Case: Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490
Outcome: applied
support of this contention the respondents rely on statements of Sheppard and Pincus JJ in Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494. This case also involved an application under s 52 Trade Practices Act 1974 (Cth) for misleading and deceptive conduct in relation to the sale of a business. The majority of the Full Court said: 'We reiterate that, where a purchase has been induced by misleading conduct, it is not enough, in order to recover losses subsequent to the purchase, to prove that but for the misleading conduct or as a partial consequence of it, the agreement to purchase would not have been made; that is so in every successful application of that kind. It is not the law that in every such case the party held to have been engaged in misleading conduct (who may have acted quite innocently) becomes the insurer of the other's success and prima facie liable to indemnify him against the consequences of the purchase. As the trial judge said in the present case: "To recover a loss sustained in the business, the applicant must show more than that it was sustained in the conduct of that business; for to show only that is to establish what is perfectly consistent with the loss having arisen from his own misguided management decisions, or even total neglect."' I agree with this reasoning. The applicants state that: &#8226; records up to 22 March 2005 are in the possession of the respondents already and are not required to be discovered by the applicants &#8226; the applicants do not have records after 22 March 2005, but they may be with the Administrator. Unfortunately the respondents have not specifically indicated how these documents satisfy the criteria under by O 15 r 2(3). To the extent that the applicants are required to prove their case as explained by the Full Court in Netaf the rain data records appear to be documents which fall within r 2(3). The response of the applicants does not suggest a dispute that the documents are discoverable. However, the applicants have stated that these documents up to 22 March 2005 are already in the possession of the respondents. This is not denied by the respondents. In my view, O 15 r 2(4) applies in this case. It is difficult to know what further could be achieved by requiring the applicants to discover the documents. However, the respondents in relation to documents between 22 March 2005 and 23 June 2005 also claim that the documents are relevant to loss or damage claimed by the second and third applicants as to causation and measure of loss. The respondents rely on the Netaf case. In my view these documents fall within the scope of O 15 r 2(3) and should be discovered by the applicants. Item 25 Third applicant's orchard management plans There does not appear to be any dispute that this document, if it exists, should be discovered. The applicants claim however that they do not possess the document. On the basis that, as submitted by the respondents, documents of that class are referred to in other documents discovered by the applicants in the circumstances, the appropriate order is that the applicants advise the respondents whether the document is in their custody or power, and if it is, the applicants should discover it. Items 26, 27 and 28 Cash flows, correspondence and emails As submitted by the respondents, the applicants do not suggest that these documents are not discoverable. On 5 July 2006 the applicants indicated that they were searching their records and would revert to the respondents shortly. As at the hearing date of this matter, it appears that they had not been discovered. It does not appear that these items have been the subject of previous correspondence between the parties. As a consequence of this, there are few grounds submitted by the respondents as the basis of discovery, and no responses from the applicants in relation to discovery of these documents. To the extent that I can interpret the Schedule, the only grounds submitted as a basis for discovery of these documents are: &#8226; in relation to items 33, 34, 37, 41 and 46: they are relevant to allegations in issue and reliance. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case &#8226; there are no grounds asserted in relation to items 47, 48 and 49 &#8226; in relation to items 50, 51, 52, 53: these classes of documents are relevant to allegations in issue as to reliance and loss or damage. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case; also see Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494 &#8226; in relation to items 54 and 55: these classes of documents are relevant to allegations in issue as to reliance. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case &#8226; in relation to item 56: these classes of documents are relevant to allegations in issue as to reliance. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case. Also see Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494 &#8226; there are no grounds asserted in relation to item 57 &#8226; in relation to item 58: these classes of documents are relevant to allegations in issue as to loss or damage. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case. Also see Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494. Other than in relation to the '100 day plan' referred to in item 58, and in relation to which an order will be made, it is not possible to identify whose documents these documents are. I also note there is some duplication, for example '2005 business plan' in items 53 and 56, 'SHE plan' in items 53 and 58, 'marketing plan' in items 53, 56 and 58, and 'communications plan' in items 53 and 56. Although the respondents have referred to the Netaf case in relation to a number of the items, the relevance of the principle is not substantiated in relation to these items. Further, the 'train of inquiry' test is applied in relation to all documents with the exception of items 47, 48, 49 and 57. On the basis of the evidence before me I am not satisfied that an order for discovery is necessary in relation to any of these documents. I order that the time for service of this Notice of motion be abridged until a time no later than 4.00 pm 20 July 2006.