Auspine Ltd v H S Lawrence & Sons Pty Ltd [1999] FCA 1749

FEDERAL COURT OF AUSTRALIA

Auspine Ltd v H S Lawrence & Sons Pty Ltd [1999] FCA 1749

PRACTICE AND PROCEDURE – particular discovery – circumstances when an order will be made – application to cross-examine on affidavit of discovery – whether affidavit is conclusive AUSPINE LIMITED v H S LAWRENCE & SONS PTY LTD & ANOR NO SG 28 OF 1997 O'LOUGHLIN J 21 DECEMBER 1999 ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY SG 28 OF 1997

BETWEEN: AUSPINE LIMITED

Applicant

AND: H S LAWRENCE & SONS PTY LTD

First Respondent

EMAIL LIMITED

Second Respondent

JUDGE: O'LOUGHLIN J

DATE OF ORDER: 21 DECEMBER 1999

WHERE MADE: ADELAIDE

THE COURT ORDERS THAT: 1. The respondents bring in short minutes of order in terms consistent with these reasons within twenty-eight days of this date. 2. There be liberty to speak to the minutes. 3. Each party pay its and their own costs of and incidental to the proceedings and the orders this day made. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY SG 28 OF 1997

BETWEEN: AUSPINE LIMITED

Applicant

AND: H S LAWRENCE & SONS PTY LTD

First Respondent

EMAIL LIMITED

Second Respondent

JUDGE: O'LOUGHLIN J

DATE: 21 DECEMBER 1999

PLACE: ADELAIDE

REASONS FOR JUDGMENT

The Nature of the Proceedings

1 In these proceedings the applicant, Auspine Limited ("Auspine") sues H S Lawrence & Son Pty Ltd ("Lawrence") and its parent company, Email Limited ("Email"); it claims damages, including exemplary damages, as a result of its purchase from Lawrence of the whole of the issued shares in the capital of three companies, Cowells Pty Ltd, Cowells Investments Ltd and Cowells Group Ltd (collectively referred to hereafter as "Cowells" or "the Cowells Group"). There are four issues that are presently before the Court. The first of them concerns the claimed inadequacy of Auspine's discovery; as to this, the respondents, Lawrence and Email seek orders for particular discovery of documents. The second relates to an application by the respondents for an order for production of documents. Thirdly, the respondents seek leave to cross-examine one of Auspine's senior officers on the contents of two of his affidavits that dealt with the subject of Auspine's discovery. Finally, Auspine has filed a notice of motion seeking summary judgment against both respondents because of their failure to comply with certain orders of the Court. 2 As at 29 June 1995, ("the Settlement date") and at all times beforehand that are material to these proceedings, the companies in the Cowells Group were wholly owned subsidiaries of Lawrence which was, in turn, a wholly owned subsidiary of Email. Early in 1995, the business of the Cowells Group was advertised for sale. It was a business that was orientated to the timber trade and general building products. Auspine, who at that stage carried on business as a timber processor and manufacturer, responded to the advertisement. 3 The case has an unusual twist in that Auspine is not alleging that the respondents, or either of them, induced Auspine to acquire the shares as a result of statements or representations that were materially false; on the contrary, as presently advised, Auspine accepts that, at the time when the respondents passed over information to Auspine, the information given and the statements made by or on behalf of the respondents were materially correct and truthful. 4 Auspine's complaint is to be found in subpars 84A.2 and following of its amended statement of claim. That subparagraph reads as follows: "In resolving to enter into the Share Sale Agreement Auspine relied on the Representations believing the Representations to be materially correct and truthful at the time of the Share Sale Agreement."