLARATIONS AND ORDERS
The Court declares under s.45 of the Federal Magistrates Act 1999 (Cth) that it is in the interests of the administration of justice that there be an order for discovery and orders that Topfox Corporation Pty Ltd do provide discovery of:
(a)the letter from Solomon Brothers to Beere & Meyer advising of the applicants’ claims;
(b)any other letter, email message or memo passing between Topfox or its solicitors and third parties including PPM relating to the settlement of the Kevill litigation; and
(c)any letter, email message or memo passing between Solomon Brothers and Beere & Meyer relating to the judgment entered against Topfox in favour of Kevill in the first action or any action related to that action.
The time and dates for final hearing of five days at 9.00am on 18, 19, 22, 23 and 24 December 2008 be changed to 9.00am on 10, 11, 12, 15 and 16 December 2008.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 64 OF 2007
| EVAN ROBERT VERGE AND GEORGE AUBREY LOPEZ |
Applicants
And
| DEVERE HOLDINGS PTY LTD |
First Respondent
| PACKHAM PTY LTD |
Second Respondent
| CASTLEWORLD PTY LTD |
Third Respondent
REASONS FOR JUDGMENT
Application
This application involves two separate requests for discovery by the applicants:
a)first, against the first and second respondents seeking discovery of three categories of documents from a schedule of documents, discovery of which is otherwise agreed;[1]
b)second, discovery is sought against a third party, Topfox Corporation Pty Ltd[2] who are not a party to the proceedings.[3]
[1] “Respondent’s Discovery”.
[2] “Topfox”.
[3] “Topfox Discovery”.
Issues
In both matters there are issues as to whether:
a)the Court ought to make a declaration that discovery is in the interests of the administration of justice;
b)if a declaration is made whether discovery ought to be ordered on general discretionary grounds.
The Topfox Discovery raises additional issues, namely:
a)whether the Court has the power to order non party discovery; and
b)if it has that power, how that power, and any discretion arising from the power, ought to be exercised.
Consideration
Discovery in the Federal Magistrates Court - principles
Section 45 of the Federal Magistrates Act 1999 (Cth)[4] provides as follows:
(1)Interrogatories and discovery are not allowed in relation to proceedings in the Federal Magistrates Court unless the Federal Magistrates Court or a Federal Magistrate declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery.
(2)In deciding whether to make a declaration under subsection (1), the Federal Magistrates Court or a Federal Magistrate must have regard to:
(a) whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and
(b) such other matters (if any) as the Federal Magistrates Court or the Federal Magistrate considers relevant.
[4] “FM Act”.
Rule 14.02 of the Federal Magistrates Court Rules 2001(Cth)[5] provides as follows:
(1)A declaration may be made under subsection 45 (1) of the Act to allow discovery on the application of a party or on the Court's own motion.
Note Discovery is not allowed in relation to a proceeding unless the Court or a Federal Magistrate declares that it is appropriate in the interests of the administration of justice: see section 45 of the Act.
(2)If a declaration is made, the Court or a Registrar may make an order for disclosure:
(a) generally; or
(b) in relation to particular classes of documents; or
(c) in relation to particular issues; or
[5] “FMC Rules”.
(d) by a specified date.
In Abrahams v Qantas Airways Limited[6] the Court observed that the legislation required that:
“… in considering an application for a discovery declaration determine whether the interests of the administration of justice, that is the interests of the management of justice, being the management by the Court of the proceedings pending before the Court, require such a declaration, and in so doing the Court “must have regard to” whether discovery “will be likely to contribute to the fair and expeditious conduct of the proceeding” and such other matters as the Court considers relevant””[7]
[6] (2007) 210 FLR 314; [2007] FMCA 639 (“Abrahams”).
[7] Abrahams FLR at 317 per Lucev FM; FMCA at para 11 per Lucev FM.
The Court arrived at this view having considered its earlier judgment in Genovese v BGC Constructions Pty Ltd[8] where it dealt with the meaning of the phrase “interests of the administration of justice” having regard to the decision of the High Court in BHP Billiton Ltd v Schultz[9].
[8] [2006] FMCA 1507 at paras. 24-25 and 28 per Lucev FM (“Genovese”).
[9] (2004) 221 CLR 400; [2004] HCA 61: see Abrahams at para. 9 per Lucev FM.
Having considered various cases in which this Court had dealt with discovery issues the Court further observed in Abrahams that:
“Relevance alone cannot be the test. Relevance is the essence of the traditional test for discovery. Traditionally, discovery is confined to the issues on the pleadings, [10] and a party is entitled to discovery of documents related to the issues, meaning that a document is relevant where it may (not must) advance a party’s own case or damage the opponents case, or lead to a course of inquiry which might do so.[11] Thus, documents which might explain the controversy between the parties are discoverable,[12] and documents relevant but otherwise inadmissible in evidence must be discovered.[13] But in this Court traditional discovery is prohibited by s.45(1) of the FM Act, unless the interests of the administration of justice, to be assessed having regard to the fair and expeditious conduct of the proceedings, and any other factor which the Court considers relevant, warrant the lifting of the prohibition. Relevance is clearly therefore a factor in determining whether it is in the interests of the administration of justice to lift the prohibition and may be a factor in determining whether discovery will be likely to contribute to the fair and expeditious conduct of proceedings, and may be an independent factor which the Court considers relevant under s.45(2)(b) of the FM Act. Relevance alone would not however appear to be sufficient to warrant a declaration under s.45(1) of the FM Act and a consequent order under r.14.02 of the FMC Rules for discovery. If documents are irrelevant then it can not be in the interests of the administration of justice that there be a declaration and order for discovery. Furthermore, such documents, because they are irrelevant, are not admissible in evidence, by reason of s.56(2) of the Evidence Act, 1995 (Cth).”[14]
[10] Mulley v Manifold (1959) 103 CLR 341
[11] Compagnie Financiere du Pacifique v The Peruvian Guano Co (1882) 11 QBD 55 at 63 per Brett LJ
[12] Donaldson v Harris (1973) 4 SASR 299 (“Donaldson”)
[13] Donaldson at 305; Austotel Management Pty Ltd v Jamieson (1995) 57 FCR 411 at 416-417 per Burchett J
[14] Abrahams FLR at 320 per Lucev FM; FMCA at para 22 per Lucev FM (the footnotes in the quote are the footnotes from the judgment cited).
The Court went on in Abrahams to summarise what was necessary in order to obtain an order for discovery in this Court, as follows:
“In summary, it appears that in order to obtain an order for discovery in this Court the Court must determine on the available evidence that it is in the interests of the administration of justice to do so, and in making that determination must have regard to whether allowing discovery would be likely to contribute to the fair and expeditious conduct of the proceedings, and such other matters as the Court considers relevant. Those other matters might include:
a) the relevance of any documents sought to be discovered;[15]
[15] Tran at para 13 per McInnis FM; Taylor at paras 8-9 per McInnis FM
b) the volume of documents sought to be discovered;[16]
c)whether there is a court book containing relevant documents, and the extent to which relevant documents are included in the court book;[17]
d) whether discovery would narrow the issues;[18]
e) whether both parties seek discovery;[19]
f) whether there is consent to discovery;[20]
g) whether discovery is “of benefit” in the litigation;[21] and
h) the effect of discovery on litigants, especially, vulnerable litigants.[22]
The categories of relevant factors for the purposes of s.45(2)(b) of the FM Act are obviously not closed.”[23]
[16] Tran at paras 3,8 and per McInnis FM
[17] NAQR at para 15 per Driver FM
[18] Ingui (No.2) at para 15 per Brown FM
[19] Ingui (No.2) at para 15 per Brown FM
[20] Ingui (No.2) at para 15 per Brown FM
[21] SZBHT at para 47 per Scarlett FM
[22] Lee at paras 11-12 per Coker FM
[23] Abrahams FLR at 321 per Lucev FM; FMCA at paras. 25-26 per Lucev FM (the footnotes in the quote are the footnotes from the judgment cited).
Discovery – general approach
The general approach to discovery is that set out by this Court in Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd (No 2)[24] where the Court said:
“Discovery is confined to what is in issue on the pleadings.[25] The documents sought must relate to the issue or issues, and may be relevant if they advance a party’s case or damage the other party’s case, alternatively, if they can lead to a course of inquiry having that effect: that is, that it throws light on the case.[26]
Pleadings in this Court include affidavits which have been filed, and the affidavits provide both particulars and evidence.[27]
Pleadings must be read broadly or liberally in the context of the application of these general principles, and a document deemed relevant for discovery purposes is one which helps explain the controversy between the parties.[28] A document deemed relevant for discovery purposes using these general principles must then be exposed to the test as to what is necessary in order to obtain an order for discovery in this Court as set out above.[29]”[30]
[24] [2008] FMCA 690 (“Sherwood Overseas”).
