Elfic Limited v Mack & Ors [1999] QSC 413 |

( $'( 1~" l{..15 State Reporting Bureau -TRANSCRIPT OF PROCEEDiNGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WILLIAMS J No 7360 of 1999 ELFIC LIMITED (ACN 007 606 206) and MACKS & ORS and GIO INSURANCE LIMITED (ACN 052 179 647) ,and COMMONWEALTH BANK OF AUSTRALlA LIMITED (ACN 123 123 124) BRISBANE .. DATE 28/10/99 REASONS 1 REVISED COPfES ISSUED State Reporting Bu~u Date /)/ // / Plaintiff First to 66th Defenda~ts 67th Defendant 68th Defendant II J'I"'II'. Till; 1.:11V Courts, Cl·"rg..: Sln:..:I, Brisl':IIIt:, Q, -llllll) T..:It: pIt "rll': (117) .12-l7 -l.l(.l1 F:I~: (07) J2~7 55,12 -- 1 of 9 -- 281099 SC (Williams J) HIS HONOUR: What I will say at this stage is that there were two applications principally before me today, the first in relation to the disclosur,~ of certain documents and, secondly, in relation to the giving of particulars. So far as the disclosure question is concerned, in my view, that should be resolved by directing that the first to 66th defendants make disclosure of the Solicitor and Client Agreement and the Agency Agreement which forms part of what has been referred to in the proceedings as the funding arrangement. That direction is made subject to the 10 20 qualification that the defendants are entitled to blank out c=) protected material and as I understand the position, that is acceptable to the plaintiff. If there is any further dispute, that can undoubtedly be readily resolved. Secondly, there will be a direction that the first to 66th defendants disclose to the plaintiff any references in the transcript of proceedings before Justice Mansfield of the Federal Court in South Australia on 19 and 20 February 1998 relating to the decision of Mr Justice Thomas of this Court in 2070 of 1994, together with any such references in opinions which were in the material placed before Justice Mansfield. 2 30 c=) 50 60 -- 2 of 9 -- 281099 jjh (Williams J) HIS HONOUR: The matter that I have left to deal with relates to an application fo:: further and better particulars. That is made b" the application which was filed on 19 October 1999 on behalf of the plaintiff, supported by an affidavit of Gareth John Jenkins filed on the same date. By way of background I should say that the principal proceeding seeks to set aside a funding arrangement which was approved under section 477 of the Corporations Law. The approval was given by Justice Mansfield of the Federal Court ( sitting in South Australia, and his decision is reported in (1998) 83 Federal Court Reports 583. The lengthy statement of claim which has been delivered by the applicant alleges that for various reasons the funding agreement was not entered into by the liquidator Macks in l,! good fai th and in the interests of the companies which formed the Emanuel Group or their creditors. \ Allegations are made in paragraphs 12, 13 and 14 of the statement of claim to the effect that the agreement was not entered into in good faith or otherwise for some improper purpose or because the liquidator was acting improperly. The first to sixty-sixth defendants, the companies of which Macks is the liquidator, have delivered a defence and responded to those allegations primarily in paragraph 7. Attention has been directed specifically to paragraphs 3 REASONS 10 20 30 40 50 60 -- 3 of 9 -- 281099 jjh (Williams J) 7(c)(i)(B), 7(c)(iii), 7(c)(lv), 7(c)(v)(F) and 7(c)(vi). In broad terms it is said that in each of those paragraphs an allegation involving either motive or intention is made. The argument then refers to rule 150(1)(k) of the Uniform Civil Procedure Rules which says 10 that "motive and intention or other condition of mind must be specifically pleaded". Paragraph 2 of that rule then goes on to say that Ilany fact from which any of the matters mentioned in the previous paragraph is claimed to be an inference must be specifically pleaded". It is important, in my view, to appreciate how the oallegations in question are made. As I have already indicated they are made by the defendants, in effect by the liquidator, in response to the allegations in the statement 30 of claim; they really amount no more than to a denial of the allegation which is contained in the statement of claim. The plaintiff has then joined issue with that denial by the 0 reply. In addition to the pleadings some further particulars have already been given and in addition to that there has been extensive disclosure. Given the disclosure as it now stands, and by that I mean after some rulings I made this morning, the applicant has access to all the documents which 50 constitute the funding arrangement, to all relevant information that was before Justice Mansfield at the time he made the order, including the fact that the liquidator then had a number of legal opinions with respect to the 60 4 REASONS -- 4 of 9 -- 281099 jjh (Williams J) proceedings the liquidator w;.shed to commence if the funding arrangement was approved, and also the detailed reasons of Justice Mansfield which, as I have already indicated, have been publicly reported. The matter is set down for hearing to commence before me in a little over three weeks I time on 22 November. Having regard to the various documents to which I have referred I have come to the conclusion that the defence raises with sufficient particularity all of the relevant issues. There is, in my view, sufficient particularity pleaded to identify all issues relevant for the hearing commencing on 22 November. 