FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v INFO4PC.com Pty Ltd [2003] FCA 290

PROCEDURE – discovery and interrogatories – relevance of authority of second respondent to respond on behalf of the first respondent – whether acquiescence of applicant in formulation of order for discovery in the alternative bars further orders

Corporations Act 2001 (Cth) s 201A

Federal Court Rules O 15 r 9(1)(c), O 15 r 16(1)(b), O 16 r 9(1)(b)

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v INFO4PC.COM PTY LTD and JAMES RAE

S17 of 2001

RD NICHOLSON J

2 APRIL 2003

PERTH

THE COURT ORDERS THAT:

1.       The first respondent provide answers to the applicant’s notice to answer interrogatories within 21 days of the making of this order, failing which default judgment be entered for the applicant against the first respondent pursuant to Order 16 rule 9(1)(b) of the Federal Court Rules.

2.       The first respondent provide discovery within 21 days of making of this order, failing which default judgment be entered for the applicant against the first respondent pursuant to Order 15 rule 16(1)(b).

3.       Within 14 days the second respondent produce for inspection by the applicant all documents in his possession, custody or power save any such documents in relation to which the second respondent maintains a claim for privilege which such documents shall be lodged with the Registrar of the Court in a sealed envelope on which is signified the claim for privilege.

4.       The first and second respondents pay the applicant’s costs of its notice of motion dated 17 August 2001.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 23 January 2001 the applicant brought an application seeking injunctive relief against the first respondent.  On 15 February 2001 the application was substituted by an amended application seeking declarations and orders in addition to injunctive relief against both the first and second respondents. 

2                     On 24 January 2001 von Doussa J made orders in the nature of interlocutory relief.  On 31 July 2002 I made declarations and orders in respect of contempts alleged against the respondents in respect of breach of the interlocutory orders.

3                     While the contempt motions were under hearing and consideration by the Court, general directions continued to be made in relation to the amended application.  On 15 August 2002 I published reasons relating to the applicant’s notice of motion dated 17 August 2001.  The motion sought orders that the first respondent provide answers to the applicant’s notice to answer interrogatories, failing which default judgment be entered pursuant to O 16 r 9(1)(b) of the Federal Court Rules.  It also sought orders that the first respondent provide discovery failing which default judgment be entered pursuant to O 15 r 16(1)(b).  The motion was stood over pending compliance with orders.  The first order required the applicant to file any evidence and submissions relevant to a determination of whether the second respondent was a director of the first respondent at the relevant date at which the second respondent provided an answer to interrogatories and purported to provide discovery on behalf of the first respondent.  The orders also gave to each of the respondents the opportunity to file any evidence or submissions in response.  The reasons set out the background to each of the issues in relation to interrogatories and discovery and I rely on that statement for these reasons.

Interrogatories

4                     The motion considered in the previous reasons was held over on this issue to give to the parties the opportunity to make submissions on the point whether or not the second respondent remained a director of the first respondent as at the date on which he filed the response purportedly on behalf of the first respondent, namely on 12 July 2001.

5                     For the applicant it is submitted that the findings made in connection with the contempt motion of 7 May 2001 that at the relevant dates (24 and 31 January 2001 and 8 and 15 February 2001) the second respondent was a director of the first respondent remained applicable to 12 July 2001 because the ratio of that finding had not changed.  That ratio was that the affidavit evidence of the second respondent stated he had been advised he could not be removed as a director due to a requirement of the Corporations Act 2001 (Cth) (“Corporations Law”) that a company must have at least one director who ordinarily resides in Australia.  That requirement presently appears in s 201A of Corporations Law.

6                     In his submissions the second respondent referred to the directions hearing on 25 June 2001, to his offer to attempt to answer the interrogatories on behalf of the first respondent to the best of his ability and file them accordingly and the absence of any objection on the part of the applicant to that course of action.  Reference to the transcript of that hearing shows that the second respondent indicated there were certain questions within the interrogatories to be answered by the first respondent with which he may be able to “to answer to help the situation.”  He emphasised that he would not be able to answer all the interrogatories but certainly could answer some of them.  He stated that “if that may help, then I have no problems in doing that…”  Counsel for the applicant neither objected nor concurred in such assistance, his submission being that at the time the question of whether the second respondent was authorised to speak for the first respondent was seriously in doubt.

7                     In his submission the second respondent stated that the question whether he was a director of the first respondent remained a contentious issue despite the finding in the reasons of 31 July 2002.  He filed an affidavit in support containing apparently fresh evidence on the point.  In the reply for the applicant it was accepted from the affidavit and accompanying submissions from the second respondent that he does not believe himself to be an office-holder of the first respondent at the time material to the present application and does not suggest that he authorized by any member of the company or anyone at all to answer interrogatories.  That attitude is consistent with the basis on which the second respondent offered to provide a partial response to the interrogatories.  It is also consistent with the absence of the filing by him of any affidavit verifying that he was a member or officer of the first respondent at the time he partially answered the interrogatories on 12 July 2001.

8                     However, I do not consider it is decisive of the present question whether at law he remained a director of the first respondent on 12 July 2001.  If he provided the response of that date as a director of the first respondent, it is patent from the terms of his offer at the hearing of 25 June 2001 that it could only be a partial response.  If he is properly to be found to have provided that response in his own right and not as a director, it cannot satisfy the obligation on the first respondent.  On either view the answers before the Court to the interrogatories directed to the first respondent are not sufficient for the purposes of the litigation.  The second respondent’s purported answer to interrogatories administered to the first respondent cannot stand as satisfying the obligations of the first respondent in that respect.

9                     Turning to the notice of motion, an order should be made in terms of par 1 but allowing to the first respondent 21 days within which to respond.  I decline to make an order in terms of par 2 striking out the second respondent’s partial response given that no objection was taken to his so acting at the hearing of 25 June 2001.  However its weight would fall to be determined both from the authority or lack of authority of its author and its patent partial character.

Discovery

10                  For the second respondent the submission is made that the order of 25 June 2001 was in terms that “the first respondent and/or the second respondent” provide discovery.  That referred back to orders of 11 May 2001 in which the order required “the respondents” to “provide discovery” as described in the applicant’s minute of 23 April 2001.  The minute was also expressed in terms of “the respondents” giving discovery of the documents described.  The second respondent submits that as the applicant accepted the alternative formulation of 25 June 2001 it should not be permitted by the Court to contend that the response from the second respondent does not satisfy the obligation for discovery.  It is to be noted that, for the reasons set out in the following paragraph, this cannot be accepted as a submission for the first respondent.

11                  At the same time as making that submission, the second respondent in his submissions relevant to discovery maintains his position that he was not a director of the first respondent at the relevant date for the purposes of discovery, namely 9 July 2001.  He has not filed and served any affidavit, in accordance with O 15 r 9(1)(c) of the Federal Court Rules, verifying that he was a member or officer of the first respondent at the time of making and answering the discovery.  It is clear he does not regard himself as a person entitled to now or then speak for the first respondent.  That is, irrespective of whether or not he was properly to be regarded as a director of first respondent at the relevant date or now, he does not seek to speak for the first respondent and claims no authority to do so.

12                  For the applicant it is submitted that the first respondent’s discovery would not be the same as the second respondent’s discovery as there are various classes of documents the former has had in its possession which have not been in the possession, custody or power of the latter.  These include but are not limited to:

“(a)     documents generated by other office holders of the First Respondent including Johnson Williamson and Timothy Rae;

(b)             documents relating to the negotiations for the financial package for the First Respondent;

(c)             details of the Spanish bank account;

(d)             documents relating to the sale or proposed sale of client information to third parties;

(e)             documents relating to the First Respondent’s business plan;

(f)              documents relating to financing agreements with banks or other finance providers; and

(g)             documents relating to the financial capacity of the First Respondent.”

The second respondent made submissions concerning each of these categories but these cannot, for the reasons state above, be accepted as submissions for the first respondent. 

13                  In these circumstances I accept the submission for the applicant that it is inappropriate to permit the second respondent’s discovery to stand as the discovery of the first respondent.  This is so despite the alternative formulation of the order of 25 June 2001.  The relevance of that formulation is that the first respondent should now be given adequate time to provide discovery before the sanctions of the order proposed in par 3 of the notice of motion take effect.  I regard 21 days as adequate.

14                  There remains an issue in relation to the discovery by the second respondent.  He maintains a claim for privilege over various documents but has not produced them to the Court.  That is despite the explanation given to him at the hearing on 25 June 2001 of the means by which he could do so with full protection of the claimed privileged status.  The order requiring him to do so should therefore be made.

Associate:

Dated:              2 April 2003