[25] Mulley v Manifold (1959) 103 CLR 341.
[26] Compagnie Financiere du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at 63 per Brett LJ; Donaldson v Harris (1973) 4 SASR 299.
[27] Olsen v Wellard Feeds Pty Ltd [2007] FMCA 1885 at para. 5 per Lucev FM.
[28] BC Cairns, Australian Civil Procedure (4th Edn), (North Ryde: LBC Information Services, 1996), p.363.
[29] See para. 5 above.
[30] Sherwood Overseas at paras. 10-12 per Lucev FM (the footnotes in the quote are the footnotes from the judgment cited).
Respondent’s discovery
This matter was argued before the Court on 8 August 2008. At that time the Court gave very short ex tempore Reasons for Judgment, and made the following orders:
“1.The First and Second Respondent’s give discovery on affidavit of the following documents by 20 August 2008:
(a)the letter from Solomon Brothers to Beere & Myer advising of the Applicants’ claims;
(b)any other letter, email, message or memo passing between either Devere or its solicitors and third parties including PPM relating to the settlement of the Kevill litigation; and
(c)any document comprising or relating to the agreement by Devere to indemnify Castleworld in respect of or relating to these proceedings and/or the Applicant’s claim.
2.The parties advise the Court by 4:00pm on 11 August 2008 if formal written reasons for judgment are required.
AND THE COURT DECLARES THAT:
3.Under s.45(1) of the Federal Magistrates Act 1999 (Cth) it is in the interests of the administration of justice that discovery be ordered in this matter.”
On 8 August 2008 the Court indicated that it was satisfied that the documents sought from the first and second respondents were:
a)relevant to the nature and value of the consideration in respect of the transaction concerned; and
b)relevant to the proper role of the Trustee in Bankruptcy having regard to the nature of, and policy and purpose behind bankruptcy legislation.
The first and second respondents requested detailed written Reasons for Judgment in accordance with order 2. What follows are those reasons.
In Verge & Anor v Devere Holdings Pty Ltd & Ors[31] the Court having set out s.120(1) of the Bankruptcy Act 1996 (Cth)[32] said as follows:
“In relation to s.120(1) of the Bankrupty Act it is relevant that “the court is required to assess the value of the consideration given.”[33] Section 120(1)(b) requires the Court to identify the consideration actually given by the transferee, rather than the consideration which might have been given but was not in fact given.[34] It must be remembered also that actions in bankruptcy are not necessarily strictly inter partes, but often actions for the benefit of creditors as a whole, and in that regard actions with an element of public and community benefit and interest.
It is that legislative context, and in particular the requirement for the Court to identify whether the particular transfer has been at an undervalue, that sets the broader context for consideration of the application for particulars in this case.”[35]
[31] [2008] FMCA 591 (“Verge”).
[32] “Bankruptcy Act”
[33] Victorian Producers’ Co-Operative Co Ltd v Kenneth (1999) 1 ABC (NS) 198 at 201 per Merkel J; [1999] FCA 1488 at para. 11 per Merkel J.
[34] Sutherland v Brien (1999) 149 FLR 321 at 327 per Austin J; [1999] NSWSC 155 at para. 21 per Austin J; Victorian Producers’ Co-Operative ABC at 202 per Merkel J; FCA at para. 18 per Merkel J.
[35] Verge at paras. 15-16 per Lucev FM (the footnotes in the quote are the footnotes from the judgment cited).
The considerations identified in Verge also relate to the issue of discovery.
Because:
“Valuation is not a science, it is an imprecise, opinionative activity involving the consideration of many variables, sometimes with equally legitimate outcomes”[36]
any information which might go to the valuation of the property, and, more particularly in this context, whether or not the property has been transferred at an undervalue, will be relevant for discovery purposes. It is also relevant to the proper role of the Trustee, which includes obtaining a valuation of the relevant property, sometimes without an on sight inspection, in which case information from the parties (and possibly third parties) will be relevant.
