Irawan v AWB Ltd [2001] VSC 374

Supreme Court of Victoria|2001-10-11|Before: McDonald J

Discovery from a prospective defendant; reasonable cause to believe that applicant for discovery has or may have the right to obtain relief in the court; nature of relief: derivative action for the accessory liability for director's breach of fiduciary duty; meaning of "company" under s. 236(3) of Corporations Act 2001; not to apply to a "foreign company" not registered under Corporations Act. Application for "Norwich Order" for discovery; application made in aid of proceedings commenced in a foreign court; jurisdiction of the court to make a "Norwich Order" to assist in proceedings in a foreign Court; order not granted. Corporations Act 2001 (C'th) s. 236(1)(b) and (3), s. 237(1). Rule 32.05

These proceedings were commenced by originating motion filed on 4 December 2000.

By the plaintiff's further amended originating motion and the amended summons on the originating motion the plaintiff seeks an order pursuant to Rule 32.05 of Chapter 1 of the Rules of the Supreme Court that the defendants make discovery to him of all documents that they have or have had in their possession concerning payment by the defendants (or their predecessors) of a volume rebate or similar payment due and owing and payable to Intermilling Commodities Pte Ltd in the period January 1997 to December 2000 but paid by the defendants (or their predecessors) to a person or corporation other than Intermilling Commodities Pty Ltd.

Further, by his further amended originating motion and amended summons the plaintiff in addition or alternative to the order sought pursuant to Rule 32.05, seeks an order in similar terms to that sought in reliance on Rule 32.05, but stated to be "in accordance with the principles enunciated in Norwich Pharmacol v Commissioners of Customers and Excise [1973] UKHL 6; [1974] AC 133". This form of order has become known as a "Norwich Order".

In respect of the relief sought by the plaintiff against the defendant by his further amended originating motion and amended summons the plaintiff sought pre-action discovery from prospective defendants.

The defendants opposed the relief sought in these proceedings against it. Affidavits have been sworn and filed in the proceedings on behalf of each of the parties to the proceeding. None of the deponents were cross-examined on the affidavits filed in the proceedings. The facts relevant to these proceedings are to be collectively gained by reference to the various affidavits filed in the proceedings. To this I first turn.

Intermilling Commodities Pte Ltd ("ICP"), which was formally known by the name Citra International Commodities Pte Ltd, is a company incorporated in Singapore pursuant to the laws of Singapore. ICP under its former name was incorporated in 1997. It was established to be a commodities trading entity principally to purchase wheat and wheat products for the milling requirements of a company, PT Panganmas International Persada ("PIP"). The plaintiff is a shareholder of ICP and holds 40% of the shares in that company. Until 11 August 2000 he was a director of that company, but on that date he was removed as a director in circumstances which he claims that his removal as a director was invalid. The current directors of ICP are Toh Teck Chye ("Toh") who is a 20% shareholder of the company, and Pierre Moccand ("Moccand"). The remaining 40% of the shares of ICP are held by Interflour Ltd, which was formally known as Intermilling Ltd and before that Intermilling Hong Kong Ltd which company is associated with the Zuellig family which is involved in wheat milling worldwide. Moccand is the nominee director of Interflour Ltd on the board of ICP. Toh was and is responsible for the day to day operations of ICP.

The plaintiff controls the majority of shares in PIP which is a company incorporated pursuant to the laws of Singapore. He is a director of that company. Since its incorporation in 1997, ICP arranged for the purchase of wheat from the Australian Wheat Board and thereafter its successor Australian Wheat Board Ltd (AWBL). Pursuant to the Wheat Marketing (Amendment) Act 1997 (C'th) AWBL assumed the business previously conducted by the Australian Wheat Board. Both defendants in these proceedings, although separate, have been treated collectively as one by both sides and I will collectively refer to them as AWBL where it is convenient to do so.

The method by which PIP has purchased wheat from the Australian Wheat Board and then AWBL has been as follows -

[diamond] PIP would inform ICP and the Indonesian Government National Logistic Agency ("BUROG") that it required wheat in certain specifications and certain quantities. All wheat purchasers for mills in Indonesia must be coordinated through BUROG which co-ordinates such purchases between Indonesian buyers and International Sellers.

[diamond] ICP would source the wheat at best price available and report the price to BUROG and if they should decide to proceed with the purchase it would coordinate the financing of the purchase and notify ICP to proceed with the transaction.

[diamond] BUROG would issue a purchase order directed to the Australian Wheat Board, and then AWBL, which would be signed by ICP and returned to BUROG which would issue various letters of credit. BUROG would be responsible for payment of the purchase price sourced by ICP.

[diamond] The wheat would be delivered in accordance with the purchase order.

In December 1999 the plaintiff met with Tim Dewan, the Regional Manager Marketing - South East Asia of AWBL, and in a conversation with him he became aware that AWBL had agreed to pay to ICP an annual volume rebate as a loyal customer. The plaintiff had no knowledge of this arrangement.

