ADJOURNMENT APPLICATION
64 What now follows is a record of the reasons given by the Court for refusing to defer judgment on the discovery application and to adjourn the proceedings on the application made by Operations through its representative Mr Martin. The oral reasons commenced with a statement to the effect that the Court had made orders joining the company Operations as a respondent in the proceedings. That reference was incorrect. As explained in Hillier No 3, the relevant order was that granting leave to the applicant to join Operations as a party, which leave had not been exercised at the time that the adjournment application was made, although Counsel for the applicant had indicated that it would be.
65 Against that background, the oral reasons proceeded substantively as follows.
66 In support of the adjournment application, Operations relies on the affidavit of Mr Martin affirmed on 25 June 2021.
67 Much of the affidavit contains depositions in the nature of submissions that reflect submissions that have been made in opposition to the discovery application on behalf of the respondent in her capacity as a present party. In addition to seeking the opportunity to make those submissions on behalf of Operations in its own right, Mr Martin submitted that the order for discovery, although directed to the respondent, was one that affected the property of Nordburger Holdings Trust of which Operations is the trustee. Mr Martin pointed to the circumstance that Operations had only just been joined and hadn't yet been served. He submitted that Operations was a party in respect of whom the Court should afford procedural fairness, as is the entitlement of any party in a proceeding.
68 Mr Martin referred to the interests of the beneficiaries of the trust as being distinct from the interest of the respondent in her own capacity and right. Mr Martin pointed to the desirability of Operations having separate legal representation because the interests of the beneficiaries represented by the trustee company did not necessarily coincide with those of the respondent personally. Generally speaking I accept that that to be the case.
69 Mr Martin pointed to the circumstance that there were provisions under the Trustee Act for the provision of information to a person having an interest in the trust, including a beneficiary of the trust.
70 Mr Martin based the adjournment application on there being a need for more time for Operations to arrange legal representation to represent the interests of the Nordburger Holdings Trust insofar as they diverge from those of the respondent. That included for the purposes of obtaining legal advice as to whether or not to commence an application for advice and directions in the Supreme Court of South Australia under the Trustee Act, specifically about whether or not to oppose the discovery application and, if so, on what basis.
71 Mr Martin also submitted that the applicant had alleged in an affidavit that he needed access to documents for certain purposes. Whilst he was not specific, Mr Martin asserted from the bar table that he had in his possession documents that contradicted the assertions of the applicant in that regard.
72 Mr Martin submitted that the respondent had conducted the proceedings with a degree of restraint, but that is not necessarily the approach to the litigation that Operations would take in respect of its own interests or the interests of the beneficiaries of the Nordburger Holdings Trust.
73 I have otherwise had regard to the additional depositions in Mr Martin's affidavit which, as I have noted, were repetitive of submissions already made on the discovery application.
74 In the submissions, the respondent (through her Counsel) opposed the discovery application on multiple bases. The vast majority of the submissions and evidence upon which she relied were directed to the protection of the interests of the Nordburger business, and particularly to prevent the misuse of Nordburger's asserted confidential information in the material. The basis of those submissions is, firstly, that the documents were not directly relevant on the pleadings as between her and the applicant. Secondly, it was submitted that even if the documents were directly relevant, she should not be required to produce them in full. Thirdly, she submitted that the application for access to the whole of the Xero database was tantamount to fishing. Fourthly, she alleged that the documents were commercially confidential because the applicant was the proponent and owner of a competitive business, such that he would have a competitive advantage and that, even if he were not presently conducting such a business, access to the document may give him a springboard advantage in any other competitive business that might be established. All of those submissions and evidence, it seems to me, were directed to the protection of the interests of the business conducted by the trust of which Operations is the trustee.
75 I bear in mind that the respondent is not joined in these proceedings in her capacity as a director of Operations as such, but I will have regard to the manner in which she has conducted the proceedings and the extent of the interests that she has sought to advance and protect in the proceedings when asking myself whether in fairness there should be an adjournment granted for the reasons advanced by Mr Martin.
76 I consider that the respondent as a director of Operations has intimate knowledge of these proceedings and that knowledge is to be attributed to the company. I consider that every step in the proceeding, every application, every submission made, every step taken by her are matters of which Operations has knowledge.
