William Buck (WA) Pty Ltd v Faulkner [No 5] - [2013] WASC 206

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: WILLIAM BUCK (WA) PTY LTD -v- FAULKNER [No 5] [2013] WASC 206

CORAM: KENNETH MARTIN J

HEARD: ON THE PAPERS

DELIVERED : 27 MAY 2013

FILE NO/S: CIV 2995 of 2011

BETWEEN: WILLIAM BUCK (WA) PTY LTD
First Plaintiff
WILLIAM BUCK HOLDINGS (WA) PTY LTD
Second Plaintiff
AND
CRAIG PETER FAULKNER
First Defendant
LEDGER FAULKNER PTY LTD
Second Defendant
CSF CORPORATE PTY LTD
Third Defendant
(BY ORIGINAL ACTION)
CRAIG PETER FAULKNER
Plaintiff
AND
WILLIAM BUCK (WA) PTY LTD
First Defendant
WILLIAM BUCK HOLDINGS (WA) PTY LTD
Second Defendant
MARK PETER COLLINS
Third Defendant
STEPHEN KENNETH BREIHL
Fourth Defendant
CHRISTOPHER JOHN BROWN
Fifth Defendant
FRANK DEL BORRELLO
Sixth Defendant
DAMON ALLAN HARRIS
Seventh Defendant
ROBIN BOYD JUDD
Eighth Defendant
(BY COUNTERCLAIM)

FILE NO/S :COR 174 of 2011

MATTER :WILLIAM BUCK HOLDINGS (WA) PTY LTD
BETWEEN :CSF CORPORATE PTY LTD
Plaintiff
AND
WILLIAM BUCK HOLDINGS (WA) PTY LTD
Defendant

Catchwords:

Document - Subpoena - Leave to issue to defendant during trial - Day eight - Nominal damages case for breach of employment agreement - Futility - Leave to interrogate - Oppression action

Legislation:

Corporations Act 2001 (Cth), s 233, s 467(4)
Rules of the Supreme Court 1991 (WA), O 36B, O 4A r 5(1)(d)

Result:

Leave to issue a subpoena refused
Limited number of interrogatories allowed

Category: B

Representation:

CIV 2995 of 2011

Original Action

Counsel:

First Plaintiff                :     No appearance
Second Plaintiff            :     No appearance
First Defendant            :     No appearance
Second Defendant        :     No appearance
Third Defendant           :     No appearance

Solicitors:

First Plaintiff                :     Solomon Brothers
Second Plaintiff            :     Solomon Brothers
First Defendant            :     Bennett & Co
Second Defendant        :     Bennett & Co
Third Defendant           :     Bennett & Co

Counterclaim

Counsel:

Plaintiff:     No appearance
First Defendant            :     No appearance
Second Defendant        :     No appearance
Third Defendant           :     No appearance
Fourth Defendant         :     No appearance
Fifth Defendant            :     No appearance
Sixth Defendant           :     No appearance
Seventh Defendant       :     No appearance
Eighth Defendant         :     No appearance

Solicitors:

Plaintiff:     Bennett & Co
First Defendant            :     Solomon Brothers
Second Defendant        :     Solomon Brothers
Third Defendant           :     Solomon Brothers
Fourth Defendant         :     Solomon Brothers
Fifth Defendant            :     Solomon Brothers
Sixth Defendant           :     Solomon Brothers
Seventh Defendant       :     Solomon Brothers
Eighth Defendant         :     Solomon Brothers

COR 174 of 2011

Counsel:

Plaintiff: No appearance
Defendant: No appearance

Solicitors:

Plaintiff: Bennett & Co
Defendant: Solomon Brothers

Case(s) referred to in judgment(s):