In a further meeting that the plaintiff had with Dewan on 29 March 2000 Dewan told the plaintiff that these rebates payments had been paid to several third party bank accounts at the direction of Toh, at least one of which was in Hong Kong. When the plaintiff asked Dewan for copies of the documents, telling him that he knew nothing about the matter, Dewan said that the agreements between AWBL and ICP, were in writing and that he should ask Toh to give him a copy.

In this conversation Dewan informed the plaintiff of the method of calculating the rebate which was provided for in the agreement including the percentage of purchases made in any given year.

In his affidavit sworn 27 November 2000 the plaintiff deposed that for the years ended 1998 and 1999 the corporate records of ICP do not reveal the payment of a corporate rebate in those years.

Dewan further informed the plaintiff in his meeting with him that all remittance instructions provided by Toh were given in writing. The plaintiff deposed in his affidavit sworn 27 November 2000 that he believes that AWBL retains those documents. He further deposed in that affidavit that the total volume rebate which AWB and AWBL had paid to third party accounts on ICP's instructions to the time of his affidavit was approximately US$950,000.

He further deposed in that affidavit that as a result of his discussions with Dewan he believed that AWBL was likely to have in its possession documents which would evidence the payment to a third party bank account in Hong Kong of monies paid in satisfaction of its obligation to ICP under the loyalty rebate agreement, which would reveal the volume of the payments made, the date on which they were paid and the bank account or accounts into which they were paid.

On 14 April 2000 Henry Uscinski a partner of Herbert Smith International, which acts as counsel for the plaintiff, wrote a letter to AWBL seeking to obtain copies of loyalty rebate agreements between ICP and AWBL and copies of banking transfer documents relating to payments under the agreements. In response to the letter AWBL wrote to Herbert Smith declining to provide information concerning transactions entered into between it and ICP, "for reasons of customer confidentiality" and suggested that the plaintiff as a shareholder of ICP should look to it for information.

On 1 June 2000 the plaintiff attended the offices of ICP and sought access to the records of ICP, but Toh refused to make the records and books available. Again on 30 June 2000 solicitors acting for the plaintiff sought access to the books and records of ICP but this was refused.

In or about mid-July 2000 Toh agreed to make the books and records of ICP available to a third party intermediary but at the appointed time the books and records were not made available.

On 22 March 2001 and on 9 April 2000 the plaintiff wrote letters to ICP requesting information in relation to the loyalty rebate arrangements and payments. He received no response to his letters.

On 10 May 2001 the plaintiff received a notice of the third annual general meeting of ICP. It was accompanied by a copy of the financial statements for ICP for year ended 31 December 2000. In Appendix 2 to the financial statements it was recorded that in 1999 ICP had received a commodity agency commission of $6,619 and in the year 2000 it had received a commodity rebate of $271,545. That appendix was stated to be "not part of the audited financial statements".

The plaintiff, on 29 May 2001, attended the ICP annual general meeting in Singapore. The only other people in attendance were the two directors of ICP - Toh and Moccand. During this meeting Toh told the plaintiff that there were no arrangements which "have" been entered into and/or "are" proposed to be entered into by ICP and Australian Wheat Board and/or AWBL and/or any other Australian wheat suppliers concerning loyalty rebates to ICP and/or any other person. Maccond confirmed this.

When the plaintiff asked about the items in appendix 2 to the financial schedules he was told by Toh that the purchases of ICP were below the minimum quarterly level to receive any rebate from the Australian Wheat Board or AWBL, but that as a gesture of goodwill the Intermilling Holdings Group of companies had agreed to give part of the rebate it had received in proportion to wheat purchased by ICP against the total wheat purchase by ICP and that group.

In support of the plaintiff's application the plaintiff relied on an affidavit sworn by Henry Uscinski, a partner of Herbert Smith, the international counsel acting for the plaintiff. That affidavit dealt with a conversation had by Uscinski in August 2000 with Charles Scott and Ms Alifia Sachak, the defendant's counsel. In an affidavit sworn by Scott on 22 August 2001 he identified himself as the "general manager international marketing of the defendants". In his affidavit Scott deposed that at the time of the conversation with Uscinski, Ms Sachak was a member of the first defendant's legal staff. He deposed that the conversation took place on 6 September 2000 not in August. He deposed that at the outset each side confirmed that the conversation would be "without prejudice".

Senior counsel acting for the defendants in these proceedings informed the court that privilege which attached to the conversation was waived. A further affidavit of Scott sworn 22 August 2001 was filed and relied on by the defendants.

In his affidavit Uscinski deposed that during his conversation with Scott he was informed that the documents sought by the plaintiff in this proceeding exist but that the defendants were reluctant to provide copies of them to the plaintiff because of the commercial relationship which the defendants have with the other shareholders of ICP and that the defendants did not want to provide the documents to the plaintiff as to do so would risk disturbing the commercial relationship with the Zuellig family. He deposed further that Scott and Sachak informed him that they preferred for the defendants to maintain a neutral position on any issue or dispute between the shareholders of ICP and that Ms Sachak suggested that the plaintiff should take proceedings for non party discovery.

In an affidavit sworn by Scott on 22 August 2001 he dealt with the conversation that he and Ms Sachak had with Uscinski on 6 September 2000, deposing that he had refreshed his memory from notes made by him contemporaneously with the conversation, which notes he exhibited to his affidavit. He deposed that in the conversation Uscinski said that there were documents in the possession of the defendants, which the plaintiff had seen which would assist him in proceedings against Toh in Singapore. He deposed that neither he or Ms Sachak confirmed or denied that the defendant had possession of any relevant document.

He further deposed that neither he or Ms Sachak said that if such documents existed the defendants would release them to the plaintiff if either ICP agreed or if the court ordered that they be discovered to the plaintiff.

Further, Scott deposed that any documents in possession of the defendants, relevant to the application, will contain matters which are highly confidential to the "commercial world"; that prices at which grain is sold to the defendants' customers are confidential between the defendants and the customer; that loyalty rebate agreements are entered into in order to adjust that price to take account of the volume of grain bought by a particular customer; that the fact that such rebate is given and the amount of any rebate is highly confidential and that the defendants were obliged not to disclose those details without the consent of the other contracting party.

Scott further deposed that the plaintiff competed in the market for purchases from the second defendant and other customers of the defendants and that to disclose "the amount of rebates is vital material which would [enable] him to obtain a competitive edge" either in dealings with the second defendant or when dealing with a competitor of the second defendant.

An affidavit sworn by Glenn Gibbons on 17 August 2001 was filed in opposition to the application made by the plaintiff. He was employed by the defendants between January 1999 and May 2001 as a customer accounts manager South East Asia which included the ICP accounts. During this time he regularly spoke to Toh the managing director of ICP and Mr Tom Goh, the general manager of ICP. His duties included the negotiation and settlement of sales contracts with ICP and the negotiation of loyalty rebate agreements. He described that the purpose of a loyalty rebate agreement was to enable a particular customer to "tailor" the price paid for grain, and that whereas card prices for various grades of wheat are published in the press daily and elsewhere, they do not include rebates, the amount of which depends on quantity of sales, long term trading and "other loyalty factors".

He deposed that usually in January after the immediate preceding calendar year the amount to be paid under the loyalty rebate agreements would be calculated, including that paid to ICP.

He deposed that the second defendant has made two payments of rebates for ICP purchases, the first on 22 April 1999 to an account in Hong Kong with the Shanghai Banking Corporation and the second on 14 January 2000 to an account with the same bank in Hong Kong. He deposed that from the defendants' records he was able to say that the first payment was made to an account of a company called Gismo Investments Limited on the direction of the plaintiff, who by letter, which was exhibited, informed that Gismo Investments was a company belonging to the shareholders of Citra International Commodities Pte Ltd. That letter bore the date 29 September 1977, but it was accepted that there was a typographical error in the year and it should read 1997.

As to the second payment, Gibbons deposed that Goh had provided him with banking details of an account into which the second payment of the rebate amount was to be paid, which was an account in the name of Intermilling Limited. To his affidavit he exhibited a document being the banking details of which he was informed, with the account number and tonnage shipped in 1999 blanked out and a payment request signed by Gibbons but again with the amount, tonnage, account number and further bank details blanked out. He deposed that with respect to the payment he was dealing with an authorised officer of ICP. In a letter to the first defendant dated 4 January 1999, signed by Toh on the letterhead of Intermilling Commodities Pte Ltd and exhibited to Gibbons' affidavit, the first defendant was advised that ICP was a joint venture company and that the majority shareholder was Intermilling (H.K.) Limited, a member of the Zuellig Group.

In a final affidavit sworn by the plaintiff on 7 September 2001 he deposed that after reading Gibbons' affidavit he obtained copies of Gismo bank accounts. He identified the payment into the account of US$479,119 on 23 April 1999, which was made by telegraphic transfer. He also identified the withdrawal of that amount on 7 May 1999. He deposed that he was not aware of deposit of that amount until reading the affidavit of Gibbons and was not aware of the withdrawal of these monies.

It is to be noted that the apparent letter of authority concerning the first payment was dated of 29 September 1997 but the deposit was made on 23 April 1999. Gibbons deposed that the first payment was made on the authority of the plaintiff by reference to documents being the defendants' records. Having regard to the disparity in dates I am not able to reach any conclusion at this point as to the authority given to the defendants to make the first payment. From the affidavits of Gibbons and also Scott, I am satisfied that there probably does exist documents in the possession of AWBL relating to and/or constituting a loyalty rebate agreement or agreements entered into between CPI and the defendants or one or other of them pursuant to or in reliance on such agreements. The documents constituting such agreement or agreements and relating to payments made pursuant to or in reliance of the same have not been made available to the plaintiff, it being contended by AWBL that they should not make them available voluntarily without the consent of the other contracting party and further that because of the sensitive commercial nature of such documents, if such documents were made available to the plaintiff it would be to his advantage in the world market of selling and buying grain both with respect to his dealings with AWBL and others and further by reason of the concern of AWBL, that to provide such documents to the plaintiff voluntarily may be to the commercial disadvantage of AWBL in its future dealings with other shareholders of ICP and to do so would risk disturbing the commercial relationship that AWBL has with the Zuellig family.

