FEDERAL COURT OF AUSTRALIA Lifeplan Australia Friendly Society Ltd v Woff [2014] FCA 559 Citation: Lifeplan Australia Friendly Society Ltd v Woff [2014] FCA 559 Parties: LIFEPLAN AUSTRALIA FRIENDLY SOCIETY LTD ACN 087 649 492 and FUNERAL PLAN MANAGEMENT PTY LTD ACN 003 769 640 v NOEL WOFF, RICHARD CORBY, FUNERAL PLANNING AUSTRALIA PTY LTD ACN 050 727 015 and ANCIENT ORDER OF FORESTERS IN VICTORIA FRIENDLY SOCIETY LIMITED File number: SAD 99 of 2012 Judge: BESANKO J Date of judgment: 30 May 2014 Catchwords: PRACTICE AND PROCEDURE – application for leave to amend Statement of Claim – application for standard discovery and particular discovery – differences between r 20.21 of the Federal Court Rules 2011 (Cth) and O 15, r 8 of the Federal Court Rules 1979 (Cth) – whether orders for discovery should be made against company in liquidation – whether orders for particular discovery should be made – where previous order for discovery said not to have been complied with – where documents said to be required to prepare expert evidence as to account of profits. Held: Application for leave to amend Statement of Claim granted and orders for standard discovery against company in liquidation and particular discovery against other respondents to be made. Legislation: Federal Court Rules 1979 (Cth) O 15, r 8 Federal Court Rules 2011 (Cth) rr 20.11, 20.14, 20.21 Life Assurance Act 1995 (Cth) Dates of hearing: 4, 12 March 2014 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 61 Counsel for the Applicants: Mr P Collinson SC with Mr M Douglas Solicitor for the Applicants: Ashurst Australia Counsel for the First and Second Respondents: Mr K Esser Solicitor for the First and Second Respondents: Esser Legal Counsel for the Fourth Respondent: Mr D Gration Solicitor for the Fourth Respondent: TurksLegal IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 99 of 2012 BETWEEN: LIFEPLAN AUSTRALIA FRIENDLY SOCIETY LTD ACN 087 649 492 First Applicant FUNERAL PLAN MANAGEMENT PTY LTD ACN 003 769 640 Second Applicant AND: NOEL WOFF First Respondent RICHARD CORBY Second Respondent FUNERAL PLANNING AUSTRALIA PTY LTD ACN 050 727 015 Third Respondent ANCIENT ORDER OF FORESTERS IN VICTORIA FRIENDLY SOCIETY LIMITED Fourth Respondent JUDGE: BESANKO J DATE OF ORDER: 30 May 2014 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The applicants' application dated 12 February 2014 be adjourned to Tuesday, 3 June 2014 at 2:15pm for the making of orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 99 of 2012 BETWEEN: LIFEPLAN AUSTRALIA FRIENDLY SOCIETY LTD ACN 087 649 492 First Applicant FUNERAL PLAN MANAGEMENT PTY LTD ACN 003 769 640 Second Applicant AND: NOEL WOFF First Respondent RICHARD CORBY Second Respondent FUNERAL PLANNING AUSTRALIA PTY LTD ACN 050 727 015 Third Respondent ANCIENT ORDER OF FORESTERS IN VICTORIA FRIENDLY SOCIETY LIMITED Fourth Respondent JUDGE: BESANKO J DATE: 30 may 2014 PLACE: ADELAIDE REASONS FOR JUDGMENT INTRODUCTION 1 This is an application by the applicants, Lifeplan Australia Friendly Society Ltd and Funeral Plan Management Pty Ltd (referred to together as "Lifeplan"), for leave to amend their Amended Statement of Claim ("Statement of Claim") and for orders for discovery and production against the four respondents to the proceeding. The first respondent (Mr Woff) and the second respondent (Mr Corby) oppose the application for leave to amend the Statement of Claim. The third respondent, Funeral Planning Australia Pty Ltd ("FPA"), was wound up by an order made by the Supreme Court of Victoria on 12 June 2013, and it did not appear on the hearing of this application. The fourth respondent, Ancient Order of Foresters in Victoria Friendly Society Limited ("Foresters"), did not oppose the application for leave to amend the Statement of Claim. All respondents, other than FPA, opposed the application for orders for discovery and production. BACKGROUND 2 Lifeplan's case is that Mr Woff and Mr Corby, whilst employed by Lifeplan and immediately following the termination of that employment, breached fiduciary duties and duties of confidence which they owed to Lifeplan, breached copyright, and engaged in passing off. It is alleged that they did that by unlawfully conducting a business in competition with the business of Lifeplan in the pre-paid funeral industry using documents and information unlawfully taken from Lifeplan. Lifeplan's case is that the breaches and other acts by Mr Woff and Mr Corby were done with the knowing assistance of Foresters. Mr Woff and Mr Corby have been employed by Foresters since January 2011. Lifeplan's case is that, between January 2011 and March 2013, the competing business was conducted by and through FPA. Mr Woff and Mr Corby were and remain the only directors of FPA. Lifeplan's case is that there was an agreement between FPA and Foresters, which was entitled "Marketing & Services Agreement" ("MSA"). That agreement refers to a fund which is defined as the "FPA Funeral Fund established as a benefit fund of Foresters under the [Life Assurance Act 1995 (Cth)] and operating under the rules of the Fund". Foresters had established a funeral bond as an investment product with benefits provided by that fund. The parties agreed that Foresters would establish an investment product with benefits provided by the fund as a badged product. A FPA Badged Product is defined in the MSA to mean the "FPA Funeral Bond". The parties agreed to the issue of a Fund Disclosure Document, which is defined as a disclosure document issued from time to time by Foresters for the sale and marketing of the FPA Funeral Fund and the marketing of the FPA Badged Product by FPA during the Term and in the Territory as defined in the MSA. 3 Lifeplan's case is that since March 2013, when Foresters terminated the MSA with FPA on the ground of the latter's insolvency, the competing business was conducted by Mr Woff, Mr Corby and Foresters. Lifeplan tendered magazines published by associations of funeral directors in late 2013 which contained advertisements by Foresters of its pre-paid funeral business and the services and expertise of Mr Woff and Mr Corby. 