[36] Electricity Commission of New South Wales v Arrow (1994) 85 LGERA 418 at 419 per Kirby P.
The letter in order 1(a) relates to the consideration relied upon in part by the third respondent in their Defence in relation to the settlement of litigation involving Topfox (a company related to Devere and another party). In relates to a letter sent by the first and second respondents’ solicitors on 8 August 2007 advising that the solicitors for Topfox had been notified that the first and second respondents had ceased work in relation to a possible settlement of the aforementioned litigation as a consequence of the applicant’s claims in these proceedings. That letter, by reason of its timing and content may bear upon an objective assessment of the value of consideration for the property in question, as referred to by the third respondent in its Amended Defence.
The documents referred to in order 1(b) are relevant for the same reasons as those in order 1(a).
The documents referred to in order 1(c) relate to an indemnity provided by the first respondent, and Mr Fazio, a director of the first respondent to the third respondent in relation to the applicant’s claims against the third respondent. The nature, and value, of any indemnity may be relevant to an assessment of the value of the property, and whether it was transferred at an undervalue. That question might be one which might be affected by the relationship between the first and third respondents, and the indemnity may go to the nature of that relationship, or at least impact upon considerations associated with that relationship and its effect upon the value of any consideration for transfer of the property.
The Court is sufficiently satisfied that discovery of the above documents is of relevance to an objective assessment of the value of the consideration for the transfer of the property, or may set the applicants upon a train of enquiry relevant to that issue.
A declaration was therefore made that discovery of the documents was in the interests of the administration of justice because they were:
a)relevant;
b)of benefit to the litigation, in the sense that they were relevant to the proper role of a Trustee in Bankruptcy; and
c)in addition to the two foregoing categories, which co-relate to sub-paragraphs (a) and (g) of the other matters referred to in Abrahams and set out in paragraph 14 above, the fact that the documents are relevant to the proper role of a person appointed under statute to perform a function prescribed by the statute in accordance with the policy of the statute, probably constitutes a further matter in addition to those set out in Abrahams which the Court might consider relevant in making a declaration as to discovery.
Topfox discovery
Section 45 of the FM Act appears to be sufficiently broad to allow both inter partes and non party discovery. It is probably significant that it does not preclude non party discovery.
Rules 14.02 – 14.10 of the FMC Rules considered as a whole appear to contemplate inter partes but not non party discovery.
Under r.1.05 of the FMC Rules the Court may apply the Federal Court Rules where the FMC Rules are insufficient or inappropriate, and do so either in whole or in part and modified or dispensed with as necessary.
The first and second respondents say that the provisions of the FMC Rules are not insufficient, that non party discovery is a well known procedure, and in the absence of rules providing for non party discovery the Court has no power to order non party discovery. The first and second respondents say that this cannot be an inadvertent omission or oversight.
The first and second respondents’ submission however overlooks the fact that the Court will have power, drawn from the Federal Court Rules, if it considers in any case that the provisions of the FMC Rules are insufficient or inappropriate. This is not a case in which the provisions of the rules are inappropriate, but in which they are arguably insufficient, insofar as they do not provide for non party discovery.
In Buckingham v KSN Engineering Pty Ltd & Anor[37] the Court observed that:
“In considering the relevant procedural rules it is appropriate to note that this Court was not originally a court of pleadings. In Rana v University of South Australia[38] the Federal Court observed that:
a)the Federal Magistrates Court Rules 2001 (Cth)[39] do not require pleadings;
b)parties are not obliged to tender all their evidence when the Application and Response is filed; and
c)the Court should be cautious about summarily dismissing a proceeding.[40]
In some respects, the role of this Court has changed since the judgment in Rana. The FMC Rules were amended in 2007 to provide that applications might be commenced by the filing of a Statement of Claim or Points of Claim to which a Defence or Points of Defence might be filed in response, and in neither case was there a requirement for the filing of an affidavit.[41] Further, in 2006 this Court obtained significant jurisdiction under the WR Act, concurrent with that of the Federal Court in those matters in relation to which this Court was given jurisdiction. It is fair to observe that, where, as here, claims under the WR Act involve corporate entities or statutory bodies then the matter usually proceeds on pleadings, unless it is of such simplicity that pleadings are simply not necessary.