In Schmidt v Won[1] Ormiston JA, with whose judgment Batt JA agreed, at p. 445 said:

"The Rule [32.05], first introduced in 1986, should be construed benevolently because its intention was both to assist claimants without sufficient, precise information to launch an action and to prevent the bringing of speculative suits: Mercantile Mutual v Household Financial Services [unreported, Court of Appeal, 22 May 1997] at 8. Applications, however, must not be based upon `mere hunches' or some flimsy foundations as will not satisfy the requirement that `reasonable cause' should be shown for the necessary belief. That is not to say, however, that some form of `fishing' enquiry is not justified under the rule; indeed it is the very purpose of the rule to permit an enquiry of this kind, if the required conditions are made out. As to the proper application of the rules see Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500; (1990) 99 ALR 728, followed in Scarletti Pty Ltd v Millwood Printing Co Pty Ltd (unreported, Court of Appeal, 20 July 1994) at 4, 11-12. Beyond that one would not wish any further to fetter the application of the rule."

In Paxus Services v People Bank Pty Ltd[2] Burchett J considered Federal Court Rules O. 15A r. 6 which by its terms is in the same terms as that of r. 32.05 of this Court. At p. 733 he said:

"It would be unfortunate if a rule designed to amplify the Court's power to penetrate obscurities and uncertainties in the interests of justice were to be weakened by restrictive and unnecessary glosses. I think the rule is of a beneficial kind within the meaning of the well known principle of interpretation, and should be given the fullest scope its language will reasonably allow. The proper brake on any excesses in its use is the discretion of the Court, which is required to be exercised in the particular circumstances of each case."

During the course of the proceedings counsel for the plaintiff submitted that on the evidence before the Court there is reasonable cause to believe that the plaintiff has or may have a right to obtain relief in the Court in the nature of a derivative action brought by him as a member and shareholder of ICP against the defendants or one or other of them for accessory liability with respect to breaches of fiduciary duty by the directors of ICP, Toh and Moccand, in that monies due and payable by AWBL to ICP pursuant to a rebate agreement or agreements was paid not to ICP but to third parties thereby causing ICP to suffer loss. Senior counsel on behalf of the defendants submitted that s. 236(3) of the Corporations Act 2001 (C'th), which came into operation on 15 July 2001 had the effect of abolishing the right of a person at general law to bring proceedings on behalf of a company, of the nature identified on behalf of the plaintiff. He submitted further that as the provisions of ss. 236 and 237 of the Corporations Act provide that a person may bring proceedings on behalf of a company if the person is acting with leave granted by a court to bring such proceedings, such leave could not be applied for by the plaintiff or granted to him as leave may only be granted to bring such proceedings on behalf of a company which is a company registered under the Corporations Act which has no application to ICP as it was incorporated in Singapore. It is to be noted that ss. 236 and 237 of the Corporations Act were first introduced as part of the Corporate Law of Australia being part of Schedule 1 of the Corporate Law Economic Reform Program Act 1999 which Schedule became operative on 13 March 2000.

For a shareholder of a company to bring derivative proceedings for the benefit of the company it has been necessary for such person in the circumstances of the case to come within one of the exceptions that were developed to Foss v Harbottle[3]. To the extent that it is necessary in these proceedings, one such exception which may be applicable to the plaintiff is "where the interests of justice require that the minority shareholder be given standing to sue on behalf of a company" - Ford's Principles of Corporations Law [11.300] p.11231 and p. 11234-35 where authorities providing support for the existence of such exception are set out.

By s. 236(3) of the Corporations Act it is provided:

"(3) The right of a person at general law to bring, or intervene in, proceedings on behalf of a company is abolished."

"Company" is defined in s. 9 of the Corporations Act to mean, in its primary meaning "a company registered under this Act" and includes bodies referred to in sub-paragraphs (a)-(d) to that definition. On the evidence before the Court ICP was incorporated in Singapore. It is a "foreign company" within the definition of that expression in s. 9 of the Corporations Act. Section 601C.D.(1)(a) and (b) of the Corporations Act provides:

"(1) A foreign company must not carry on business within this jurisdiction unless: (a) it is registered under this Division; or (b) it has applied to be so registered and the application has not been dealt with."

Section 21 of the Corporations Act defines "Carrying on business in Australia or a State or Territory". Sub-section (3) provides for exclusions. By regard to such provisions it is to be seen that a foreign company may be a company to which s. 236(3) and s. 237 of the Corporations Act applies.

There is no evidence in these proceedings that ICP as a foreign company is registered under the Corporations Act. It was the very point made by senior counsel for the defendants that it was not. It is my view that on the evidence before the Court in these proceedings ICP being a company incorporated in Singapore and being a foreign company and there being no evidence that it is registered under the Corporations Act, the provisions of s. 236(3) of the Corporations Act, abolishing the right of a person at general law to bring proceedings on behalf of a "company" do not apply to the plaintiff insofar as he seeks to bring proceedings in this Court on behalf of ICP. Further in my view on the evidence before the Court in these proceedings there is no requirement on the plaintiff to obtain the grant of leave of the Court as required by s. 236(1)(b) of the Corporations Act before bringing proceedings of a derivative nature on behalf of ICP as on the evidence before the Court it appears that it is not a company to which that provision applies. To the extent that in any such derivative proceedings ICP may be a defendant to the action, there is nothing to prevent that. In normal circumstances a Corporation established by foreign law will be recognised as a juristic person in this Court by comity of nations: Lazard Brothers and Co v Midland Bank[4].