Nil

KENNETH MARTIN J: These two actions are being heard together. Currently their trial stands adjourned part‑heard, uncompleted after expiry of the eight allocated days for hearing between 18 ‑ 27 March 2013. As background, I refer generally to pages 1022 ‑ 1039 of the trial transcript of 27 March 2013, commencing at about 4.15 pm on day eight at completion of the evidence of one of the witnesses called by the plaintiffs in CIV 2995 of 2011 (and defendant in COR 174 of 2011), Ms Helen Withers. For convenience, I refer to the plaintiffs in CIV 2995 of 2011 and defendant in COR 173 of 2011 henceforth as the 'William Buck parties'. I refer to the defendants in CIV 2995 of 2011 and Mr Craig Faulkner's related companies, including CSF Corporate Pty Ltd (CSF Corporate), the plaintiff in COR 174 of 2011, as the 'Faulkner parties'.
The first issue for resolution is an application on behalf of the William Buck parties for leave to issue a further subpoena requiring the production of documents. The subpoena is directed to Faulkner & Co Pty Ltd (Faulkner & Co).
On day eight of the trial, I made an order there be no further subpoenas issued by either side without my leave (ts 1025). At that point the trial was about to be adjourned part‑heard to an uncertain resumption date. That was after the eight allocated hearing days, with the William Buck parties' (who had gone first) cases still incomplete and in anticipation of the William Buck parties needing to call at least a further five witnesses, namely Messrs Breihl, Brown, Del Borello, Harris and Hunter.
The Faulkner parties only identified one witness as a potential trial witness in both actions. That was Mr Craig Faulkner himself. Mr Faulkner had provided his witness statements and had been listed as a witness on behalf of the Faulkner parties at trial.
At the end of day eight, I had been canvassing administrative issues with respective counsel for the parties, including likely duration of the extra hearing days required to complete the trial, respective availabilities of counsel (and the court) and the overall state of the trial, pending what then looked to be a period of substantial adjournment before resumption. Subsequently, after administrative communications between the parties and the court, it was resolved that the trial is to be resumed and completed across a further four trial days between 24 ‑ 27 June 2013.
During these day eight discussions with counsel (see ts 1022 ‑ 1039), counsel for the Faulkner parties (whose evidentiary cases from a viva voce witness perspective have not begun) indicated he was giving thought to not calling Mr Faulkner as a witness (ts 1023). That possibility as then articulated appears to have caused some immediate surprise to counsel for the William Buck parties. He immediately made an oral application to issue a further document subpoena, as well as foreshadowing an application for leave to interrogate Mr Faulkner (see ts 1025). I indicated that these issues would need to be resolved on the papers in the interval before the trial resumed.

Leave to issue document subpoena

A draft subpoena was provided to the court on 12 April 2013. Written submissions were also provided in support of leave. The draft is directed to Faulker & Co, the new company name for the second defendant in CIV 2995 of 2011, formerly named Ledger Faulkner Pty Ltd (Ledger Faulkner).
Before trial in CIV 2995 of 2011 Ledger Faulkner had previously been served with (and answered) one document subpoena of 12 October 2012. By that subpoena William Buck then sought:
For the period between 1 December 2010 and 1 November 2011 all documents (whether in paper or electronic form), in your custody, possession or power, including letters, emails, text messages and other communications between Stephen Alan Ledger and Craig Peter Faulkner or between any other person(s) on behalf of either of them, and all other documents (whether in paper or electronic form) in your custody, possession or power, including file notes, diary entries and memoranda, relating to:

1.any proposal for a possible business relationship between Stephen Alan Ledger and Craig Peter Faulkner or companies related to either of them; or
2.the proposed or actual incorporation, or the structure, or operation, of Ledger Faulkner Pty Ltd ACN 153 449 391.