4 The parties in this proceeding agreed to discovery of documents by categories and the Court made orders by consent for the discovery of categories of documents on 22 October 2013. The categories of documents Foresters was ordered to discover included the following categories: 8. Documents Describing the design, conception, selection or any other work or activity connected with the name "Funeral Planning Australia" or the logo(s) used by FPA in connection with its business or the promotion and marketing of the Foresters Products. 9. Documents created by or provided to the Foresters CEO, any present or past member of the Foresters Board or any present or past executive or officer of Foresters which Describe: (a) Woff's, Corby's and/or FPA's plans, budgets and proposals and actions to promote and market the Foresters Products, including any plans, budgets or proposals to promote and market the Foresters Products through or to funeral directors, including the creation of the Business Concept Paper reproduced in Annexure KAH12 to the Affidavit of Kerry Allan Hughes sworn on 15 March 2013, and any business proposals, plans, presentations, strategies, sales budgets and targets, sales projects, profitability models and records or notes of meetings; (b) the financial position of FPA and its performance in promoting and marketing Foresters' Products; and (c) the profits earned and revenue and financial benefits (including loans) to Woff, Corby, FPA or Foresters (or any person on their behalf) as a result of Woff, Corby or FPA promoting and/or marketing Foresters' Products, or arising from Foresters Products; and (d) any involvement of Woff and/or Corby in the promotion and/or marketing of the Foresters Products independently of FPA, including after FPA's liquidation. 10. Foresters Board minutes relevant to any consideration by the Foresters Board of any Documents referred to in the previous paragraphs and any other Foresters Board minutes referring to the promotion and marketing of the Foresters Funeral Benefit Fund by Woff, Corby or FPA. 11. Contracts, agreements, arrangements or understandings entered into with any funeral director and any correspondence between FPA and/or Foresters and any funeral director in connection with the promotion and/or marketing of the Foresters Products by FPA. (Emphasis added.) 5 The orders made against Foresters included an order that there be discovery where the documents are relevant to the issues raised by the pleadings and are, or have been, in Forester's control, and an order that the criteria for standard discovery in rr 20.14(1) and 20.14(2) of the Federal Court Rules 2011 (Cth) ("the Rules") not apply. 6 The categories of documents Mr Woff and Mr Corby were ordered to discover included the following categories: 7. Documents which Describe: (a) Woff's, Corby's and/or FPA's plans, budgets and proposals to promote and market the FPA Products, including any plans, budgets or proposals to promote and market the FPA Products through or to funeral directors, including the creation of the Business Concept Paper reproduced in Annexure KAH12 to the Affidavit of Kerry Allan Hughes sworn on 15 March 2013, and any business proposals, plans, presentations, strategies, sales budgets and targets, sales projects, profitability models and records or notes of meetings; (b) the finances of Woff, Corby and/or FPA and its performance in promoting and marketing any of the FPA Products in accordance with the Marketing & Service Agreement between Foresters and FPA dated 31 December 2010, including funds received or owing between Foresters and any transfer of funds or assets or the advance of any loan or financing between any one or more of Woff, Corby, FPA and/or Foresters, including all Monies paid by: (i) Foresters or its Third Parties to FPA; (ii) Foresters or its Third Parties to each of Woff and Corby; (iii) FPA or its Third Parties to Foresters; (iv) FPA or its Third Parties to each of Woff and Corby; (v) either of Woff or Corby or their Third Parties to Foresters; (vi) either of Woff or Corby or their Third Parties to FPA; (vii) Woff or his Third Parties to Corby prior or subsequent to Corby's employment with Foresters; and (viii) Corby or his Third Parties to Woff prior or subsequent to Woff's employment with Foresters; (c) the profits earned (or forecast to be earned) and other financial benefits to Woff, Corby, FPA and/or Foresters as a result of FPA promoting and marketing the FPA Products; (d) forms, correspondence or other Documents sent to or received from APRA by or on behalf of Woff, Corby, FPA and/or Foresters in connection with the FPA Products; (e) the solicitation and/or capture of funeral directors as clients for the FPA Products by Woff, Corby, FPA and/or Foresters at any time since 1 October 2009, including during the period in which Woff and/or Corby remained employed by Lifeplan; and/or (f) any involvement of Woff and/or Corby in the promotion and/or maintenance of the Foresters Funeral Benefit Fund independently of FPA, including after the winding up of FPA on 12 June 2013. 8. Contracts entered into with any funeral director and correspondence between FPA or Foresters and any funeral director in relation to the promotion and marketing the Foresters Funeral Benefit Fund by FPA. 9. All Documents Describing suggestions or arrangements made by, or instructions from or to Woff, Corby or any director, officer, executive, employee or consultant, contractor or other Third Party engaged or instructed by or on behalf of Woff, Corby, FPA or Foresters to destroy, alter or otherwise manipulate, alter, damage or affect any Documents which relate to the matters raised in the proposed Amended Statement of Claim filed by Lifeplan and FPM in this proceeding on 11 July 2013, including any such enquiries, arrangements or instructions which occurred and were Described in Documents since 1 October 2009. (Emphasis added.) 7 The discovery given pursuant to these orders created difficulties. 8 In relation to Foresters' discovery, Lifeplan claims that, despite the orders made against it and, in particular, the orders in relation to categories 9 and 10, it discovered no documents relating to the period after April 2013 other than those concerned with the winding up of FPA. In relation to categories 8 and 11, Lifeplan claims that Foresters did not discover any documents which relate to the design and selection of the FPA brand and Foresters' contracts with funeral directors. Lifeplan pointed out that, in its discovery, Foresters stated that none of its documents had been lost or destroyed. In relation to discovery made by Mr Woff and Mr Corby, Lifeplan claims that they discovered only two documents that were dated later than 2011. 9 Lifeplan raised in correspondence with Mr Woff, Mr Corby, and Foresters its concerns about whether the orders for discovery had been complied with. 10 Mr Woff and Mr Corby raised a number of matters in response. They referred to not having documents in their "possession". They also said that their activities after 2012, and whilst acting as employees of Foresters, did not appear to be relevant to any issue between the parties. Foresters also raised a number of matters in response, including the contention that "there is no allegation in the pleadings that ongoing promotion and marketing of Foresters' products by Woff and Corby in and of itself gives rise to a cause of action in your client". THE application 11 The orders sought in Lifeplan's interlocutory application are relevantly as follows: 1. The Applicants have leave to file the Further Amended Statement of Claim annexed to the affidavit of Richard Bunting sworn on 12 February 2014. 2. Pursuant to rule 20.21, each of the First Respondent, the Second Respondent, the Third Respondent and the Fourth Respondent: (a) file and serve by 6 March 2014 an affidavit stating (i) whether the documents described with reference to that Respondent in the Annexure to this Interlocutory Application, or any document of those categories, is or has been in the Respondent's control; and (ii) if any such document or category of documents has been but is no longer in that Respondent's control, when it was or they were last in that Respondent's control and what became of it or them; and (b) provide to the Applicants by 13 March 2014 electronic copies of all documents identified in that Respondent's abovementioned affidavit as being in that Respondent's control. 3. The Third Respondent provide to the Applicants by 20 March 2014 an invoice for the appointed liquidator's fees and disbursements reasonably incurred in the preparation of the Third Respondent's affidavit filed and served in accordance with paragraph 1(a) [sic] of this Order and its provision of documents in accordance with paragraph 1(b) [sic] of this Order, with payment due within one month. 4. Subject to the good faith resolution of any objections in relation to the reasonableness of any fees or disbursements which the Applicants communicate to the appointed liquidator of the Third Respondent by 27 March 2014, the Applicants pay the invoice issued by the appointed liquidator of the Third Respondent pursuant to paragraph 2 of this Order within one month of receiving it. THE ARGUMENTS AND THEIR RESOLUTION Leave to Amend the Statement of Claim 12 The contentious amendments to the Statement of Claim are those which are designed to make it clear that Lifeplan complains of the conduct of Mr Woff, Mr Corby and Foresters after the termination of the MSA and of the receipt of what are said to be "unlawful benefits and gains" after this time (see, for example, paragraphs 23(f), 23(g), 31(c)(iv) and 33(b)(iv)). I put the matter in that way because Lifeplan claims that its existing Statement of Claim was wide enough to encompass that conduct. I do not need to resolve that question because I have reached the clear view that the amendments should be allowed. 