For these reasons I conclude that ss. 236(3) and 237(1) of the Corporations Act by their operation do not stand in the way of the plaintiff bringing proceedings in this Court in the nature of a derivative action on behalf of and for the benefit of ICP against the defendants or either of them based on a claim that they are liable as accessories for breaches by the directors of ICP, Lo and Maccond of the fiduciary duties owed by them to ICP in having paid or caused to be paid to accounts other than those of ICP monies owed by the defendants or either of them to ICP under rebate agreements.

On applications such as the present under r. 32.05 it is not necessary for the plaintiff to show precisely the cause of action that he or she may have against the prospective defendant from whom discovery is sought. It is only necessary for a plaintiff on such proceedings as the present to demonstrate facts from which it may reasonably be believed that the plaintiff "may have" one or more causes of action against the prospective defendant. Schmidt v Won Ormiston JA p. 456.

In the course of the hearing of this application counsel for the plaintiff initially submitted that there was, on the evidence before the Court, reasonable cause to believe that the plaintiff had or may have a right to obtain relief against the defendants or one or other of them pursuant to a number of causes of action. One was the right to which I have referred, being the right to obtain relief for accessory liability of the defendants or one or other of them in respect of the breaches of the fiduciary duty owed by Toh and Moccand to ICP. Another right of action was in negligence and again another was in conspiracy. However, counsel for the plaintiff put the latter two causes of action to one side and finally directed argument on behalf of the plaintiff, that on the evidence there was reasonable cause to believe that the plaintiff may have a right to obtain relief in the Court from the defendants or one or other of them for such accessory liability. To the extent that this was identified by counsel for the plaintiff reference should be made to Royal Brunei Airlines Stn Bht v Tan[5]. Lord Nichols who delivered the judgment of the Judicial Committee at p. 392 said:

"Drawing the threads together, their Lordships' overall conclusion is that dishonesty is a necessary ingredient of accessory liability. It is also a sufficient ingredient. A liability in equity to make good resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation. It is not necessary that, in addition, the trustee or fiduciary was acting dishonestly, although this will usually be so where the third party who is assisting him is acting dishonestly. `Knowingly' it is better avoided as a defining ingredient of the principle, and in the context of this principle the Baden[6] scale of knowledge is best forgotten."

On the evidence before the Court on this application it would appear that the defendants or one or other of them made two payments to accounts other than those of ICP which were made with respect to that described as a loyalty rebate agreement or agreements. Those payments were made on 23 April 1999 and 14 January 2000. As I have previously said, on the documents exhibited to the affidavit of Gibbons sworn on 17 August 2001 and in particular the letter of the plaintiff to the Australian Wheat Board dated 29 September [1977] but accepted to be 29 September 1997, I have difficulty at this point in associating that letter with the payment made on 23 April 1999. The documentary evidence referred to by Gibbons and exhibited to his affidavit relating to that payment does not disclose the account to which the payment may have been made. After reading the affidavit of Gibbons sworn 17 August 2001 the plaintiff made enquiries relating to the payment on 23 April 1999 and was able to trace the same and also ascertain that the sum deposited on 23 April 1999, US$4,709,119 was withdrawn on 7 May 1999. The plaintiff has deposed that at the relevant time Toh was a signatory of the account into which the monies were paid on 23 April 1999. He has deposed that he was not aware of the April payment or the withdrawal of those monies from that account until reading Gibbons' affidavit.

As to the second payment, although Gibbons by his affidavit sworn 17 August 2001 identifies the date of the same, 11 January 2000, that described by Gibbons as "confidential figures" have been blanked out on the documents relating to such payment including the identity of the bank account and the account number.

From the evidence on this application it would appear that there were loyalty rebate agreements in existence between ICP and AWBL during the period of time the subject of the plaintiff's application under r. 32.05. It further appears that payments have been made by the defendants or one or other of them pursuant to such agreements and that the payments made have been made to accounts other than accounts of ICP. On the evidence before the Court I have reached the conclusion that there is reasonable cause to believe that the plaintiff may have the right to obtain relief by way of a derivative action against the defendants or one or other of them for accessory liability with respect to loyalty rebate payments made to a person or persons other than ICP during the period relevant to the amended originating motion and summons. I have further reached the conclusion that having regard to the enquiries made by the plaintiff and responses to such enquiries and not made to the same, the plaintiff does not have sufficient information to enable him to decide whether to commence a proceeding in this Court to obtain such relief. I have further concluded that there is reasonable cause to believe that the defendants or one or other of them has or is likely to have or has had or is likely to have had in their respective possessions documents relating to the question whether the plaintiff has a right to obtain relief of the nature referred to and that inspection of such documents would assist the plaintiff to make the decision whether to commence a proceeding in this Court to obtain such relief.