The written submissions of the William Buck parties accept that prior to trial they had issued seven subpoenas, across October to December 2012. Prior to trial the Faulkner parties had issued 15 subpoenas.
Between themselves the parties all gave discovery of documents by reference to agreed categories. I made orders regarding these categories of discovery in April 2012, well before the trial began.
At the conclusion of day eight of trial, counsel for the William Buck parties articulated his intention to issue the further document subpoena (ts 1025). This was after his observing that a prospect of Mr Faulkner not giving evidence at trial was the 'first time this has ever been mentioned to me' (ts 1025). Counsel also said:
What I am dealing now with is a purely documentary case which is entirely new to me, comes as a major surprise given I applied for the evidence in the main case to be given by the applicant first and that was refused.
See also ts 1026.
I indicated that leave to issue a further subpoena would be required from me as the trial judge and that a formal application for leave should be made, supported by proper materials, along with a draft of the proposed subpoena.
The subpoena is proposed to be issued out of CIV 2995 of 2011, to the second defendant in that action, Faulkner & Co. A raft of documents are sought, essentially, as regards 66 different named entities, defined as 'Relevant Clients' of Faulkner & Co, for:
1.All written and electronic documents and records recording the amount of time spent by any director, officer or employee of Faulkner & Co Pty Ltd (formerly named Ledger Faulkner Pty Ltd) ('the Company') in or in connection with the Company providing professional accounting services in the period from September 2011 to March 2013 (both inclusive) (the 'Relevant Period') to each of the following persons;
The draft subpoena would also demand from Faulkner & Co:
2.copies of all invoices rendered by [Faulkner & Co Pty Ltd] to any of the Relevant Clients during the Relevant Period; and
3.the financial statements … of [Faulkner & Co Pty Ltd] for its first financial year …
So what would be sought, were leave granted, is both written and electronic time records for professional accounting services across an 18‑month period. All invoices and Faulkner & Co's financial statements for its first financial year are sought as well.

Context of the trial for CIV 2995 of 2011

The application for leave arises in circumstances where, in CIV 2995 of 2011, out of which the draft subpoena is proposed to be issued, the William Buck parties are seeking only nominal damages for alleged 'solicitation' of the William Buck parties' clients. That truncation to the scope of the plaintiffs' damages case in CIV 2995 of 2011 emerged, so far as the court is concerned, from the time of the written outline of opening submissions for trial (dated 14 March 2013). This document announced at par 28:
With respect to the claim for damages in CIV 2995 of 2011, the claim is pressed only for nominal damages. Accordingly, only one instance is relied on constituted by the documents at TB 1506 ‑ 10. The relevant breach is of the covenant in cl 14.2 of the Employment Agreement (TB 262 ‑ 276), read with the definitions in cl 14. The breach is connected with the issues in dispute in COR 174 of 2011 and the counterclaim in CIV 2995 of 2011: the conduct was to induce clients of William Buck to become clients of Ledger Faulkner Pty Ltd which [Mr Faulkner] had negotiated to incorporate and operate before his dismissal …
By the monetary jurisdictional thresholds of the Supreme Court (even the District Court) of Western Australia the financial parameters of CIV 2995 of 2011 are tiny, especially balanced against eight days of a trial (now looming as a 12 day trial).
In that action, the second of the William Buck plaintiffs, William Buck Holdings (WA) Pty Ltd (William Buck Holdings) also seeks a repayment of the balance of a loan it made to CSF Corporate, in an amount of $28,879.92, plus interest at 10%.
By counterclaim in CIV 2995 of 2011, Mr Faulkner seeks damages for the alleged breach of his employment contract with William Buck (WA) Pty Ltd. However, even if his alleged wrongful breach is established by Mr Faulkner, the amount of his damages assessed for loss of his employment must be measured over a very limited period of only four weeks, because an initial notice of termination, given to him on a plenary basis without need for cause, would apply. Hence the damages amount the subject of Mr Faulkner's counterclaim, if made good, is only $11,538.46, plus his claim for interest at 6% per annum calculated from 25 October 2011, until the expiration of a four‑week notice period: see Plaintiff by counterclaim's particulars of loss and damage for the purposes of par 48 of the Amended Defence and Counterclaim filed 18 March 2013.
Any financial 'sting' has dissipated from CIV 2995 of 2011 since the William Buck parties' claims against Mr Faulkner became confined to only nominal damages over alleged breaches of Mr Faulkner's employment contract. This had been based on so‑called 'solicitation' of William Buck clients after his termination as an employee of William Buck (WA) Pty Ltd in September 2011.
Absent my orders requiring leave, issuing a further subpoena after day eight of the trial, seeking more documents from the second defendant was theoretically possible without leave by O 36B of the Rules of the Supreme Court 1971 (WA). The former O 36 r 15A(2), before repeal and replacement by O 36B in February 2007 would have allowed an issue of a subpoena for documents at a resumed trial, as long as the 14 days post service time allowance was afforded. But in a context of an action now truncated to seeking only nominal damages, it is unthinkable to be pursuing documents whose relevance may only be to show loss or damage by reason of alleged solicitation. I ordered that there be no further subpoenas be issued by either side without my leave (see O 4A r 5(1)(d) of the Rules of the Supreme Court 1971 (WA)). The expense and inconvenience of such a foreshadowed subpoena exercise in CIV 2995 of 2011, given only nominal damages are sought, simply cannot be justified. This raises the further question of whether it would be appropriate to issue the subpoena out of COR 174 of 2011, in which a much graver remedy of compulsory winding up is sought.
As the William Buck parties' written submissions refer to the two actions being heard together and the evidence in one standing as evidence in the other, it is appropriate for me to deal with that contingency now to clarify the position and avert any potential delay.
In COR 174 of 2011, the action is brought by CSF Corporate as trustee of Mr Faulkner's trust. CSF Corporate contends for statutory oppression relief via the Corporations Act 2001 (Cth) against William Buck Holdings.
Before examining the oppression action and evaluating any possible basis to grant leave to issue the draft subpoena out of that action, I must say something more about what is pleaded concerning alleged solicitation, and in that context refer to express provisions in the parties' employment contract.

