Ron Medich Properties Pty Ltd v Bentley-Smythe Pty Ltd

REASONS FOR JUDGMENT 1 This is a matter in which Mareva relief was granted by the then duty judge on 18 March 2009. That relief was granted up to, and including, 24 March 2009. On 24 March 2009 the proceedings were stood over to 26 March 2009 for hearing of a Notice of Motion filed by the defendant and consideration of the plaintiff's application for the continuation of the then existing interlocutory relief referred to in paragraph 8 of Orders made by me on 24 March 2009. On 26 March 2009 leave was granted to the plaintiffs to file an Amended Originating Process and an Amended Interlocutory Process. 2 Before proceeding to consider the plaintiff's application for relief in accordance with the Amended Interlocutory Process an Order was made, by consent, that the injunctive relief granted by me, and referred to in Order 8 of 24 March 2009, be dissolved. By that Order the slate was cleaned and the plaintiffs recommenced their claims for interlocutory relief in accordance with the Amended Interlocutory Process. 3 The application for interlocutory relief is part heard and will resume at 2:15pm today. The reason why the matter is presently before the court at 11 am is to consider a Notice to Produce served by the solicitors for the plaintiffs on the defendants. Relevantly the Notice to Produce required the production to the Court of documents as follows: '2.All bank statements, cheque books and cheque butts for the bank account BSB 484799 account no. 00208279 of the first defendant for the period 20 May 2008 to 30 June 2008. 3. All bank statements, cheque books and cheque butts for the bank accounts BSB 484799 account no 034207092 and BSB 484799 account no 002405415 of the second defendant for the period 1 October 2007 to 28 February 2009. 4. All bank statements, cheque books and cheque butts for all bank accounts of the third defendant for the period 1 October 2007 10 (sic) 28 February 2009. 5. 2008 Financial Statements for each of the first, second and third defendants.' 4 When the matter was called at 11:00am senior counsel for the defendants formally produced to the Court bundles marked 2, 3 and 4 containing documents said to fall within paragraphs 2, 3 and 4 of the Notice to Produce. An indication was given that there are no documents which answer the description of paragraph 5. 5 In the circumstances senior counsel for the plaintiffs has sought access to the documents produced in response to paragraph 2, 3 and 4 of the Notice to Produce. The inspection of those documents by the plaintiffs is objected to. The plaintiffs have offered an undertaking on behalf of senior and junior counsel for the plaintiffs to the effect that if access is provided to the plaintiffs to the documents, in the first instance they will be inspected by counsel alone, and on an undertaking not to disclose the contents, or to make copies of the documents or to provide copies of the documents for inspection by any other person without the leave of the Court. 6 As I have previously said in Telstra Corporation Ltd v Minister for Communications Information Technology and the Arts [2007] FCA 1398 at [47]: '47. Once documents have been produced to the court, any objections to their production having been rejected, the documents are in the control of the court. At this stage the person producing the documents may state that he objects to them being handed to a party seeking access to them for inspection. Documents should not go beyond the judge against the objection of the owner unless there is a valid reason to do so. Subject to matters such as confidentiality, it is for the judge, as part of the second step, to determine whether the documents appear relevant in the sense that they relate to the subject matter of the proceedings, in which event the judge will permit inspection by one or both parties at an appropriate time. The question of their admissibility without more, in accordance with the rules of evidence, does not then arise (per Moffitt P in Waind's case at 382-385 cf per Sackville J in Seven Network Limited v News Ltd (No 11) [2006] FCA 174 at [6]).' 7 My limited understanding of the case which the plaintiffs wish to make against the defendants is to the effect that the second defendant received payments from the first plaintiff totalling $6.03 million for which value of $3.8 million was obtained, leaving a surplus of $2.23 million unaccounted for. A further case is to the effect that a payment of $4.4 million was made by the first plaintiff to the first defendant $1 million of which was repaid on 17 June 2008, leaving a net amount of $3.4 million unaccounted for. 8 Senior counsel for the plaintiffs urges that one of the issues on the application for Mareva relief is for his clients to demonstrate that there is a serious issue to be tried. There is already evidence before the Court on the hearing of the Amended Interlocutory Process in relation to the application of the amount of $4.4 million received by the first defendant from the first plaintiff on 22 May 2008. The evidence suggests that the balance of $3.4 million was: '(ii) To acquire the interest of the First Defendant in the property at Perthville; (iii) To advance monies to borrowers from the First Defendant.' 9 It seems to me that there is sufficient apparent relevance in the documents, the production of which has been called for in paragraphs 2, 3 and 4 of the Notice to Produce to warrant access being granted in the first instance to the plaintiff's counsel. It is said that they bear upon the manner in which the payments to the first and second defendants to which reference has been made have been dealt with. In the case of the third defendant a claim is made in respect of a property, said to be registered in the third defendant's name, which is said to have been acquired with moneys which were made available by the first plaintiff, but without the authority of the first plaintiff. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.