13 The objections of Mr Woff and Mr Corby to the proposed amendments must be rejected. It is true that the proposed amendments in, for example, paragraphs 23(f) and 23(g), might be more felicitously expressed. However, I do not think they contain, as Mr Woff and Mr Corby suggest, an allegation of the tort of conspiracy, or an allegation that Mr Woff and Mr Corby were conducting a business apart from their employment by Foresters, or an allegation that prior to January 2011 Foresters did not have a business based on the marketing of funeral benefit funds. Nor is it an answer to the application for leave to amend to advance evidence on the merits and, in particular, an allegation that no arguably infringing material was used by Mr Woff and Mr Corby after September 2011. That is a matter for trial. In my opinion, leave to amend the Statement of Claim should be granted. Orders sought pursuant to r 20.21 of the Federal Court Rules 2011 (Cth) 14 Rule 20.21 is in the following terms: 20.21 Order for particular discovery (1) If a party (the first party) claims that a document or category of documents may be or may have been in another party's control (the second party), the first party may apply to the Court for an order that the second party file an affidavit stating: (a) whether the document or any document of that category is or has been in the second party's control; and (b) if the document or category of documents has been but is no longer in the second party's control—when it was last in the second party's control and what became of it. (2) The first party seeking an order under subrule (1) must identify the document or category of documents as precisely as possible. 15 This rule is similar to other rules in the 2011 Rules in that it is framed in terms of a party's ability to apply for an order rather than the court's power to make an order. The authors of the Practice Book refer to O 15, r 8 of the Federal Court Rules 1979 (Cth) as the forerunner of r 20.21. 16 There are a number of differences between the two rules. Order 15, rule 8 identified the sources or evidence which may satisfy the test laid down in the rule of the existence of "grounds for a belief", whereas r 20.21 does not identify the sources or the evidence, or for that matter, the relevant test. Order 15, rule 8 referred to "some document or class of document", whereas r 20.21 refers to "a document or category of documents" and requires a party to identify the document or category of documents as precisely as possible. Order 15, rule 8 identified the link between the documents and the issues in the action or proceeding (i.e., "relating to any matter in question in the proceeding"), whereas r 20.21 does not state whether the test is similar to that test, or a test of whether the document is directly relevant or some other test. 17 On this application, Lifeplan submitted that r 20.21 operates in a similar way to O 15, r 8 and referred to authority in support of that proposition. Foresters' submissions were put on the basis that the documents sought by Lifeplan needed to be directly relevant, but did not address the fact that the order made against it on 22 October 2013 expressly excluded the criteria in rr 20.14(1) and 20.14(2). Foresters did submit that the "categories" set out in Lifeplan's application were not identified as precisely as possible in accordance with r 20.21(2). 18 I do not think the distinction between relevant and directly relevant makes a great deal of difference in the circumstances of this case. To the extent that it does, I would adopt the "relevant" test because that was the test adopted in the previous orders. It is true that the categories are broadly expressed, but I think they satisfy the requirement of r 20.21. I think the expression "category of documents" should be broadly construed, particularly in light of the way in which the expression and similar expressions are used in other rules in Part 20 of the Rules. 19 The first "category" identified in the annexure to Lifeplan's interlocutory application relates to FPA. In fact, it is not a category of documents, but rather seeks an order that FPA make standard discovery within the meaning of r 20.14 of the Rules. 20 In my opinion, this order should be made. FPA has not made discovery to date and it is, as I have said, in liquidation. The evidence before the Court establishes that Lifeplan requested documents from FPA but, subject to what is said below, these documents have not been provided to Lifeplan. It establishes that FPA holds at least "the general ledger of FPA and a copy of the Loan Agreement along with the accounting records as delivered up by FPA's accountant" (letter from the liquidator of FPA to Lifeplan's solicitors dated 4 December 2013). There is a statement in the submissions that some documents were delivered up by the liquidator of FPA in late February 2014, but the documents delivered up are likely to be incomplete. The activities of FPA are relevant to the causes of action alleged in the Statement of Claim. For example, in paragraph 18, it is alleged that from about January 2011 Mr Woff, Mr Corby and FPA knowingly and unlawfully used Lifeplan's confidential and copyright information in direct competition with Lifeplan's business, and various claims for relief are made against FPA. Lifeplan acknowledges that it will have to pay the liquidator's reasonable costs and disbursements and the orders in paragraphs 3 and 4 of Lifeplan's interlocutory application should also be made. 21 I turn now to the orders which are sought against Mr Woff, Mr Corby and Foresters. 22 Lifeplan divided the nine categories of documents identified in the annexure to Lifeplan's interlocutory application into three classes, and the first class was said to be categories of documents relating to FPA. 23 As to the first class, Lifeplan seeks the documents in category 2 from Mr Woff and Mr Corby. That category is in the following terms: 2. Any documents of, or relating in any way to, the Third Respondent which are or were, at any time, in the control of the First Respondent or the Second Respondent in his capacity as a director of the Third Respondent. 