The employment contract

The employment agreement is in the trial bundle vol 1 at pages 262 ‑ 267. It is seen to be an agreement between William Buck (WA) Pty Ltd and Craig Peter Faulkner. The relevant clause said by the William Buck parties to have been breached by Mr Faulkner in CIV 2995 of 2011, reads:
14.2Restraints
The employee must not within the Restricted Area and during the Restricted Period engage or attempt to engage in any Restricted Activity.
The term 'Restricted Area' means either Western Australia or Perth. The 'Restricted Period' can range between either 12 months or three months. But the critical definition for cl 14.2 is that of 'Restricted Activity' found at cl 14.1(c), in terms:
Restricted Activity means to: …
2.Cause any client to cease doing business or reduce the amount of business it does with the Employer Group.
(See the definition of 'Client' at cl 14.1(d).)
I put aside difficulties in ascertaining when the so‑called 'Restricted Period' runs from and between. This is far from clear. A more critical definitional problem that arises with cl 14.2, however, is that the incorporated defined term 'Restricted Activity' is most unhelpfully (from the perspective of the William Buck parties) defined by reference to the word 'cause', as used in the phrase, 'cause any client to cease doing business'.
There is an issue of construction arising out of these definitions. That is whether cl 14.2 would extend to prohibit an unfulfilled attempt to solicit. It is far from clear that the very cumbersome cl 14.2 would achieve that end, by reason of the incorporated definition of 'Restricted Activity'. But I assume for present purposes that it would (although this may be a matter of generous construction).
A greater difficulty in the present case is that the William Buck parties do not plead a breach of the employment contract by reason of any bare attempt to engage in a Restricted Activity. They plead the fact of actual solicitation. In the William Buck parties' amended statement of claim in CIV 2995 of 2011, see pleas in par 7.3 (as regards 'soliciting any client of William Buck (WA)'), par 13 (as regards asserted breach of the term of the agreement pleaded in par 7.3) and specifically at par 19.2.3 (as regards alleged 'causing harm to the William Buck (WA) Group': see particulars H(ii) which read:
solicited the business of clients of the WB Group (as pleaded in par 13 above)'
See further, the plea for damages at par C of the prayer for relief by William Buck (WA).
The pleas in CIV 2295 of 2011 all proceed on a basis of asserted solicitation damage already suffered, that was caused by clients of the William Buck Group having been 'solicited' (past tense) by a defendant in that action. But only nominal damages for alleged beach are pursued. This is problematic for the William Buck parties.
The problem is that the definition of 'Restricted Activity' is not engaged as the William Buck parties chose to pursue only nominal damages on the express basis that causing of damage was too difficult to prove. That term by its use of the word 'cause' is a snare. By not showing any client has been caused to leave, there is no 'Restricted Activity'. Accordingly, there is failure to show a breach of cl 14.2.
It is not just simply then a case of breach and the pursuit of nominal damages. It is a case of failure to establish any underlying breach. I repeat there is no relevant plea of a bare attempt to solicit as the breach. The plea is that the actual outcome of client solicitation occurred.
The same phenomenon manifests in the defence pleaded for William Buck Holdings in the statutory oppression action, COR 174 of 2011. If the point of pursing more documents would be to show breach conduct that bears upon a defence to statutory oppression, giving up on causation in CIV 2995 of 2011 undermines the proving of any such breach. Some justification needs to be shown to seek more documents concerning how much work Faulkner & Co has carried out and its fee invoices rendered for former clients of William Buck (if that is the case) post September 2011.
There is an even wider question, which I do not need to presently resolve, as to whether any proven solicitation activities of Mr Faulkner, or of Faulkner & Co for that matter, could have relevance to defending the statutory oppression action? As an aspect of Mr Faulkner's entry into the William Buck so‑called partnership from 1 July 2008 CSF Corporate, his trustee company, subscribed for 300,001 shares in William Buck Holdings, at a total subscription price of $300,000. Of that subscription amount, $200,000 was paid over directly by CSF Corporate. The remaining $100,000 was met by way of vendor finance provided from William Buck Holdings. The $100,000 loan to CSF Corporate was partly repaid over time. The loan now stands reduced to an amount of $28,879.92 plus interest, and is claimed in CIV 2995 of 2011 against CSF Corporate.
For COR 174 of 2011 the essential contention of CSF Corporate is that it, as a residual (one-ninth) minority shareholder, has essentially been excluded from management of the holding company while it still holds 300,001 shares. CSF Corporate contends that its exclusion from management has occurred before and after Mr Faulkner was forcibly terminated from his employment agreement and ejected from an alleged William Buck Group 'partnership' or 'quasi‑partnership' in September 2011. CSF Corporate pleads that the conduct of William Buck Holdings has not been in the best interests of all the shareholders of the William Buck Group as a whole (see par 9 of the Faulkner parties' further amended statement of claim in COR 174 of 2011).