Because the FMC Rules are silent in respect of striking out pleadings the Federal Court Rules (Cth)[42] can apply so far as is necessary, because of the insufficiency of the FMC Rules.[43]”[44]
[37] [2008] FMCA 546 (“Buckingham”).
[38] (2004) 136 FCR 344; [2004] FCA 559 (“Rana”).
[39] “FMC Rules”.
[40] Rana FCR at 355 per Lander J; FCA at para. 75 per Lander J.
[41] FMC Rules, r.4.05(2)(b) and (3).
[42] “FC Rules”.
[43] FMC Rules, r.1.05(1) and (2)
[44] Buckingham at paras. 16-18 per Lucev FM (the footnotes in the quote are the footnotes from the judgment cited).
Those comments are apposite, with contextual amendment, to these proceedings.
In Verge the Court made comments in a similar vein specific to this case when it said:
“The Respondent submits that the request for particulars ought to be strictly construed in a case management context, particularly having regard for the fact that this Court is generally not a court which requires pleadings and is intended to be a court which operates at low cost with few interlocutory processes available.[45] Whilst those observations are generally true, it is nevertheless the case that the FMC Rules have, quite recently, been specifically amended to specifically allow cases to be commenced and continued on pleadings, and in this case the parties agree that the matter ought to be continued on pleadings, although originally commenced by application. Furthermore, the FMC Rules do provide for the provision of particulars and particulars have been provided in this case. Whilst the objects of the FM Act and FMC Rules encourage the Court to operate as informally and efficiently and expeditiously as possible in the exercise of the judicial power of the Commonwealth, it remains the case that the proper exercise of judicial power necessitates the proper consideration of applications (including applications for particulars) in the context of the case and the relevant legislation. There is no doubt that the case is a relatively complex one, and having been continued on pleadings, and some particulars having already been provided, it is now no answer to a request for further and better particulars to make general assertions about the nature and role of the court and the lack of interlocutory processes available to the Court.”[46]
[45] Rana v University of South Australia (2004) 136 FCR 344 at 355 per Lander J; [2004] FCA 559 at para. 75 per Lander J.
[46] Verge at para. 17 per Lucev FM.
The Court does not consider that rules with respect to non party discovery have been inadvertently omitted from the FMC Rules. Because of the nature of the work of the Court, particularly in its early years, it was likely thought unnecessary to unnecessarily clutter the FMC Rules with rules which might not be much used, but to include a provision (r.1.05) which allowed for a appropriate rules (in this case the Federal Court Rules) to be utilised where required.
The Court is therefore of the view that it has power to order non party discovery in an appropriate case, and to do so by using O.15A rl.8 of the Federal Court Rules.
The features governing the use of O.15A r.8 of the Federal Court Rules which provides for non party discovery are referred to in McIlwain v Ramsey Food Packaging Pty Ltd & Ors where the Federal Court said as follows:
“As to Order 15A, Rule 8, Nicholson J in McLernon Group Insurance Pty Ltd v. Biron Corporation Limited & Anor [1995] FCA 500 identified the features adopted by Burchett J in Richardson Pacific Ltd v. Fielding & Ors (1990) 26 FCR 188, governing the use of the rule. His Honour, Nicholson J, said:
"1. The purpose of the order is, quite expressly, to enable discovery to be obtained in some case where anything less than the broad obligations imposed by an order for discovery would simply not meet the case.
2. The rule provides a more practical and convenient means by which a party may obtain an opportunity to examine documents in advance of the hearing with sufficient time to take such further steps as a perusal of them may suggest.
3. The rule is intended, not for the general run of case, but for cases which do have about them something outside of the ordinary so that, by this means, the Court can go beyond what could be done upon a subpoena duces tecum issued in advance.
4. Normally an order for disclosure of documents by a stranger to proceedings should be made only when the stranger to the proceedings has the only copies of the particular documents, disclosure of which is sought, and the party to proceedings, who is seeking disclosure, has exhausted his or her rights with respect to discovery against the other party to proceedings.
5. That, however, is not a fetter restricting the applicability of the rule in cases where the evidence suggests it would provide an appropriate and reasonable solution to real problems.