As to the "Norwich Order" sought by the plaintiff, counsel for the plaintiff informed the Court that such order was sought to enable or to assist the plaintiff bring proceedings in Singapore against directors of ICP for breach by them of the fiduciary duty owed by them to ICP.

With respect to the relief sought pursuant to r.32.05 it was submitted by senior counsel on behalf of the defendants that it should be concluded in these proceedings that the plaintiff by his application under that Rule wishes to arm himself with documents for the purpose of proceedings in Singapore and not for the purpose of any proceeding to be brought in this Court and that consequentially no order should be made under r.32.05 granting discovery to the plaintiff. Rule 32.05 is limited to enabling an order being made to provide discovery where there is reasonable cause to believe that the applicant has or may have the right to obtain relief in this Court.

In his affidavit sworn 22 August 2001 Scott deposed as to the highly confidential nature of the documents which the plaintiff sought to have discovered and the competitive edge or advantage that the plaintiff would have in either dealing with the second defendant or against it in purchasing grain if discovery was given to the plaintiff.

At the commencement of the afternoon of the second day of the hearing of this proceeding counsel for the plaintiff informed the Court that he had been instructed that proceedings had been commenced in the High Court of Singapore by originating summons on 19 June 2001, which was returnable on 9 July 2001; that such proceedings were against Toh and Moccand and in such proceedings the plaintiff sought leave to commence a derivative proceeding pursuant to s. 216A of the Companies Act of Singapore. Counsel further said that an affidavit had been sworn by the present plaintiff on 18 June 2001 in support of that application, and that affidavits had been sworn by one Tan on 6 July 2001, by Toh on 8 August 2001 and by Moccand on 4 August 2001 in opposition to the application. The Court was further informed by counsel for the plaintiff that he had been instructed that on 13 September 2001 an order had been made directing that written submissions be provided to the Court within three weeks. The Court was further informed that to one of the affidavits of the defendants to those proceedings there was exhibited a letter of the solicitors of AWBL pointing to inquiries relating to matters relevant to the proceeding. The Court was further informed that in those proceedings the present plaintiff had filed a further affidavit sworn on 31 August 2001. To this proceeding I shall return when considering the application for a "Norwich Order". I have referred to this matter at this point having regard to the submission of senior counsel for the defendants that in reality that which the plaintiff was seeking in the proceedings brought pursuant to r.32.05 was to obtain documents for the purpose of proceedings in Singapore.

I have concluded that an order should be made pursuant to r.32.05 requiring the defendants to give discovery to the plaintiff of documents which the defendants have or have had in their possession relating to payments made by them or either of them pursuant to any loyalty rebate agreement entered into between ICP and the defendants or either of them or any predecessor of them during the period from January 1997 to December 2000 which payments were made to a person or corporation other than ICP. I have also reached the conclusion that having regard to the proceedings, which the Court has been informed, have been commenced now in Singapore, that to ensure that any document discovered by the defendants may be used only to enable the plaintiff to decide whether to commence a proceeding in this Court and further having regard to that deposed by Scott to be the high degree of commercial confidentiality of any loyalty rebate agreement entered into between the defendants or either of them or any predecessor of them with ICP, that at first instance the affidavit of discovery when served on the solicitors for the plaintiff should not be made available to the plaintiff. I have further reached the conclusion that inspection of documents discovered at first instance should be made by counsel and the solicitors for the plaintiff, and that unless agreed in writing between the parties or by further order of the Court, any such document should not be made available to the plaintiff nor should a copy of any such document be made available to the plaintiff. Further I have concluded that in the event of counsel or the solicitors for the plaintiff making a copy of any document so discovered pursuant to the order, that I propose to make, that the solicitors for the plaintiff provide to the solicitors for AWBL a list in writing signed by the solicitors for the plaintiff identifying each document a copy of which has been so made. Having so determined this matter, I propose to give counsel for the plaintiff and for the defendants an opportunity to prepare minutes of orders to be made by me in accordance with the decision that I have reached in this matter.

I now turn to the further or alternative order that the plaintiff has sought in these proceedings being in the nature of a "Norwich Order". In Norwich Pharmacol v Commissioners of Customs and Excise[7] the appellants were owners and licensees of a patent covering a chemical compound. From information published by the respondents it was to be seen that some 30 consignments of the compound had been imported into the United Kingdom between 1960 and 1970. None of those importations had been licensed by the appellant and accordingly each consignment had involved a tortious infringement of the appellant's patent. Although the appellant had tried to discover the identity of the importers, in order to bring legal proceedings against such importers, the appellant was unable to discover such identity. In the course of the importation of such consignments the respondents in the exercise of their statutory duty had obtained information relating to the goods including the names of the importers. The appellants requested the respondents to supply them with the names of the importers of the consignments of the compound, but the respondents declined stating they had no authority to do so. The appellants then brought an action against the respondents claiming, inter alia, an order for discovery of the names of the importers. The primary Judge granted an order for discovery but his decision was reversed by the Court of Appeal. The House of Lords allowed the appeal remitting the cause to the Chancery Division with a direction that it be ordered that the respondents set forth and disclose to the appellants the name and address of any person, appearing from the customs Entry in respect of such importation, to be an importer. The discovery that was sought by the appellant in those proceedings was sought in aid of proceedings which the appellants wished to bring against those involved in a tortious infringement of its patent with respect to the compound but which proceedings the appellants were unable to commence without knowing the names of the importers. It was held by the Court that while recognising and accepting that as a general rule no independent action for discovery would lie against a person against whom no reasonable cause of action could be alleged or who was in the position of a mere witness in the strict sense, that that general rule would not apply where the party against whom the action for discovery was brought had, through no fault of his own, become involved in the wrongful act of another so as to facilitate that wrongdoing and where, without discovery of the information in the possession of the person so involved in the wrongdoing, no action could be brought against the wrongdoer.