By the Faulkner parties' further amended statement of claim, alleged statutory oppression by the holding company is pleaded by reference to events occurring subsequent to the termination of Mr Faulker's employment and directorship (see averments at pars 12.1, 12.2 and 12.3). In short, these pleas contend William Buck Holdings has continued, after the forced ejection of Mr Faulkner in September 2011, to carry on business using goodwill and capital of that William Buck Group (ie, thereby including share capital to an extent of $300,001 as was subscribed for CSF Corporate).
Paragraph 12.3 expressly pleads that William Buck Holdings as defendant has made 'dividend payments to each of the shareholders of the defendant, except for the plaintiff'. Plainly that conduct is raised as an alleged act of discrimination against CSF Corporate.
The relief sought by CSF for alleged statutory oppression, seen at par 13, is winding up pursuant to s 467(4) of the Corporations Act 2001 (Cth) or s 233 of the Corporations Act. Alternative relief, as sought, extends to orders 'that the plaintiff's shares be purchased at a price reflecting the true value of the shares adjusted to make proper allowance for the conduct of the defendant' (see par 14).
By the defence filed on 1 December 2011 in COR 174 of 2011 William Buck Holdings seeks to raise a number of matters by alleged misconduct of Mr Faulkner occurring before September 2011. In particular, it is pleaded by the defence at 10.5.
10.In further answer to the matters pleaded in paragraph 10 of the SoC, the defendant relies on paragraph 12 below and says further that:
…
10.5in breach of his employment agreement with William Buck (WA) Pty Ltd, Mr Faulkner has:
10.5.1solicited the business of clients of the William Buck (WA) Group;
PARTICULARS OF SOLICITATIONS:
A.An email sent to Mr Faulkner to Ben Trigger of Netlink at 6.48 pm on 8 October 2011;
B.Further particulars to be supplied after discovery in CIV 2995 of 2011.
Further pleas seen in the defence at par 11 manifest as a general denial to pars 11 to 14 of the statement of claim, with the further plea at par 12, that:
12.In further answer to the whole of the SoC, the defendant says that over an extended period of time Mr Faulkner executed a systematic plan to leave the William Buck (WA) Group after unlawfully:
12.1building up the number of clients of the William Buck (WA) Group for whom he acted for the purpose of having as many of those clients as possible follow him when he left the William Buck (WA) Group;
…
12.3by reason of the matters referred to in 12.1 and 12.2 above, causing harm to the William Buck (WA) Group.
PARTICULARS
…
F.Mr Faulkner incorporated his new practice Ledger Faulkner Pty Ltd (ACN 153 449 391) on 27 September 2011 (of which Ledger Corporate Pty Ltd was a founding shareholder) prior to being given notice of the termination of his employment by William Buck (WA) Pty Ltd; and
…
H.After termination of his employment, and in contravention of the terms of his employment agreement, Mr Faulkner:
…
(ii)solicited the business of clients of the William Buck (WA) Group (as pleaded in par 10.5.1 above).
Some acts of alleged solicitations are given by further and better particulars of the defendant's defence, as regards 26 different clients at different times, although not all of the 66 client entities the subject of the draft document subpoena.
The defence put against the statutory oppression action from the William Buck Holdings defendant is the alleged misconduct by Mr Faulkner personally not misconduct by the statutory oppression action's plaintiff, CSF Corporate. What is raised more particularly, is alleged William Buck client solicitation by Mr Faulkner not attempted solicitation. This misconduct allegation grates, as a matter of coherence, against the simultaneous abandonment of causation and a much truncated pursuit of only nominal damages in CIV 2995 of 2011.
The William Buck parties argue the matter in their written submissions in support of leave to issue the further subpoena to Faulkner & Co:
6.The point has previously been made during oral argument, and in paragraphs 3 and 28 of the pre-trial written submissions, by counsel for the William Buck parties that the fact that the William Buck parties are only pursuing a claim for nominal damages from Mr Faulkner's solicitation of clients in the CIV 2995 of 2011 matter means that the William Buck parties have abandoned their causation argument with respect to providing substantial damages, but they are still pursuing a claim for nominal damages without the requirement to prove causation: see transcript page 1031. That the William Buck parties are not pressing causation of substantial damages has not limited their pleaded case in COR 174 of 2011 because causation of loss has never been pleaded in the defence to the COR 174 of 2011 matter.
That argument does not recognise the negative consequences delivered by using the word 'cause' in the definition of 'Restricted Activity'. As I have already observed, giving up on causation in CIV 2995 of 2011, correlatively means a giving up on showing a Restricted Activity that in turn (as the case has just been pleaded in terms of asserted actual solicitation in both actions) means giving up on proving any breach of cl 14.2 of the employment agreement. As I have said, there is no plea of attempted solicitation in either action.
A rationale for the document subpoena to Faulkner & Co is further argued for at par 7 in the William Buck parties' submissions:
7.As now pressed at trial, CSF Corporate Pty Ltd asserts oppression through not receiving the amount of dividends paid to other shareholders since September 2011. The defendant in COR 174 of 2011 ('Holdings') wishes to answer that claim by proving the financial benefit obtained by Mr Faulkner and his companies in earning income from former William Buck clients since September 2011, in circumstances where:
7.1had Mr Faulkner remained an equity director of William Buck, the income derived from those clients would have been earned by the William Buck group and available to be used to pay dividends to all shareholders of Holdings;
7.2Mr Faulkner has not contributed any of that income to Holdings to enable it to pay CSF Corporate Pty Ltd any dividends; and
7.3a substantial part of the income of Faulkner & Co Pty Ltd has been earned by servicing former clients of William Buck.
8.Leave is sought to issue the subpoena to obtain evidence for that purpose.
That rationale, putting forward a client solicitation quantification benefit amount vis-à-vis Mr Faulkner's actions as an answer to corporate oppression, seems to rest in the argument grounded on a generalised notion of overall 'fairness'. As to that, counsel for the William Buck parties said at ts 1029:
He has paid nothing for them. I am not claiming damages for them. I am saying the statutory test here is one of fairness or unfairness, at least, or negating unfairness on my side, so if fact on one side of the equation he says, 'I am not getting a return in terms of dividend payments because you are not paying me dividends even though I haven't participated at all in producing that income; these are amounts that are paid to the working directors, but my complaint is I am oppressed by not receiving them', on the other side of the equation, he is servicing a large suite of clients that were formerly William Buck clients that he now services.
I want to prove how much he has billed them, what percentage of his practice that is and how much he has made, because in the overall fairness equation, it becomes very material so that subpoena I want leave to issue to Faulkner Corporate, as it is now called, the time records, the billing records for - and I will give them - the list of clients - …
See as well ts 1030.
At ts 1031 counsel for the William Buck parties elaborated as regards this fairness/unfairness defence to statutory oppression:
… the damages claim involves me proving causation as well. What I am essentially abandoning is causation. What I am saying is he has solicited these people. It may be the case, and I am not prepared to waste the time proving it, that these people might have wanted to go with him anyway and so the solicitation didn't cause the loss. So I am sticking in the CIV action just to nominal damages which means I don't have to go in and call all these people and run a major factual inquiry about causation.
With respect to the corporation matter causation is out of the question. It is not part of the equation. It is simply part of the overall equation of the fairness of the matter and the fairness of the matter involves looking at the totality of the position.
Numerous difficulties present from this approach. These are:
(1)There is the point that I have addressed concerning the pleading of only actual solicitation and the effects of the inconvenient word 'cause', as used in the definition of 'Restricted Activity'. Giving up on causation means, as pleaded, giving up on proving breach. Absent breach there presents no other bases for any illegitimacy in Mr Faulkner or Faulkner & Co, providing professional assistance to former William Buck clients, post September 2011.
(2)In the corporations action there is no discernible defence plea of general fairness. There are only pleas to which I have referred. The most relevant of these (seen at par 10.5.1) pleads only a breach of Mr Faulkner's contractual employment agreement with William Buck (WA) Pty Ltd, on the basis Mr Faulkner solicited business from clients of the William Buck Group.