24 As to the first class, Lifeplan seeks the documents in categories 4, 5 and 7 from Foresters. Those categories are in the following terms: 4. Any documents of, or relating in any way to, the Third Respondent which are or were, at any time, in the control of the Fourth Respondent by virtue of or in connection with the MSA. 5. Any documents of, or relating in any way to, the Third Respondent which are or were, at any time, in the control of the Fourth Respondent by virtue of or in connection with the Fourth Respondent's employment of the First Respondent or the Second Respondent, or any other relationship, contractual or otherwise, between the Fourth Respondent and any of the First Respondent, the Second Respondent and the Third Respondent. 7. Documents describing, relating to or consulting the drafting, input, consideration, approval or implementation by the Fourth Respondent of the Third Respondent's marketing and collateral documents, including but not limited to: (a) the Introduction to Funeral Planning Australia; (b) the Third Respondent's Pre-paid Funeral Plans marketing brochure; (c) the Third Respondent's Stationery Order Form; (d) the Third Respondent's Funeral Fund Benefit Claim Form; (e) the Third Respondent's pre-paid funeral contract template; and (f) the Third Respondent's website. (Original emphasis.) 25 As I have previously said, before the application was issued, Mr Woff and Mr Corby denied that they had any documents in their "possession" of a nature which fall within the terms of category 2. However, the Rules are framed in terms of documents in a person's "control", and "control", if referring to a document, means possession, custody or power. If an order for discovery is made, it will usually be made by reference to whether documents are, or have been, in a person's control, that is, in their possession, custody or power. In the course of submissions, Mr Woff and Mr Corby acknowledged a deficiency in their response in referring only to possession and, at the very least, that must be remedied. In the course of submissions, Mr Woff and Mr Corby suggested that category 2 would require them to indicate which documents are in their possession, which documents are in their custody and which documents are in their power. I reject that submission, and what they are required to do is identify which documents are or have been in their possession, custody or power. 26 An order in terms of category 2 should be made. 27 As far as categories 4, 5 and 7 and Foresters are concerned, I think an order in terms of those categories should be made. The business of FPA operated for just over two years, and under the MSA there were a number of obligations on FPA to keep books, records and files and to make reports to Foresters (clauses 4.1(h), 4.1(i), 4.1(j), 4.1(m), 4.3(a)). There were also obligations on Foresters to provide information to FPA (clause 5.1(a)). I am satisfied that categories 4, 5 and 7 better capture the relevant documents than the categories which formed part of the orders made on 22 October 2013 and, based on paragraph 38 of Mr Richard Bunting's affidavit sworn on 12 February 2014, I am satisfied that there are reasonable grounds to believe that such documents exist. 28 The second class of categories of documents identified by Lifeplan concerns documents relating to the alleged competing pre-paid funeral products business conducted by Mr Woff, Mr Corby and Foresters, which continued independently of FPA before and after the liquidation of FPA, and which is continuing. 29 Lifeplan seeks the documents in category 3 from Mr Woff and Mr Corby. That category is in the following terms: 3. Documents created or modified at any time on or after 1 March 2013 which relate to the conduct or involvement of the First Respondent or the Second Respondent in connection with any business in the pre-paid funeral product industry anywhere in Australia, including in relation to: (a) the funeral benefit fund established by the Fourth Respondent which the Third Respondent agreed to promote under the 31 December 2010 Marketing and Services Agreement executed by the Third Respondent and the Fourth Respondent (MSA); or (b) any other investment products for the purposes of planning for a funeral in advance of the customer's death, including without limitation, funeral bonds and pre-paid funeral plans and ancillary products or services, promoted or marketed by the First Respondent, the Second Respondent or the Third Respondent on behalf of or in collaboration with the Fourth Respondent. 30 I think an order in relation to this category should be made. It is apparent that, prior to the issuing of this application, Mr Woff and Mr Corby did not consider that events after 2012 were relevant. Furthermore, a matter they raised which goes to the merits of Lifeplan's claims is a matter for trial, not a reason to refuse discovery. 31 Lifeplan seeks the documents in categories 6 and 8 from Foresters. Those categories are in the following terms: 6. Documents, including documents created or modified at any time on or after 1 March 2013, describing, relating to or constituting enquiries from, or oversight by, the Fourth Respondent in relation to the First Respondent, the Second Respondent or the Third Respondent in connection with the operation of any pre-paid funeral products business or the promotion, marketing or administration of any pre-paid funeral products or business, or otherwise arising from: (a) the funeral benefit fund established by the Fourth Respondent which the Third Respondent agreed to promote under the MSA; or (b) any other investment products for the purposes of planning for a funeral in advance of the customer's death, including without limitation, funeral bonds and pre-paid funeral plans and ancillary products and services, promoted or marketed by the First Respondent, the Second Respondent or the Third Respondent on behalf of or in collaboration with the Fourth Respondent. 