In Breen v Williams[8] the appellant had undergone a bilateral augmentation mammaplasty in 1977 during which silicon implants were inserted in her breasts. In 1978 she consulted a plastic surgeon about complications which had occurred following the initial surgery. Remedial surgery was performed, but the complications continued. She became involved with many others in proceedings against the manufacturers of the breast plants before a court in the United States. By orders made by that court in September 1994 Australian litigants were excluded from a proposed settlement, but the Court gave to such litigants an option to "opt in". However, it was a term of the "opting" procedure that each claimant file with the Court copies of medical records in support of any claim they wish to propound. In proceedings brought in the Supreme Court of New South Wales in its Equity Division the appellant sought access to the records kept by the plastic surgeon in her case. The primary judge refused the appellant the relief she sought. Her appeal was dismissed by the Court of Appeal. However, Kirby, P., in a dissenting judgment would have granted relief to the appellant by way of a declaration that the appellant had a right upon request to be given reasonable access by the respondent to examine copy and/or at reasonable cost to obtain copies of records or information concerning her and created or obtained by the respondent during the course of providing medical treatment and advice to her.

On appeal to the High Court, the appellant expressly disavowed any reliance upon the law as to discovery in aid of a foreign proceeding as a foundation for the relief she sought.

The appellant failed before the High Court, it being held that in the absence of a formal contract between a doctor and patient there was no implied term in the contractual relationship which entitled the appellant to inspect and obtain her medical records.

In his judgment at p. 119 Gummow, J. posed the question whether the Supreme Court of New South Wales, in its inherent jurisdiction as a Court of Equity, would have had the authority to make an order of the nature which Kirby, P. said he would have given, if its jurisdiction in that regard had been invoked by the appellant. In dealing with bills of discovery under the "old procedure" Gummow, J. at p. 119 referred to that written by Story[9] as to such discovery:

"[I]t constitutes no objection to a bill of discovery that it is to assist proceedings in a court which sits in a foreign country, if in amity with that place where the bill is filed; for it is but a just exercise of that comity which the mutual necessities and mutual conveniences of all nations described in their intercourse with each other."

Gummow, J. noted at p. 120 of his judgment the developments in England which "have revived and perhaps extended that which was the previous jurisdiction to entertain bills of discovery", citing Norwich Pharmacol and British Steel Corporation v Granada Television Ltd[10] and Mercantile Group (Europe) AG v Aiyela[11].

By way of obiter dictum at p.120-1 Gummow, J. said:

"Accordingly, it may be accepted that it would have been within the inherent jurisdiction of the Supreme Court, as a court of equity, to make an order for particular discovery, in terms resembling the relief which Kirby P. would have granted. It would have been no sufficient objection to the existence of such jurisdiction that the relief was sought to assist the appellant in complying with 'opt in' procedures laid down by the United States District Court, or that the relief was sought not against a party to the United States litigation, but against a stranger to it. So much appeared to be common ground in this court. One consideration which would arise when deciding to grant such relief would be the availability of an alternate compulsory court process. One such possibility would have been the issue of Letters Rogatory by the United States District Court."

In Computershare Ltd v Perpetual Registrars Ltd[12] Warren, J. at 633 said:

"[A] Norwich order is not limited only to finding the identity of a tortfeasor. It can be used for the purpose of tracing the disposition of moneys obtained fraudulently and for other purposes."

In the present proceedings the Court has been informed by counsel for the plaintiff that the "Norwich Order" sought against the defendants is sought to obtain discovery of documents relating to the payment of loyalty or volume rebates paid by the defendants or one or other of them or their predecessors which were paid pursuant to an agreement with ICP but not paid to it but paid to third parties and that this is sought to assist the plaintiff in proceedings in Singapore against the two directors of ICP for breach of the fiduciary duty owed by them to ICP. It was late in these proceedings that some further information was given to the Court relevant to proceedings that had been commenced by the plaintiff. It was said that the proceedings before the High Court in Singapore were brought pursuant to s.216A of the Companies Act of Singapore.

In an affidavit sworn by Michael Lipp on 31 July 2001 he deposed that he was a senior counsel and an advocate and solicitor of the Supreme Court of Singapore of 31 years standing at the Bar. That affidavit was filed on behalf of the plaintiff to provide expert evidence to the Court as to the laws of Singapore including the common law of Singapore relevant to the present proceedings. In paragraphs 10, 11 and 12 of his affidavit Lipp deposed:

"10. Under the common law of Singapore, a concerned shareholder may bring a derivative action against the directors of the company for breach of the various duties referred to above, so long as the shareholders fit within one of the exceptions to the 'proper plaintiff' rule. 11. The 'proper plaintiff' rule which was laid down in the English case of Foss v Harbottle [1843] EngR 478; (1843) 2 Hare 461 has been followed in the Singapore courts (see, for example, Heng Mui Pheow v Tan Ting Koon & Ors. [1990] 3 MLJ 358), and states that a member cannot sue on the company's behalf where it is the company's rights which are sought to be enforced. As a company is a separate entity from its members, the proper plaintiff in a suit for the enforcement of a corporate right is the company itself. 12. Where a shareholder falls within one of the exceptions to the 'proper plaintiff' rule, he may bring an action himself against the wrongdoer."

Further in paragraphs 17, 18, 19 and 20 under the heading "Statutory Derivative Action" Lipp has deposed:

"17. Section 216A of the Companies Act sets out a procedure whereby a concerned shareholder may commence a derivative action. While s.216 of the Companies Act allow a court to 'authorise civil proceedings to be brought in the name of or on behalf of the company by such person or persons and on such terms as the Court may direct', the appropriate section to bring any statutory relief would be s.216A. 18. Section 216A(2) provides: 'Subject to sub-section (3) a complainant may apply to the Court for leave to bring an action in the name and on behalf of the company or intervene in an action to which the company is a party for the purpose of prosecuting, defending or discontinuing the action on behalf of the company.' 19. Leave of the Singapore courts is required for the commencement of a derivative action. The Court will only grant leave if Mr. Irawan can demonstrate that the proposed derivative action is bona fide. He must show that there is an arguable case against Mr. Toh for an account of the payments that Mr. Dewan confirmed had been paid to third party accounts. Such rebate payments are assets of ICP and their dissipation would constitute a loss to ICP. 20. In addition, Mr. Irawan must also demonstrate to the Court that the proposed derivative action is genuine in the interests of ICP."

It is by reference to the affidavit sworn by Lipp and documents exhibited to the same, including a copy of that part of the Companies Act of Singapore containing ss. 126 and 126A, that the Court is aware of the nature of the proceeding that the plaintiff has commenced in the High Court of Singapore according to that which the Court has been told. However, the Court has not been provided with any further information relating to those proceedings other than that set out aforesaid.

Section 29 of the Supreme Court Act provides:

"29(1) Subject to the provisions of this or any other Act, every court exercising jurisdiction in Victoria in any civil proceeding must continue to administer law and equity on the basis that, if there is a conflict or variance between the rules of equity and the rules of the common law concerning the matter the rules of equity prevail. (2) Every court referred to in sub-section (1) must give the same effect as before the commencement of this Act - (a) to all equitable estates, titles, rights, reliefs, defences and counterclaims, and to all equitable duties and liabilities; and (b) subject thereto to all legal claims and demands and all estates, titles, rights, duties, obligations and liabilities existing by the common law or created by any Act - and, subject to the provisions of this or any other Act, must so exercise its jurisdiction in every proceeding before it as to secure that, as far as possible, all matters in dispute between the parties are completely and finally determined, and all multiplicity of proceedings concerning any of those matters is avoided."

In Computershare Ltd v Perpetual Registrars Ltd[13] no question was raised as to the jurisdiction of the Court to grant a "Norwich Order" if in the circumstances an order in such form should be granted. Section 29(2)(a) of the Supreme Court Act preserves to the Court jurisdiction to grant equitable relief to the same effect as before the commencement of that Act. If the obiter dictum of Gummow J in Breen v Williams was to the applied and followed, this Court would have jurisdiction to make a "Norwich Order" to assist a party in proceedings before a foreign Court. However, in the circumstances of this case I am not prepared to grant the "Norwich order" sought by the plaintiff in these proceedings. I am not prepared to do so as that which the Court knows about such proceedings is limited to that stated by counsel. I do not suggest that counsel was at an earlier stage in the proceedings aware of that which he informed the Court and to which I have referred. I have not been provided with either the originating process in those proceedings nor have I been provided with a copy of any affidavit filed in those proceedings. Further I have not been provided with any information as to what processes may be available to the plaintiff in the proceedings in the High Court of Singapore to obtain the documents now sought by the plaintiff in the second and/or alternate arm of the present proceeding before this Court. It is in such circumstances that I am not prepared to make a "Norwich Order" of the nature sought in these proceedings. It follows that the orders that I am prepared to make in these proceedings is limited to the application of the plaintiff made pursuant to r. 32.05.

[6] Baden v Société Générale Pour Favoriser le Développment du Commerce et de lé Industrie en France SA [1993] 1 WLR 509.

[9] Commentaries on Equity Jurisprudence as Administered in England and America, 8th ed. (1861), vol. 2 para. 1495

Wheat Marketing (Amendment) Act 1997

Law Economic Reform Program Act 1999

At a glance

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Judgment (95 paragraphs)

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