(3)The claim for relief from statutory oppression by CSF Corporate stands to be evaluated within the relevant overall context of the corporate arrangements surrounding or accompanying Mr Faulkner's entry to, then departure from, a William Buck Group 'partnership' or 'quasi‑partnership', including as to remuneration from all sources. But relationship legalities pertaining to what arose as regards 300,0001 shares purchased and issued to CSF Corporate cannot be glossed over or pushed aside as incompatible with an overall 'fairness' outcome. The dispute is, at the end of the day, a 'loose end' in a partnership or quasi‑partnership 'bust‑up' with a forced partner exit scenario. Share capital of $300,001 subscribed for by CSF Corporate as an equal one‑ninth holding (at the time) in the William Buck holding company within the overall William Buck Group (WA) was substantial. That capital sum stands as subscribed and still held, notwithstanding Mr Faulkner's September 2011 departure. It is a $300,001 'loose end' over CSF Corporate's share capital left hanging. The circumstances in which Mr Faulkner as employee and director left William Buck, or how a company owned by him carries on business, does not self‑evidently explain how this 'loose end' should be addressed. The same is true of Mr Faulkner's residual personal guarantee of a portion of the operating business loan by lenders to the William Buck Group, which still sees him personally exposed to be called on a portion of that loan.
(4)Another documentary excursion, proposed by the further subpoena, could only be justified now, if it were pursuing something significantly wrongful or illegitimate in a servicing of clients by Mr Faulkner or Faulkner & Co vis‑à‑vis the William Buck Group. Absent the realistic prospect of showing a breach of cl 14.2 (assuming in favour of the William Buck parties that the restraint of trade clause is not to be otherwise struck down as unenforceable as an unlawful restraint against trade) there exists no other pleaded rationale for why Faulkner & Co would be inhibited from servicing as many former William Buck clients as it can and generating as much revenue as it lawfully can, in the process. An argument that such work or billings post September 2011 can be raised as against CSF Corporate, as a matter of overall fairness or unfairness as a defence to the oppression action lacks a foundation as things stand.
(5)A prospect of more trial time being consumed by exploring the results of the proposed document subpoena excursion against the second defendant in CIV 2995 of 2011, is abhorrent. That is especially so given that all eight originally allocated days for the trial have been consumed, and the William Buck parties have not yet completed even their own cases. The second defendant to CIV 2995 of 2011 has already answered one subpoena and given discovery. Turning over yet more documents, beyond the substantial volumes of documents in the existing trial bundle (especially bearing in mind the relatively small amounts at issue in both cases) cannot be countenanced now, from a proportionality of resources perspective. The $300,000 share capital dispute would not justify the expense involved.
(6)I reject suggestions that there has been a late change of case as regards dividend payment arguments, pursued by the Faulkner parties in COR 174 of 2011. There is more than a hint in the written submissions of the William Buck parties that, somehow, the Faulkner parties have been afforded some favourable indulgences at trial on that issue. However, the oppression plea in the further amended statement of claim in COR 174 of 2011 to which I have referred, particularly under par 12.3 as regards dividend payments to entities other than CSF Corporate post September 2011, is explicit.
A grievance in the William Buck parties' submissions about that issue only emerging during trial, does not have a basis. It was put in par 4 of the submissions that 'the statement of claim in the COR matter makes no reference to the number of dividend payments or the amount of dividends'. That is not to the point. These are matters for evidence. There is an adequate plea providing the required material facts by CSF Corporate as regards the dividends. The number of dividend payments and the amount of the dividends was explored during trial, including with Mr Mark Collins (the managing director and first witness on behalf of the William Buck parties) being required as regards proving the dividends paid to produce minutes of meetings about that during cross‑examination (see ts 529). The minutes relevant to dividends ought to have been provided earlier on discovery, as regards the dividends issue. None of this can be legitimately put at the doorstep of the Faulkner parties.
Leave to issue the draft subpoena is refused.

