Hardcastle v Verhoef & Anor [2002] NSWSC 513

New South Wales Supreme Court

CITATION : Hardcastle v Verhoef & Anor [2002] NSWSC 513 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1216/02 HEARING DATE(S) : 31 May 2002 JUDGMENT DATE : 31 May 2002

Mr Philip Julian Hardcastle PARTIES : Mr Hendrikus Theodorus Verhoef Mr Thomas Baines Gilpin JUDGMENT OF : Davies AJ at 1

COUNSEL : The Plaintiff in person Mr M A Bradford for the Defendants SOLICITORS : Mr Paul Solomon, Solicitor for the Plaintiff Musgrave Peach Solicitors for the Defendants CATCHWORDS : Application for Discovery of Documents - whether documents necessary to be produced for the purpose of the proceedings - no question of principle LEGISLATION CITED : Corporations Act 2001 (Cth), s198F DECISION : 1. The issue of damages is set aside to proceed on a separate hearing and the case will proceed in the first instance on the issue of liability; 2. Application dismissed; 3. Costs to be costs in the cause; 4. Liberty to the Plaintiff to apply for discovery of any documents that may be necessary for the purposes of determining the issue of liability; 5. Parties have leave to approach the Registrar.

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Davies AJ

Friday, 31 May 2002

1216 / 02 Hardcastle v Verhoef & Anor JUDGMENT 1 Davies AJ: This is an application for discovery of documents. The applicant, Mr Philip Julian Hardcastle, who appears for himself, has expressed the application to be under s 198F(2) of the Corporations Act 2001, which provides "A person who has ceased to be a director of a company may inspect the books of the company (including its financial records) at all reasonable times for the purposes of a legal proceeding: (a) to which the person is a party; or (b) that person proposes in good faith to bring; or (c) that the person has reason to believe will be brought against them. This right continues for seven years after the person ceased to be a director of the company." 2 Mr Hardcastle has sought access to documents of Advanced Mining Technologies Pty Limited which are specified in Annexure R to the affidavit of Paul Daniel Solomon sworn 28 May 2002. 3 Mr Hardcastle has submitted that the documents are necessary to prove the damages in the present proceedings. He has said that the documents are not necessary for the proof of liability. 4 The documents sought are generally of quite a wide range, but they include the general ledger for the period 1995 / 1996 through to the year 2001 / 2002, and also the sales ledger of the same period. Obviously, such documents include many matters of a confidential nature. 5 The defendants oppose the application on a number of grounds, but underlying their opposition is the fact that the records sought contain a great deal of confidential information. 6 It seems to me that there are proceedings on foot and that an order should be made for discovery of all such documents as are necessary for the purposes of the present proceedings. 7 Section 198F(2) upon its terms gives a person who was a director in the last seven years a right to inspect all documents of the company. However, the present application is brought in these present proceedings and, as such, I think I should not make an order for the discovery of any documents unless the documents are necessary – I use that term in the sense "desirable" – to be produced for the purpose of the proceedings. 8 It seems to me that this would be an appropriate case in which to split the issues of damages and liability. It will be a difficult enough case on its own in relation to liability without introducing the much more complex issue of damages, which in a case such as the present could double the length of the hearing. 9 I propose to make an order that the issue of damages be set-aside for a separate hearing and that the case proceed in the first instance on the issue of liability. 10 Mr Hardcastle said that, at this stage, he has adequate material for the case on liability. However, I should expressly say that that is a matter which he should examine in consultation with his solicitor, and, if he requires access to documents for the purpose of proving liability, he should renew his application explaining the relevance of any documents he wishes as to the issue of liability. In my view, any such documents as are necessary for the case on liability should be produced. 11 I shall therefore dismiss the application, but will order that the costs be costs in the cause. I will reserve liberty to Mr Hardcastle to apply for the discovery of any documents which may be necessary for the purposes of the issue of liability. -oOo-