77 If that were not sufficient, as and from 7 December 2020, the respondent's husband Mr Martin has been a co-director. I have observed on a number of occasions (and it has been said in previous judgments of the Court) that Mr Martin has himself attended at hearings and has at times asserted an entitlement to be heard in his own personal capacity and on one occasion in his capacity as a beneficiary of the Nordburger Holdings Trust.
78 Operations is not to be regarded as in a position of a previous non-party who has been recently joined to proceedings in respect of which it previously has had no knowledge. In respect of the discovery application itself, when the proceedings were commenced in August 2020, they were accompanied by an interlocutory application seeking orders that were subsequently varied and now find expression in minutes of order of 17 September 2020. By that interlocutory application, the applicant sought documents specified in [2] that appear to me to be equivalent in scope to the documents now sought on the discovery application. The applicant has always asserted that the documents are discoverable under the order for standard discovery that was subsequently made. They include trading statements, management accounts, financial accounts, tax returns, bank statements and records of payments made out of the assets and funds of the Nordburger businesses to the respondent, her husband etcetera.
79 The parties were for some months intractable in their dispute in relation to that application. Judgment was previously reserved on it. Judgment was then re-opened on it. In December 2020, through her Senior Counsel, the respondent acknowledged that it was sensible that resolution of that application be deferred because of the parties' agreement that there would be an order for standard discovery given the possibility that the documents sought on the earlier interlocutory application might well be yielded by way of discovery processes in any event. Both Senior Counsel acknowledged and agreed that that was a sensible course. That is the background against which the application for standard discovery was then made.
80 The order for standard discovery was directed to the respondent personally. The respondent has not asserted that the documents that are contained in the Xero database are documents that are not within her possession, power, and control. That is a subject in respect of which the Court should be satisfied on the discovery application in any event.
81 I am therefore satisfied that if the documents are within the respondent's control, the access to those documents and the provision of them to the applicant may, depending on the merits of the argument, affect the interests of the business operated by Operations in its capacity as trustee. They are, after all, the financial documents in respect of the operation of the Nordburger business. That circumstance has been well known to the respondent throughout a period in which she has been the director of Operations. She has, in fact, made submissions and adduced evidence that, as I have said, reflect what has now been said by Mr Martin on behalf of Operations.
82 I have asked myself whether or not Operations should have an opportunity to seek legal advice as to whether or not to make an application for advice or other relief under the Trustee Act in the Supreme Court of South Australia and whether or not I should adjourn this application to facilitate that happening. In my view, an application for advice could have been made by Operations at any time since the commencement of these proceedings. Indeed, at the hearing of the interlocutory application made by the applicant at the outset, it was asserted on behalf of the respondent (through her then Senior Counsel) that the appropriate procedures for obtaining documents was under the Trustee Act.
83 If it was asserted by the respondent or considered by Operations that an order for discovery was inappropriate for this classification of documents, that invites the question why the respondent as a director of Operations later acknowledged that an order for standard discovery in relation to the documents could be made in this proceeding. It might be that her co-director takes a different view. But for the purposes of the proper case management of these proceedings I consider the knowledge of the respondent to be that of the company.
84 In other words, the making of an order granting leave for the joinder of the company to this proceeding was not, in my view, the critical event that gives rise to any entitlement in Operations to be heard in opposition to the discovery application. To the extent that Operations was a third party whose rights might be affected by an order against the respondent in these proceedings, it is a third party that has had intimate knowledge of the proceedings, and is an entity that at any time has had the right to apply to be heard to the extent that its interests were affected..
85 The test for standard discovery is to be applied by reference to those pleadings as between the applicant and the respondent. It matters not that Operations might take a different view as to the issues that are or are not joined on the pleadings between them
86 None of that is to say that the respondent should be regarded as having been a legal representative of the company and that the company was effectively a party throughout. But I must have regard to what is required in the interests of affording natural justice. What Operations has known at various times in the proceedings is a relevant question of fact. As I stated above, its knowledge is that of the respondent.
87 Mr Martin otherwise submitted that there is no urgency attending the discovery application.
88 As has been mentioned, the discovery application was made by way of an interlocutory application filed in March 2021 in light of the unfortunately torturous start to the proceedings. The previous hearing of the discovery application was delayed. There was then an application during the course of the 24th of June hearing to delay it again. The discovery application has been heard in the ordinary course and has been set down for judgment. In all of the circumstances, I consider that the application should now proceed to judgment.
89 The adjournment application made on Operations' behalf by Mr Martin is refused.
I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth.