Smartec Capital Pty Limited v Centro

Judgment 1HIS HONOUR : The first issue arising on the orders to be made to give effect to the reasons for judgment of Barrett J of 30 May 2011 ( Smartec Capital Pty Limited v Centro Properties Limited & Anor [2011] NSWSC 495) concerns the description of the documents of which inspection is to be allowed. 2I do not accept that an order should be made limiting inspection to the six items of correspondence identified by the defendants' solicitor as being the items that fall within his Honour's reasons. That statement is based on information and belief, and if the information to which the defendants' solicitor deposed proved to be wrong, it would appear to me that the plaintiff would be without any remedy. 3That having been said, for the reasons which emerged during the course of submissions, the description of the documents proposed by the plaintiff as the documents that should be made available for inspection was too wide. In particular, that description was not limited to communications between Centro and the ASX with respect to the US assets sale component of the transaction. Moreover, the reference in the plaintiff's proposed category of documents to documents referred to in communications other than those expressly excluded would have the potential to go well beyond the categories of documents evidently proposed by his Honour. 4In the course of submissions the description of the appropriate category of documents to which inspection should be allowed was substantially resolved, save in respect of whether the defendant should make available for inspection not only correspondence between CNP and ASX on the question of the applicability or application of the listing rules to the US assets sale transaction, but whether there should also be produced for inspection any record of oral communications between CNP and ASX on that topic. 5In para [43] of Barrett J's reasons, his Honour said that Smartec's submission that it has a genuine need of access to CNP's books for purposes related to the applicability of the listing rules boiled down to an assertion that it should be given such access so that it could investigate whether CNP had failed to give accurate and complete information to ASX for the purposes of ASX's decision-making. His Honour concluded that that was a proper purpose to pursue, that is, a purpose of seeking to be informed of the basis on which ASX reached its expressed conclusion about the listing rules (at [81]). 6That would suggest that documents which recorded the communications between CNP and ASX in relation to that subject matter should be made available for inspection. These would include, but not be limited to, correspondence or documents passing between those entities. 7Barrett J added (at [81]) that Smartec could properly pursue the purpose referred to in that paragraph and, to that end, could properly pursue the purpose of obtaining from CNP documents passing between CNP and ASX on that matter. 8In para [83] his Honour contemplated that " there should be an order that Smartec be authorised to inspect the 'books' of CNP consisting of correspondence between CNP (or its advisers) and ASX on the [specified topic]". 9The concluding part of para [81] and para [83] might suggest that his Honour had in mind a more limited class of documents than documents recording all communications on the relevant topic. 10In para [91] his Honour concluded that there would be a limited order in favour of Smartec " as outlined at paragraph [83] ". I do not think that the expression " as outlined " is synonymous with " as defined by ". I was told that whilst Smartec's originating process sought the inspection of documents which extended to records of oral communications, the more precise definition of documents of the kind that I am now dealing with was not the subject of express consideration during the hearing. 11This is the sort of question that is often debated when the Court is asked to make orders to give effect to the reasons for decision. I think, consistently with Wentworth v Rogers (No 3) (1986) 6 NSWLR 642, that I can make such orders as appear to me to be appropriate to give effect to his Honour's reasons so as to advance the purpose that his Honour identified as the proper purpose that Smartec was pursuing. In my view, Smartec should be allowed to inspect not only correspondence passing between CNP and ASX, but records of oral communications between those entities in relation to the particular subject matter described in para [83]. 12A further question was whether inspection of documents should be permitted to a Ms Marina Yu Lou, the director of the plaintiff. She was not a person who was named in the plaintiff's originating process as the person in respect of whom authority was sought, that she be allowed to inspect books of the defendants. However, it is common ground that inspection is to be allowed for the purpose of the plaintiff informing itself of the basis upon which ASX reached its express conclusion about the listing rules in relation to the US assets sale and for commencing and conducting proceedings, if appropriate, under s 793C of the Corporations Act 2001 (Cth). Those purposes could only properly be fulfilled if both directors of the plaintiff are given access. Accordingly, I will include Ms Marina Yu Lou as a person authorised to inspect the books. 13The third question was as to the proper use that could be made of the inspection. That ultimately boiled down to a question whether, if the documents are to be used for the purpose of conducting and commencing proceedings, such proceedings should be confined to proceedings under s 793C of the Corporations Act, or whether they should extend as well to possible proceedings under s 1101B of the Corporations Act , or any other proceeding which the plaintiff may be advised to commence in this or any other court. 14I understand that the only kind of proceeding expressly identified with any particularity in the plaintiff's evidence before Barrett J was potential proceedings under s 793C. I think there is substance to the submission for the defendants that a party who obtains access to documents under s 247A for what the Court finds is a proper purpose should be confined to that purpose in the use to be made of the documents, at least in the absence of further order. 15The orders proposed by both parties as to the permitted use of documents are expressed in their proposed short minutes to apply until further order. There appears to be sufficient overlap between s 793C and 1101B of the Corporations Act that no practical purpose would be served in excluding potential proceedings under s 1101B from the permitted use of documents. However, I accept the submission for the defendants that the wider leave sought by the plaintiff (that the documents might be used for any other proceeding which the plaintiff might be advised to commence) goes beyond the scope of what Barrett J may be taken to have accepted was a proper purpose of the plaintiff in seeking access to the defendants' books. 16For these reasons, I make the following orders: