Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd [1995] FCA 1082

NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No NG 381 of 1994 GENERAL DIVISION ) BETWEEN: ALLSTATE LIFE INSURANCE CO and the parties listed as applicants in Annexure A to the third further amended statement of claim. Applicants AND: AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED and the parties listed as respondents in Annexure B to the third further amended statement of claim. Respondents CORAM: Lindgren J PLACE: Sydney DATE: 19 December 1995

REASONS FOR JUDGMENT (No 21) (Application by Freehills for leave to administer interrogatories) The 54th respondent ("Freehills") seeks leave to file in Court a notice of motion and to have it made returnable instanter. By the notice of motion Freehills would seek leave to serve a notice to answer interrogatories, in the form of the form of the notice annexed to the notice of motion, upon the 1st, 2nd, 3rd, 7th, 8th, 9th and 16th applicants. For convenience, I will refer to them in these Reasons as "the applicants" although they are only seven of the seventeen applicants. The application for leave to file in Court the notice of motion on the basis that it is made returnable instanter is opposed. I have taken into account the submissions and grant leave to Freehills to file the notice of motion in Court and I make it returnable instanter. The case is fixed for hearing on 18 March 1996 and it is desirable that the question be resolved prior to the Law Vacation. The way in which the issue between the parties to the motion arises is this; the applicants have furnished witness statements by individuals who took the decision on behalf of the respective applicants, to acquire the senior subordinated debentures issued by Linter Textiles Corporation Limited ("Linter Textiles"), the subject of the proceedings. Clearly, the individuals concerned will be giving evidence relating to the issues of reliance and inducement. More particularly, their evidence will be relevant to the question whether the investor applicants which they represent relied upon certain alleged representations to be found in the prospectus issued by Linter Textiles in relation to the debentures, and were induced as a result of that reliance to subscribe for the debentures. The interrogatories sought to be administered do not relate to the debentures issued by Linter Textiles itself but to securities issued by other corporations. Those securities are "high risk" securities. So were the senior subordinated debentures issued by Linter Textiles. No doubt it will be put that the applicants were not particularly concerned with the contents of the prospectus issued in relation to the Linter Textiles debentures and it will be suggested that support for this view is to be found in the fact (if it be established) that the applicants were engaged in a practice of investing in high risk securities without much care as to the content of prospectuses. The first interrogatory proposed is the question whether the individual who has provided the witness statement performed any act or acts in relation to the acquisition by the investor applicant in question, of the securities in the companies identified in an annexure to the proposed notice to answer interrogatories. The second interrogatory proposed requires the investor applicant in question, if the answer to the first question is "yes", to identify the securities in question and then to identify the act or acts performed by the individual in relation to each of them. To take the case of the first applicant as an illustration, the proposed interrogatory is as follows: "1. Did Mark D Senkpiel ('Senkpiel') perform any act or acts in relation to the acquisition by the First Applicant of any security of the companies identified in Annexure 'A'? 2. If yes to interrogatory 1: