Arundel Chiropractic v Dep Com of Tax
[2000] HCATrans 423
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B61 of 1999
B e t w e e n -
ARUNDEL CHIROPRACTIC CENTRE PTY LTD
Applicant
and
THE DEPUTY COMMISSIONER OF TAXATION
Respondent
Notice of motion
CALLINAN J
(In Chambers)
TRANSCRIPT OF PROCEEDINGS
AT BRISBANE ON THURSDAY, 28 SEPTEMBER 2000, AT 10.33 AM
(Continued from 14/9/00)
Copyright in the High Court of Australia
MR A.J.H. MORRIS, QC: If the Court pleases, I appear with my learned friend, MS A. JULIAN‑ARMITAGE, for a company called the Institute of Taxation Research Pty Ltd, which has been nominated as a respondent to a notion of motion before your Honour this morning. (instructed by Rea & Sockhill)
HIS HONOUR: Who appears for Arundel?
MR MORRIS: I do not know that there is any appearance for Arundel this morning.
MR P.V. SLATTERY: May it please the Court, I appear with MS G.L. EBBECK for the Deputy Commissioner. (instructed by Australian Government Solicitor)
HIS HONOUR: I have received a great deal of material – in fact a mountainous amount of material – which I just have not had time to digest. In any event, these are your applications, Mr Slattery?
MR SLATTERY: That is correct, your Honour, yes.
HIS HONOUR: What applications do you have this morning?
MR SLATTERY: We are pressing three applications today and I am in your Honour’s hands as to how far we go with them. What I have in fact done is to have prepared a proposed sequence of events. I have anticipated your Honour would have a mountain of paper and would want to know how we are going to find our way through all of this.
HIS HONOUR: That is helpful, thank you.
MR SLATTERY: Can I hand up that and a copy to my friend.
HIS HONOUR: I think I gave leave for you to issue subpoenas, is that correct?
MR SLATTERY: That is correct, your Honour.
HIS HONOUR: And those subpoenas have been served upon Dr Mark Brown and the Institute, is that correct, Mr Morris’s client?
MR SLATTERY: That is correct, yes.
HIS HONOUR: Who is Dr Brown?
MR SLATTERY: I believe Dr Brown is in the body of the Court, your Honour.
HIS HONOUR: And that was a subpoena addressed to him personally?
MR SLATTERY: That is correct, your Honour, yes.
HIS HONOUR: Leave was given to issue that subpoena.
MR SLATTERY: On the last occasion, your Honour, yes. That was a matter in chambers. I think your Honour had to authorise the issue of a subpoena.
HIS HONOUR: Yes, I did. The subpoenas that sought documents, has there been a response to those?
MR SLATTERY: Not as yet, I am sorry, with all of the flurry that has gone on this morning. I have not had a chance to identify and speak to Dr Brown about those matters. We would be making of course an application in relation to Dr Brown’s attendance concerning the documents for an examination of Dr Brown concerning the contents of the documents he produces.
HIS HONOUR: What is Dr Brown’s role in this matter? What does the material show?
MR SLATTERY: Perhaps if I take a little bit of time to express that detail. Your Honour may have had the opportunity to read the written submissions of my friend.
HIS HONOUR: Yes, I did. I read Mr Morris’s submissions.
MR SLATTERY: Your Honour would have seen, I think, that there are probably three points that come out of those written submissions. The first is absence of evidence. The second appears to be that whatever costs have been incurred are the fault of the Commissioner as opposed to costs which would properly be paid to the Deputy Commissioner on the exercise of your Honour’s discretion. The third point appears to be a constitutional point. As your Honour would have seen in the material which I have just handed to you in paragraphs 3 and 4, we have made a concession that if my friend was right that the only material would be the material upon which he bases the presumptions which ground his submissions, then your Honour ought not to join and make an order for costs against ITR. That of course is a submission in a vacuum. The vacuum can only be filled by the ITR itself by providing the material that relates to the relationship between the ITR and Arundel.
HIS HONOUR: Is that right? What about material which might show, for example, that Arundel had paid ITR money or had corresponded with ITR? Would that not also ‑ ‑ ‑
MR SLATTERY: Yes, that is correct, your Honour. All of those documents we expect to come out of the material which has been subpoenaed. Of course, there would be the reverse, that is that coming from ITR itself as well, which we would tender as part of the business record of the ITR. So the vacuum that I am talking about that really does premise my friend’s submission has got to be filled. It can only be filled by the active participants, which are Arundel and ITR.
HIS HONOUR: I do not know. Presumably Arundel had a bank account.
MR SLATTERY: Presumably. I have not yet seen the documents, your Honour. I do not know.
HIS HONOUR: Payment, if there were payment, would probably be by cheque, of which a bank would have a record, but of course you would say you do not know which bank anyway.
MR SLATTERY: Correct, your Honour. I do not know until I see the cheque account which bank it is. I am sorry, I have to start from the foundations and work up the wall, so to speak.
HIS HONOUR: Yes. In any event, Dr Brown is here in response to the subpoena and you want to examine him.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: Was the subpoena to produce documents directed to Dr Brown?