8. The Fourth Respondent's collateral and marketing documents for Foresters Funeral Benefit Fund – Exempt and Taxable created or modified at any time on or after 1 March 2013, including but not limited to the Fourth Respondent's: (a) Introduction to Funeral Planning Australia or equivalent document; (b) Pre-paid Funeral Plans marketing brochure or equivalent document; (c) Stationery Order Form or equivalent document; (d) Funeral Fund Benefit Claim Form or equivalent document; (e) pre-paid funeral contract template or equivalent document; and (f) website. (Original emphasis.) 32 Mr Kerry Hughes is the chief executive officer of Foresters. He has sworn two affidavits which have been tendered by Foresters on this application. 33 In his first affidavit, Mr Hughes deposes to the fact that Foresters filed its list of documents on 17 January 2014 and in it Foresters identified 383 documents. Foresters gave Lifeplan electronic copies of the discovered documents, other than those that had already been provided to Lifeplan in connection with the pre-trial discovery proceeding in the Supreme Court of South Australia. One additional document was discovered by Foresters in February 2014. 34 It seems that, generally speaking, Foresters did not discover documents created after the winding up of FPA as it did not consider them to be relevant to the issues raised by the pleadings. Foresters has made it clear that, should further discovery be required by reason of amendments to the pleadings, it will give discovery accordingly. The main submission it made was that, rather than make new orders in terms of categories 6 and 8, discovery should take place in accordance with the orders made on 22 October 2013. I do not agree. The categories which were the subject of the orders made on that date appear to have caused difficulties. For example, it is not clear to me why there was no discovery of documents after, say, March 2013 in light of the wording of category 9(d) in the orders made on 22 October 2013 (at [4]). I think an order in relation to categories 6 and 8 should be made. 35 The third class of categories of documents identified by Lifeplan relates to documents said to be required by Lifeplan's forensic accounting expert to prepare evidence regarding the profits and gains made by the respondents. The documents are sought from Foresters. Category 9 is in the following terms: 9. For the period FY2008 to FY2013; (a) monthly profit and loss reports for the prepaid funeral business being the business relating to prepaid funeral products, funeral benefit funds or any other investment products related to the planning for a funeral in advance of a customer's death, including funeral bonds and prepaid funeral plans and ancillary products or services (the "prepaid funeral business"), including details of each category of revenue and expense; (b) financial records extracted from the Fourth Respondent's accounting system showing the underlying financial data required to assess the revenue and expenses of the prepaid funeral business, including: (i) a chart of accounts that identifies those general ledger revenue and expense accounts that relate to the prepaid funeral business; (ii) the general ledger data for the general ledger revenue and expense accounts identified as relating to the prepaid funeral business; (iii) a listing of the investment contract funds and or insurance contract funds that relate to the prepaid funeral business; (c) reconciliations of prepaid funeral business profit and loss report information to annual audited accounts; (d) forecasts, budgets and business plans in relation to the prepaid funeral business; and (e) actuarial reports relating to the prepaid funeral business; (f) monthly reports of revenue by customer for the prepaid funeral business including name, age, product type, dollar amount and any other customer or product detail recorded by the business; (g) customer contracts, policy documents or other correspondence containing information about the nature and terms of the prepaid funeral business revenue streams and transactions; (h) monthly sales and/or marketing reports identifying the rate and source of the acquisition of new customers; (i) reports of the monthly revenue associated with the prepaid funeral business including any investment income, insurance premiums and revenue from entry fees, commissions or other sources; (j) list of employee employed in the prepaid funeral business over the period; (k) payroll reports in relation to employees employed in the prepaid funeral business over the period detailing the nature and terms of any commissions, management fees or other expenses actually incurred by the prepaid funeral business; (l) reports of monthly expenses incurred in the prepaid funeral business, such as marketing and promotional costs, claims and benefits paid; and (m) details of any other sources of cash receipts, deposits or revenue from, and expenses, withdrawals or distributions to, customers or policyholders of the prepaid funeral business. 36 In order to understand the issue between Lifeplan and Foresters which has given rise to the request for documents in category 9, it is necessary to refer to evidence tendered by the parties on the application. 37 In his first affidavit, Mr Hughes states that Foresters conducts a number of activities. The funeral fund which is the subject of this proceeding is known as "Foresters Funeral Benefit Fund – Exempt and Taxable" ("Foresters Funeral Fund"), and it was established on 3 December 1990. Foresters has other funeral funds which it manages. As at 30 June 2010, the balance of the Foresters Funeral Fund was $13,238,399. As at 30 June 2013, the balance of the Foresters Funeral Fund was $62,940,608. There are currently more than 12,000 policies in the fund. 38 Mr Hughes states that, although the MSA provided that Foresters would establish a "FPA badged product", being a funeral fund developed by Foresters specifically to be promoted and marketed by FPA, this in fact did not occur and FPA only ever promoted and marketed the Foresters Funeral Benefit Fund as contemplated by Recital E to the MSA. 39 Mr Hughes states that Foresters does not enter into contracts with funeral directors in connection with the promotion and marketing of the Foresters Funeral Fund. 40 The MSA was terminated on 8 March 2013 and Foresters has continued to promote and market the Foresters Funeral Fund since that time. Mr Woff and Mr Corby remain employees of Foresters and their duties include assisting in the marketing and promotion of the Foresters Funeral Fund. 41 Mr Hughes states that Foresters has discovered documents in respect of the planned and actual financial performance of the Foresters Funeral Fund, including the Foresters profit revenue module, monthly board reports provided to the board of Foresters setting out in detail the income and expenses of the Foresters Funeral Fund for the relevant month and other activities undertaken in respect of the promotion and marketing of the Foresters Funeral Fund, and monthly management reports setting out further details of the activities undertaken in respect of the promotion and marketing of the Foresters Funeral Fund. The monthly board reports show that Foresters has made trading losses in the Foresters Funeral Fund business of $383,798, $508,644, and $197,752 in the 2011, 2012, and 2013 financial years respectively. 42 Mr Hughes states that the documents sought in category 9 are extremely confidential and commercially sensitive. By way of example, he states that Lifeplan is seeking the individual details of more than 12,000 individual policy-holders in the Foresters Funeral Fund and the names and salaries of all Foresters employees involved in that fund. 43 Mr Hughes states that it would require significant time and resources for Foresters to locate, identify and discover the relevant documents to the extent they exist, bearing in mind that Lifeplan seeks financial data going back to 2008. He also states that in many instances the specified documents do not exist and would not exist unless specifically created for the purposes of this proceeding, which again would require significant time and resources to do, especially in the case of the older financial data. 44 Ms Dawna Wright is a chartered accountant and a partner in the forensic practice of the firm, McGrathNichol. She states that she specialises in dispute advisory and investigation services. She has sworn an affidavit in relation to this application and it is relied upon by Lifeplan. 45 Ms Wright identifies the information which she would require for the purposes of providing expert evidence in relation to Lifeplan's claim against the respondents for an account of profits. She sets out a broad description of her understanding of the business model applicable to Foresters' pre-paid funeral products business. I will not summarise her evidence because it is sufficient to say that her understanding is that Foresters' profit from managing the fund is a management fee of 2%, which is levied on the funds under management. Ms Wright states that, in order to project the profits which Foresters will derive from any sales of pre-paid funeral products in the Foresters Funeral Fund, an accurate estimate of when the money in the fund will be withdrawn is necessary. When monies will be withdrawn depends on when the persons who have purchased the pre-paid funeral products die. Ms Wright states that such an estimate "can only be meaningful if based on information such as age, geographical location, occupation, income and other objective individual and demographic data". Ms Wright identifies the information she needs in order to prepare her expert evidence. I will not summarise that information. She does say that historical data going back at least three years before the start of the alleged misconduct (i.e., to 2007) through to the present day should provide sufficient information for her "to perform a meaningful account of profits regarding Foresters' pre-paid funeral products for the purpose of this proceeding (including the specific identification or apportionment of those profits that are attributable to the alleged misconduct)". 