[2008] HCA 36
James G Oberg (Sales) Pty Ltd v Oberg [2012] FCA 722
(2012) 292 ALR 673
Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3
Source
Original judgment source is linked above.
Catchwords
[2008] HCA 36
James G Oberg (Sales) Pty Ltd v Oberg [2012] FCA 722(2012) 292 ALR 673
Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3
Judgment (8 paragraphs)
[1]
Solicitors:
Jeresyn Legal (Plaintiffs)
Somerset Ryckmans (First to Fourth defendants/ respondents)
Fifth respondent (no appearance)
File Number(s): 2020/135763
[2]
Judgment
Application is made by the plaintiffs by notice of motion dated 18 March 2022 for leave to use in proposed proceedings against four individuals and the Australian Securities and Investment Commission (ASIC) certain documents obtained by the plaintiffs in these proceedings in which the principal judgment was given on 8 March 2022: Loureiro v Mac Aus Unit Pty Ltd (No 2) [2022] NSWSC 226.
The application seeks relief from the "implied undertaking" not to use documents and the information contained therein obtained in the present proceedings on subpoena issued to third parties for a purpose other than the conduct of these proceedings: Harman v Secretary of State for Home Department (1983) 1 AC 280. The principle underlying the "implied undertaking" was stated by Hayne, Heydon and Crennan JJ in Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 at [96]:
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.
As explained in Hearne v Street, the "implied undertaking" is now better understood as a substantive legal obligation: at [3] (Gleeson CJ), at [106] (Hayne, Heydon and Crennan JJ). The rationale is to protect the "confidentiality of the documents which the course of justice require[d] to be disclosed in the litigation: Harman at 312-313 (Lord Scarman). The types of material disclosed to which this principle applies includes documents produced on subpoena: Hearne v Street at [96].
The motion listed the persons affected by the orders sought by the plaintiffs as: the defendants in these proceedings, Mac Aus Unit Pty Ltd (Mac Aus), Antonio, Patricia and David, and the first respondent to the motion, Sandra Conceicao (Sandra). The defendants indicated in written submissions that, without admissions, they did not oppose the relief sought; however, they sought an order that the plaintiffs pay their costs of and incidental to the motion.
The motion was not served on Sandra by the return date (23 March 2022). On the hearing of the motion the plaintiffs sought an order dispensing with service of the motion on Sandra on the ground that service would cause undue delay: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 18.2(2)(b). That application was refused and orders were made for the service of the motion and supporting affidavits on Sandra; the hearing of the motion was adjourned to 31 March 2022 and the defendants were excused from further attendance. On the adjourned hearing, Sandra did not appear or had not otherwise communicated to the plaintiffs' solicitors that she opposed the relief sought. Proof of service on Sandra was established by an affidavit of Wendy Hastie sworn 24 March 2022.
For the following reasons, I concluded that the plaintiffs should be granted the relief sought.
[3]
Background
The application arises in the following circumstances. Each of the plaintiffs has obtained a substantial money judgment against Antonio in these proceedings: Loureiro v Mac Aus Unit Pty Ltd (No 2).
The plaintiffs propose to commence fresh proceedings in the Equity Division against Antonio, Patricia, David, and Sandra, as well as ASIC, given the consequential relief sought includes orders for the correction of registers of Mac Aus maintained by ASIC.
In broad outline, the subject matter of the proposed proceedings is declaratory and other relief, including compensation, in respect of dealings by Antonio and Patricia, and by David with certain property. Specifically, the draft pleading alleges that:
1. the transfer of one ordinary share in Mac Aus by Antonio to David was affected with intent to defraud creditors and is voidable pursuant to s 37A of the Conveyancing Act 1919 (NSW) or, in the alternative, the share transfer was a sham and was ineffectual;
2. the transfer by Antonio and Patricia of the profit on the sale of a property at Temple Street, Stanmore to Sandra personally or as trustee of the "Antonio and Patricia Conceicao Maintenance Trust Fund" was affected with intent to defraud creditors and is voidable pursuant to s 37A of the Conveyancing Act or, in the alternative, the transaction was a sham and was ineffectual;
3. title to a property at Chester Street, Petersham is held by David on trust for the Conceicao Family Trust and its beneficiaries;
4. the transfer by David to the trustee of the Basset Trust of the profit on the sale of a second property at Chester Street, Petersham was effected in breach of trust and/or in breach of fiduciary duties or, in the alternative, that transaction was a sham and was ineffectual.
The plaintiffs wish to use certain documents (and the information contained therein) produced on subpoena by Baker & Co, the former accountants for the Conceicao family, and by various banks in the present proceedings for the purpose of the proposed proceedings.
The documents produced by Baker & Co comprise file notes, invoices for work carried out, draft documents, trust documents, and email correspondence between the former accountants themselves and/or members of the Conceicao family. The documents produced by various banks evidence transactions between the Conceicao family relevant to properties at Chester Street and Temple Street and include material relevant to the intended ownership of the subject properties.
To the extent that some of the subpoenaed documents have been tendered in evidence in the present proceedings as Ex E (CB 1356-1508), G, H, I, K and L, the "implied undertaking" does not preclude their use in the proposed proceedings: Hearne v Street at [96].
[4]
Relevant principles
The principles to be applied when a party seeks to be released from the implied undertaking are well-established. It is sufficient to refer to the following matters.
The implied undertaking is a substantive legal obligation concerning use of documents or information obtained under compulsion for the purposes of a proceeding in court and may be modified or relaxed by the Court: Hearne v Street at [96].
The party in the position here of the plaintiffs must show "special circumstances" in order to be released from the obligation. This does not mean that "some extraordinary factors must bear on the question before the discretion will be exercised": Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 at [31]. Rather, in Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217, Wilcox J said at 225 that for "special circumstances" to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. That is, good reason must be shown why, contrary to the usual position the constraint should not apply; and that reason must be found in all the circumstances of the case.
Wilcox J identified a number of considerations which may, depending upon the circumstances, be relevant to the exercise of the discretion:
the nature of the document;
the circumstances under which the document came into existence;
the attitude of the author of the document and any prejudice the author may sustain;
whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain;
the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information);
the circumstances in which the document came into the hands of the applicant; and
most importantly of all, the likely contribution of the document to achieving justice in the other proceeding.
If the Court does find "special circumstances", it then has "a broad discretion as to whether or not to grant leave": James G Oberg (Sales) Pty Ltd v Oberg [2012] FCA 722; (2012) 292 ALR 673 at [27] (Edmonds J).
[5]
Decision
Having considered the matters identified by Wilcox J in Springfield Nominees, which the Full Federal Court in Liberty Funding described at [32] as a "helpful guide", I am satisfied that there are compelling considerations in favour of leave being granted.
The nature of the documents has been referred to at [11] above. The documents produced by Baker & Co evidence instructions given by members of the Conceicao family to their accountants concerning the acquisition, holding, and dealing with proceeds of sale of the Livingstone Road, Chester Street and Temple Street properties, and advice given by those accountants concerning those matters. The documents include instructions given by members of the Conceicao family for the preparation by the former accountants of certain documents well after the date(s) of the impugned transactions. The documents produced by various banks evidence the financial transactions between the Conceicao family relevant to the properties at Chester Street and Temple Street.
Some of the documents have come into existence before the present proceedings were commenced whilst other documents, seemingly backdated, were brought into existence after this litigation commenced.
The former accountants do not object to the plaintiffs being released from the implied undertaking. The consent or non-objection of the producing party is relevant to the release of the party in receipt of the documents from the obligations owed (Stokes v Toyne [2021] NSWSC 1049 at [21] (Rein J)), however, I do not consider it determinative on the facts of the present case, given that Baker & Co are the former accountants of the Conceicao family.
Insofar as Baker & Co are the author of many of the documents, there is no assertion of any prejudice the author may sustain if the plaintiffs are released from the implied undertaking.
Although the nature of the information in the documents produced by the former accountants includes matters relating to Sandra containing potentially sensitive information as to her tax affairs insofar as she received monies from the sale of the Temple Street property, that is to be weighed against the likely contribution of the documents to achieve justice in the proposed proceedings which challenge the disposition of monies by Antonio and Patricia to Sandra from sale of the Temple Street property.
As to the information in the documents produced by the various banks, it was not suggested by the defendants or Sandra that it was commercially sensitive information.
I am satisfied that the documents and the information contained therein are most likely to contribute to achieving justice in the proposed proceedings for the following reasons.
First, the documents produced on subpoena by Baker & Co are plainly relevant to the serious questions the plaintiffs propose to raise about the legitimacy of the impugned transactions.
Second, in the absence of a release from the undertaking, the plaintiffs would need to subpoena the documents in new proceedings before they could be relied upon, including in support of foreshadowed applications for freezing and restraining orders against the existing defendants and Sandra. Delaying the plaintiffs from using the documents in the proposed proceedings may impede the plaintiffs attempts to prevent one or more of the defendants or Sandra from dissipating what are alleged to be assets of, among others, the Conceicao family trust or Antonio and Patricia.
Third, whilst the same material could and likely would be obtained on subpoena in the new proceedings, subject to excising from the draft statement of claim any information contained in the documents, that would put the plaintiffs to additional costs and time in the new proceedings and is inconsistent with the just, quick and cheap resolution in the proposed proceedings: Civil Procedure Act 2005 (NSW), s 56.
[6]
Costs
The defendants sought an order for their costs of and incidental to the motion. The plaintiffs say that there should be no order as to costs.
Although the defendants adopted a neutral position in that they did not consent nor oppose the application, and it was always going to be necessary for the plaintiffs to approach the Court in connection with the use of the subpoenaed documents, it was unnecessary for the defendants to incur the costs of appearing by counsel on 31 March 2022; the defendants could and should have communicated their neutral position on the application in a cost effective manner such as by email addressed to the plaintiffs' solicitors, rather than incur the cost of briefing counsel to appear on the hearing of the application.
The appropriate order is that there be no order as to costs of the motion.
[7]
Orders
Accordingly, the Court makes the following orders:
1. Grant leave to the plaintiffs to use the documents produced on subpoena by Baker & Co on 16 February 2022 (being subpoena packet S-18), and the information contained therein, to the extent that such documents have not been received into evidence in these proceedings, for the purpose of commencing and prosecuting proposed proceedings in the Equity Division against the second, third and fourth defendants and Sandra Conceicao.
2. Grant leave to the plaintiffs to use the documents produced on subpoena (being the subpoena packets specified below), and the information contained therein, for the purpose of commencing and prosecuting proposed proceedings in the Equity Division against the second, third and fourth defendants and Sandra Conceicao:
1. documents in S-3 produced by Westpac Banking Corporation;
2. documents in S-6 and S-7 produced by Commonwealth Bank of Australia (CBA);
3. documents in S-8 produced by National Australia Bank (NAB);
4. documents in S-10 produced by Australia and New Zealand Banking Group Ltd (ANZ);
5. documents in S-12 produced by NAB;
6. documents in S-13 produced by Westpac Banking Corporation;
7. documents in S-14 and S-15 produced by NAB;
8. documents in S-16 produced by Macquarie Bank;
9. documents in S-17 produced by CBA;
10. documents in S-19 produced by ANZ;
11. documents in S-20 produced by CBA.
1. Make no order as to costs of the motion.
[8]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 31 March 2022