MR SLATTERY: Yes, it was, your Honour. Can I explain why?
HIS HONOUR: Yes.
MR SLATTERY: Dr Brown, as we understand the public record, is no longer a director of Arundel.
HIS HONOUR: But he was at some stage?
MR SLATTERY: He was until, we understand, 31 January 2000.
HIS HONOUR: Does the material show that?
MR SLATTERY: Yes, exhibit 16 to the affidavit of Mr Henry sworn on 15 August. Does your Honour want to go to that?
HIS HONOUR: You tell me what is in it that is relevant.
MR SLATTERY: Effectively it says that the – I had the wrong exhibit numbers. It is exhibit 15 of that affidavit. I need to read 15 and 16 together. But that affidavit shows that on 31 January Arundel changed its name to Nuradel Pty Ltd. It changed its address to Level One, 13 Flushcombe Road, Blacktown, New South Wales, and that the relevant director was a Mr Clarence Marae. Dr Brown had been the director and shareholder of the company till that time. Exhibit 16 shows that Arundel through Mr Marae by application dated 7 March 2000 has taken an application to be struck off the register of the ASRC and has ‑ ‑ ‑
HIS HONOUR: To strike Nuradel as it had become?
MR SLATTERY: Nuradel, yes. Has made a declaration that the company has assets worth less than $1,000. So that answers in part of course my friend’s submissions in relation to “You have to pursue Arundel first and you have not shown that you cannot recover from Arundel” – part of his submission on that. In any event, the fact of the matter is that there has been a change of that company. We now understand that Arundel No 2 now operates the practice of Dr Brown but we also are aware of ‑ ‑ ‑
HIS HONOUR: Is this in your material? I do not want you to tell me things that are not ‑ ‑ ‑
MR SLATTERY: I will have to ask Dr Brown that material. I fully consent that that is not needed.
MR MORRIS: Your Honour, I am not sure I understand what is happening here. We are brought here as a respondent to a notice of motion. The notice of motion has not been read. My learned friend has not identified the material which he relies on in respect of the notice of motion. My learned friend now seems to want to argue bits of the case and say that he has got answers to various propositions in my outline. May I respectfully suggest that these proceedings be conducted in an orderly fashion by putting my learned friend to identify his material and giving us an opportunity to respond to it.
HIS HONOUR: I think Mr Slattery has already read his notice of motion. He had read it on the last occasion this matter was before me. But I adjourned that notice of motion today, so it has been read. He is only
responding to my questions. We have not got to the stage of dealing with the substance of his notice of motion yet because ‑ ‑ ‑
MR MORRIS: The difficulty, your Honour, is that ‑ ‑ ‑
HIS HONOUR: Let me finish.
MR MORRIS: My learned friend keeps throwing in bits of propaganda about his ‑ ‑ ‑
HIS HONOUR: You might have noticed I stopped that. I do not want to hear anything that is not in sworn evidence, and I think Mr Slattery immediately corrected that. But I take your point. Thank you, Mr Morris. Mr Slattery, I am only interested in what is in evidence. You have told me that there is evidence that Dr Mark Brown was a director and shareholder of Arundel until 31 January this year, is that correct?
MR SLATTERY: That is correct, your Honour.
HIS HONOUR: That is sworn material?
MR SLATTERY: Yes.
HIS HONOUR: You have also told me that the material shows that the company became Nuradel; that there has been an application to have Nuradel’s name struck off the register. Is there any evidence in relation to an Arundel No 2? There is no evidence?
MR SLATTERY: No, your Honour.
HIS HONOUR: I do not want to hear anything about that. We will deal, I think, with your subpoenas first. Why do you not call upon your subpoena, please?
MR SLATTERY: I call Dr Mark Brown in answer to a subpoena issued by the High Court.
MARK ELLMAN BROWN, sworn:
MR SLATTERY: Dr Brown, you appear at the Court today in answer to a subpoena issued by this Court dated 15 September 2000, is that correct?‑‑‑Yes, I will just get my subpoena. Yes, that appears to be correct, 15 September, yes.
I think that was served upon you on 19 September 2000?---Yes, I can’t remember. It was served on me though, that’s correct.
Can I ask you to go to the body of the subpoena, please. You will see there that the High Court has asked you to produce documents listed in a schedule?‑‑‑Yes.
Those documents are in six separate paragraphs?---Yes.
Did you read those paragraphs of the subpoena?---Yes, I did.
Have you gone to your records which are in your possession or power to ascertain whether there are any documents that matched the description of those documents?---I have.
Do you produce today to the Court documents which are described under the schedules, paragraphs 1 to 6 of the subpoena?---I do.
Do you have those documents with you?---I have them here with me.
How many documents are there?---I haven’t counted them. They’re sort of basically here.
In about four folders of material?---Yes.
Do you produce those documents to the Court in answer to the subpoena?‑‑‑I do, yes.
HIS HONOUR: Do you want them marked for identification?
MR SLATTERY: I would ask for them to be marked, thank you, your Honour.
HIS HONOUR: They will be a bundle of documents marked for identification A1.
MFI: MFI A1…..Bundle of documents
HIS HONOUR: Do you want access to those documents?
