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Fuji Xerox - vs - Whittaker, EY & ors: let the judgements begin

The long-running and complex legal saga that is Fuji Xerox and Fuji Xerox Finance vs former employees Neil Whittaker and Devlin Bell, plus accounting form EY and its former partner EA Lang; is entering the beginning of the end. A judgement has already been handed down on an interlocutory application by FXA to have part of Devlin Bell's defence struck out. It was denied.

Scales of Justice 
 A first of probably many judgements has been handed down in the case involving FXA and former employees and auditors

It should be noted that the original claim by Fuji Xerox Australia and Fuji Xerox Finance against Whittaker, Bell, EY and Lang has since been countered by cross-claims by those parties against Fuji Xerox. Therefore the plaintiff is both the prosecutor and defendant, and the defendants become plaintiffs also.

This does make things complicated but it is what can happen under law. On November 5th, Justice Colvin issued orders following judgement on FXA's interlocutory application to have certain aspects of Bell's and EY's defence struck out. Put simply, it related to details of actual orders given in the normal process of hierarchical company management. Justice Colvin ordered the following:

Federal Court of Australia District Registry: New South Wales Division:

FUJI XEROX AUSTRALIA PTY LTD (ACN 000 341 819) and another named in the schedule

Applicants NEIL WHITTAKER and others named in the schedule Respondents

ORDER: JUDGE: JUSTICE COLVIN DATE OF ORDER: 05 November 2020

WHERE MADE: Perth

THE COURT ORDERS THAT:

1.The applicants' amended interlocutory application filed 28 October 2020 is dismissed.

2.The costs of the application as between the applicants and the second respondent be costs in the cause.

3.The costs of the application as between the applicants and the third and fourth respondents be reserved

('Costs in the cause' means that costs are borne by whoever is the ultimate losing party. Reserved costs means that who pays is yet to be determined)

In making judgement in FXA's application against Bell, Justice Colvin noted:

"The application against Mr Bell should be dismissed. As to costs, I note that by a process of conferral the extent of particulars sought was confined. Given the concession made by Mr Bell after submissions were filed and the outcome on the balance of the application, the parties have each had a measure of success. More importantly, the costs associated with the application have advanced the process of elucidating the issues as between the parties. In those circumstances, the appropriate order is that the costs of the application be costs in the cause."

In making judgement against the application against EY and EA Lang, Justice Colvin noted:

"In those circumstances, EY and Mr Lang could have proceeded to strike out the plea. Instead they have simply maintained, in effect, that it is a plea made in a form to which a meaningful response cannot be pleaded beyond a general denial. I accept the position of EY and Mr Lang."

"As matters presently stand, the application against EY and Mr Lang should be dismissed. As I have indicated, EY and Mr Lang have foreshadowed that amendments will be sought to their defence. It is their position that the amendments will deal with issues that are unrelated to the present application. However, in circumstances where the final form of the pleadings is not yet settled I propose to reserve the costs on the application as against EY and Mr Lang."

EY
EY's Sydney HQ

So, 'first blood' is to the defendants Bell, EY and Lang in not having parts of their defences struck out, but there is a long way to go in this case, with the next case management hearing being adjourned to next week, November 24th, also in the Federal Court in Perth, WA. The orders were:

1) On or before 13 November 2020, the second, third and fourth respondents do file and serve minutes of proposed amended pleadings.

2) The case management hearing be adjourned until 9.15 am AWST on 24 November 2020

It appears the case against Neil Whittaker is to proceed separately.

An interesting observation: London-headquartered EY (formerly Ernst & Young), at USD$37.2 billion total revenues in 2020, is approximately 66% larger than Fujifilm in terms of revenues and employs almost 299,000 people globally, compared with Fujifilm's approx. 32,000.