46 Mr Hughes swore an affidavit in response to Ms Wright's affidavit. In his second affidavit, he refers to the regulatory environment in which the Foresters Funeral Fund is administered. He states that Foresters offers pre-paid funeral plans and funeral bonds. In the case of a pre-paid funeral plan, an individual makes an investment in conjunction with a fixed price funeral contract entered into between the individual and a funeral director. The individual assigns the benefit of their investment, but not their membership of the fund to the funeral director. In the case of funeral bonds, the individual makes an investment to provide for their funeral expenses. The benefit of the investment may or may not be assigned to the funeral director. Funeral directors are not members of the fund. The Foresters Funeral Fund is, and always has been, capital guaranteed, which means that the guarantee is supported by the solvency reserves maintained by Foresters in accordance with the requirements of the Australian Prudential Regulatory Authority. Surpluses in the Foresters Funeral Fund, that is to say, returns on investment less fees, taxes and expenses and amounts allocated to reserves, are generally allocated to members' accounts by way of bonuses. 47 Foresters collects information about life expectancy, including an applicant's name, marital status, address and date of birth. The information collected by Foresters does not include the occupation or income of the applicant. Foresters holds the information collected from members subject to strict privacy obligations. To the best of Mr Hughes' knowledge, in determining life expectancy, Foresters' actuary does not take into account where the members live, or their occupation or income. 48 Mr Woff also made some observations about Ms Wright's evidence in an affidavit he swore but it is not necessary for me to mention these observations. 49 Lifeplan's case is that it is entitled to an account of profits and that the account will include an allowance for future profits as well as an award for past profits. As I understand it, Lifeplan contends that its entitlement is based on continuing unlawful conduct, or, if that is not occurring, on the basis that the unlawful conduct has meant that FPA was able to commence business immediately in January 2011 and has facilitated, and will facilitate, the growth of the Foresters Funeral Fund. In order to calculate 2% of funds under management, it is necessary to exclude those members who joined prior to December 2010, and to have information as to the size of the Fund between December 2010 and the present. To calculate profits which may be made in the future, it is necessary to predict the size of the Fund in the future. In order to do that, it is necessary to form a view as to the likely date of death of members and, to predict that date, at least the age and gender of members must be ascertained. In addition, expenses incurred in producing the profit will be relevant and documents accurately recording those expenses should be disclosed. 50 Category 9 refers to documents relating to a period of five years. A considerable volume of documents may be involved. I am not satisfied at this stage that it is necessary to make an order going back further than the 2010 financial year. Aside from any other consideration, discovery should only be ordered of what is necessary (see, for example, r 20.11). If it transpires that further discovery is necessary, then an application can be made. 51 I think it is appropriate to make an order which includes category 9(a), even if in practical terms it means no more than that documents after April 2013 must now be discovered. 52 I think it is appropriate to make an order which includes categories 9(b) and 9(c) because the documents captured by these paragraphs appear to be relevant to an account of profits. 53 I think it is appropriate to make an order which includes category 9(d) because plans for the future growth of the fund may be relevant to an account of profits. 54 I think it is appropriate to make an order which includes category 9(e) because the documents are clearly relevant to the likely size of the Fund in the future. 55 I think it is appropriate to make an order which includes category 9(f). Foresters submitted that there may be no such documents or, in any event, it would involve an extraordinary level of detail to verify something that already has been discovered. It was not clear to me from the submissions what documents have already been discovered that means that category 9(f) involves mere verification. 56 As to paragraph 9(g), discovery in relation to that category could be quite burdensome to Foresters. However, I cannot see any way of avoiding the making of an order which includes category 9(g) because the information is clearly relevant. Foresters did not proffer an alternative which might be less burdensome to it. 57 In relation to categories 9(h) and 9(i), counsel for Foresters told me that, as he understood it, the documents in these categories had already been discovered. Rather than leave the position capable of further dispute, I will make an order which includes categories 9(h) and 9(i). 58 I cannot see a sufficient reason on the evidence to make an order which includes categories 9(j) and 9(k). 59 Finally, although categories 9(l) and 9(m) are very general, they seem to relate to the account of profits exercise, and I will make an order which includes those categories. 60 The orders in paragraph 9 relate to what has been referred to in the evidence as the Foresters Funeral Fund and, to the extent necessary, that should be made clear. Where appropriate, the orders should be the subject of a confidentiality regime. Absent agreement, the Court will determine the necessary regime. conclusion 61 I will adjourn the applicants' application dated 12 February 2014 to 3 June 2014 for the making of orders on the application and other interlocutory orders needed to progress the proceeding to trial. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 30 May 2014