6. In that particular case, there was a close relationship between the respondents and the non-parties sought to be subjected to the requirement of giving discovery and the relationship was quite unusual so that the circumstances were extraordinary.
7. In the drafting of orders sought for third party discovery tighter lines should be followed than may be usually the case, although circumstances may make a broad order appropriate.
8. A relevant consideration is whether it is plainly probable that there do exist documents relevant to the issues in the case which orders in the nature sought would be likely to bring to light.
9. The jurisdiction under the rules should be exercised with caution.
10. The exercise of the discretion to make an order under the rule should not be fettered by any precise rules and the above matters should be taken as general guides."”[47]
[47] (2005) 221 ALR 785 at 800 per Greenwood J; [2005] FCA 1233 at para. 33 per Greenwood J.
The features governing the use of O.15A r.8 of the Federal Court Rules must be adapted, when necessary, to take account of the objects of the FM Act and the FMC Rules requiring this Court to act expediently, efficiently and informally.[48] That approach is in the Court’s view in any event consistent with what is said above concerning the exercise of the discretion not being fettered and those matters being taken to be a general guide.
[48] FM Act, ss.3, 42; FMC Rules, r.1.03; Goodall v Nationwide News Pty Ltd [2007] FMCA 218 at para. 21 per Lucev FM.
In the context of this case it is relevant to note that this is, as the Court has previously observed, a case which is “relatively complex”[49] and a case which because of the number of parties involved, and the nature of the transactions involved, cannot be said to be a case in the general run of cases dealt with by this Court under s.120 of the Bankruptcy Act. The Court notes that a request has been made to Topfox for the documents now sought to be discovered, and apart from consent with respect to one category of documents, in respect of which orders have already been made by the Court, the request for discovery has been opposed by Topfox. No subpoena has been issued by the applicants but given the nature of the documents sought, and in particular the similarity with some categories of documents sought from the first and second respondents, the Court considers it appropriate to deal with this matter by way of a request for discovery rather than subpoena. There does not appear to be any dispute that Topfox is an entity with some relationship to the first and second respondents, and certainly the relationship is sufficiently close for the same solicitors and counsel to appear on their behalf.
[49] Verge at para. 17 per Lucev FM.
The documents in respect of which orders are sought by the applicants are as follows:
a)all of the correspondence between Solomon Brothers and Beere & Meyer relating to the proposal by Topfox and Devere to settle the Kevill litigation referred to in clause 1.4(a) of the Sale Agreement between Devere and Castleworld;
b)the letter from Solomon Brothers to Beere & Meyer advising of the applicants’ claims;
c)any other letter, email message memo passing between Topfox or its solicitors and third parties including PPM relating to the settlement of the Kevill litigation; and
d)any correspondence or evidence of other communications between Solomon Brothers and Beere & Meyer relating to the judgment subsequently entered against Topfox in favour of Kevill in the first action and the outcome of any other action.
In respect of the documents in (a) above Topfox has consented to provide discovery of those documents to the applicants, and an order of the Court has already been made in that regard.
Counsel for Topfox conceded that the orders sought in (b) and (c) above corresponded entirely with the categories of documents referred to in orders 1(a) and (b) of the orders set out at paragraph 11 above. In those circumstances, and for the same reasons as are set out at paragraphs 14-18 above, there will be orders that Topfox provide discovery of the documents referred to in (b) and (c) above.
The order sought 1(d) is relevant to the issues associated with the settlement of the Kevill litigation. That is relevant to the question of the value of the consideration given and its assessment in the context of clause 1.4(a) of the relevant sale contract relied upon by the third respondent in its Defence. The rationale is much the same as is set out at paragraphs 14-21 above. For that reason there ought to be discovery by Topfox of correspondence relating to the judgment entered against Topfox in favour of Kevill, and any related action. The terms of the order sought in (d) are in the Court’s view slightly wider than is necessary, and the terms of the order will be as follows:
“Any letter, email message or memo passing between Solomon Brothers and Beere & Meyer relating to the judgment entered against Topfox in favour of Kevill in the first action or any action related to that action.”
Hearing dates
This matter is presently listed for final hearing of five days at 9.00am on 18, 19, 22, 23 and 24 December 2008. Those dates will be changed to 10, 11, 12, 15 and 16 December 2008.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 29 August 2008
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