Draft Interrogatories

I now deal with the separate draft interrogatories. The William Buck parties seek leave to administer interrogatories to Mr Faulkner.
The William Buck parties' justification for seeking leave very late to issue interrogatories is that it has only now been appreciated that there is a possibility Mr Faulkner may not give evidence at the trial.
The William Buck parties made application by counsel at the commencement of the trial for the Faulkner parties to start in both actions. I declined that application. But I see no real prejudice to Mr Faulkner in allowing leave to issue some interrogatories.
The two actions have been tried together for convenience. The William Buck parties have gone first in both actions, even though William Buck Holdings is the defendant in the oppression action.
It would not be unfair to accommodate some interrogatories out of COR 174 of 2011, for legitimate questions. They can be administered and answered between now and the recommencement of the trial. I see no prejudice to Mr Faulkner or to CSF Corporate in that course being allowed.
In the circumstances, I will allow an opportunity to interrogate as per the draft interrogatories pars 1, 2, 3.1, 3.2, 3.3.1, 3.3.3, 3.3.3.1, 3.3.3.2 and 3.3.3.3, only. The interrogatories should be administered and answered on oath by Mr Faulkner, no later than 14 days before the resumption of the trial on 24 June 2013.
The balance of the draft interrogatories I refuse to allow present as either irrelevant to true issues in the case, or conceptually flawed as drawn (for instance by impugning the discovery given in the case by the Faulkner parties).
Save for the limited interrogatories above that I allow, the application for leave to interrogate is otherwise refused.

Costs

The William Buck parties should pay the taxed costs of this application, resolved as it has been on the papers.