10 20 It is clear from the pleadings and the disclosed material 30 what matters were relevant to the decisions in question made by the liquidator. If the request for particulars were L) granted it seems to me that in most, if not all, instances, the response would be to supply evidence; in some instances that would involve lengthy statements which would confuse 40 rather than clarify the issues raised by the pleadings. I am of the view that the process of reasoning is not a matter for particulars. Essentially, it seems to me, that the application is, in reality, an endeavour to force the 50 defendants to plead in such a way that it could constitute a basis for an assertion that there had been a waiver of legal professional privilege attaching to advice received. Whilst that would not necessarily be a relevant consideration if 5 REASONS 60 -- 5 of 9 -- 281099 jjh (Williams J) the pleading was unintelligi:>le without particulars, in the present instance that is a r.!levant consideration which militates against compelling the defendant to reformulate its pleading. In the circumstances I am not disposed to order that the first to sixty-sixth defendants provide further and better particulars of the paragraphs of the defence to which I have referred above. The 67th defendant in the matter is GIO. There is outstanding an application that it provide further and better particulars of the allegation contained in 6(b)(ii)(B) of its defence. Further particulars have been provided as set out in a letter dated 19 October 1999. I have come to the conclusion that when the defence is 10 o20 o 30 read in the light of those further particulars that there is sufficient particularity already provided such as does not 0 call for an order at this stage. Finally the 68th defendant, the Commonwealth Bank, was asked to give further and better particulars. The pleading in question in its case mirrors an allegation made in the defence of the first to sixty-sixth defendants. The allegation is contained in paragraph 7(c)(v)(F) of its defence. There it alleges a perception as to the use which may be made of certain information if it was made known. The perception is clearly, when one reads the paragraph in question, that of the liquidator Macks. That appears to 6 REASONS 50 60 -- 6 of 9 -- ( ( I \ \ 281099 jjh (Williams J) have been recognised by the :iolicitors for the plaintiff because in the letter of 6 Ol!tober 1999, which is Exhibit GJJ10, it was acknowledged that if it was the perception of Macks that was involved the 68th defendant would not be in a position to give further particulars. As I say, that does seem to be the true position and in the circumstances sufficient particularity exists so that no further order is called for. In the circumstances I will not order the provision of any further and better particulars. Now, the orders, gentlemen, on the other summons, I'm disposed to reserve all questions of costs because it is all coming back before me. MR MORRISON: document one What's happened on my application, the HIS HONOUR: Yes. MR MORRISON: ----- I've given Mr Bond a copy of a draft order. Subject to some tinkering with words, which we think we can work out, that order is acceptable to him and we have agreed costs in the cause. HIS HONOUR: All right. MR MORRISON: So we will bring a note of it back to Your Honour, if that's convenient. HIS HONOUR: All right. Then the other one of yours, Mr Keane, what's ----- MR KEANE: Your Honour, we've circulated, I think, to the 67th and 68th defendants a draft order in relation to that. HIS HONOUR: Yes. MR KEANE: If everyone is satisfied with that 10 20 30 40 unfortunately we don't have multiple copies. We can hand a ~ copy of that to Your Honour. HIS HONOUR: All right. See, on the other summons, Mr Keane, you were successful to some extent, that was the part that I dealt with before ----- MR KEANE: Yes. HIS HONOUR: ----- lunch, and you have been 7 REASONS 60 -- 7 of 9 -- 281099 jjh (Williams J) unsuccessful ----- MR KEANE: Yes. HIS HONOUR: ----- on the other part, that's why I thought it probably best to reserve l~ostS. MR KEANE: We wouldn't seek to urge Your Honour any differently. MR ANDREWS: Your Honour, could I be heard on that? HIS HONOUR: Just one moment, Mr Andrews. Mr Stewart and Mr Andrews, you've seen this? MR STEWART: Yes. HIS HONOUR: All right. That:'s the application of 27 October 1999, there will be an order as per draft. I will note in my book that there's a draft to come in respect of the application of the first to sixty-sixth defendants of 22 October. Now, on the application of 19 October, I will simply say the orders will be as per the transcript, because there is the bit before lunch and this one. HIS HONOUR: On the application of 19 October 1999 costs will be reserved. MR MORRISON: Your Honour, I hope you are not sweeping me in that just at this moment because we want to make an application for the costs of the particulars application. 8 REASONS 10 o20 o 30 o 50 60 -- 8 of 9 -- ( ( 281099 jjh (Williams J) HIS HONOUR: I think I will ;;till reserve them, Mr Morrison. MR MORRISON: Very well. HIS HONOUR: I can see force in that. I can see a possible justification for perhaps even making costs of issues or something like that, but I do not want to get involved in that today. I would prefer to leave it until the end of the matter. Costs will be reserved. 9 REASONS 10 20 30 40 50 60 -- 9 of 9 --