MR SLATTERY: Yes, your Honour. I would be seeking a short adjournment for the purpose of obtaining access to those documents to ask further questions of Dr Brown.
HIS HONOUR: Do you have any view about that, Mr Morris?
MR MORRIS: Again, your Honour, I do not understand the procedures. I thought Dr Brown was subpoenaed pursuant to a subpoena duces tecum to produce documents and he has done so. It now seems to be my learned friend’s intention to adduce some oral evidence. I have not heard any opening of what that oral evidence is going to be.
HIS HONOUR: Obviously he is not in a position to say, Mr Morris, simply because once a person is here, he can be called and sworn. If Mr Slattery wants to ask him some questions, he will become Mr Slattery’s witness.
MR MORRIS: Yes, it is a chamber matter and I would have expected him to require leave to do that, but no doubt he will be asking your Honour for such leave.
HIS HONOUR: Yes and no doubt I will be giving it to him too.
MR MORRIS: No doubt your Honour will listen to whatever submissions are put up before your Honour jumps to that conclusion.
HIS HONOUR: Of course, yes. At the moment he wants a short adjournment to consult the documents. Do you have any objection to that?
MR MORRIS: No, your Honour.
HIS HONOUR: No, and do you want access to the documents too?
MR MORRIS: Yes, your Honour.
HIS HONOUR: All right, well, I will grant a short adjournment. I will go back to my chambers, Mr Slattery, and make it as quick as you can and perhaps you can notify my chambers when you are ready, but Mr Morris may want to look at the documents as well.
MR MORRIS: Thank you, your Honour.
MR SLATTERY: Yes. How do we notify? Would your Honour’s associate be in the court?
HIS HONOUR: No, he will probably be with me. Do we have a security officer here? Yes, if you go to the Registry, Mr Slattery, or have somebody go to the Registry to tell me when you are ready.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: I will stand this matter down and I will deal with the next matter while this matter is stood down. Dr Brown you can leave the witness box, that is, you stay in the precincts of the Court.
THE WITNESS TEMPORARILY WITHDREW
AT 10.50 AM SHORT ADJOURNMENT
UPON RESUMING AT 11.52 AM:
HIS HONOUR: Yes, Mr Slattery.
MR SLATTERY: Thank you for that break, your Honour. We have had the opportunity to inspect the documents produced by Dr Brown – both sides, that is - and I would seek leave of your Honour to put questions to Dr Brown in relation to the contents of those documents.
HIS HONOUR: Yes.
MR SLATTERY: The topics generally are the relationship between Dr Brown, Arundel and the ITR. There was two relationships I am talking about there. The first is the relationship between the company, Arundel and the ITR, and the second is Dr Brown, personally, and the ITR.
HIS HONOUR: All right. Well, you do not have any interest in this aspect of the matter, do you, Mr Morris?
MR MORRIS: If the evidence is not being tendered against the ITR, I have no interest at all.
HIS HONOUR: And if it is?
MR MORRIS: And if it is I would object to it.
HIS HONOUR: Why?
MR MORRIS: In the general terms in which our learned friend has put it that he is going to ask about the relationship, if what is sought to adduce is evidence going to the questions that are raised in our learned friend’s outline that ITR, for example, profess to have expertise and formally advised and assist the parties in relation to the litigation, as they say, “It is the advice for assistance in relation to a case which is spurious and which has no chance of success” and so on. If it is focused on that issue then it is relevant. If it is going to go back over the whole history of when ITR was acting as, in effect, a tax agent, writing letters, raising matters which have no connection with the proceedings in this Court then it is entirely irrelevant.
HIS HONOUR: You can object if there is a question that you want to submit is irrelevant.
MR MORRIS: My difficulty is that your Honour invited my learned friend to identify the issues on which he wished to question the witness and he identified them in terms of broad generality but do not seem to have any bearing.
HIS HONOUR: All right. Thank you. It is probably better if we proceed question by question, Mr Morris. Yes, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
MARK ELLMAN BROWN, recalled:
MR SLATTERY: Dr Brown, amongst the documents that you have provided to the Court on the subpoena ‑ ‑ ‑
HIS HONOUR: Do we need to have Dr Brown identify precisely who he is and what he is?
MR SLATTERY: Yes, I am sorry, your Honour.
Dr Brown, I think you are currently a chiropractic practitioner?---That’s correct.
For how long have you been so practising?---Since 1986. I think it was 1986.
And I think that you also ‑ ‑ ‑
HIS HONOUR: Well, you were a director, is that correct ‑ ‑ ‑?---That is correct.
‑ ‑ ‑ of Arundel, the company Arundel, until 31 January this year, is that right, a director shareholder?---On about 1 or 2 February, the actual - - -
All right. Well, that is all you need for the identification.
MR SLATTERY: Well, what I want to do, Dr Brown, is to show you some documentation that you produced and I show you a document entitled “Consultancy and research”. If I can I approach the witness, your Honour.
HIS HONOUR: No, give it to my associate. Do you want to take it to ‑ ‑ ‑
MR SLATTERY: I probably need to be there with him.
HIS HONOUR: All right, well, you may approach him.
MR SLATTERY: Thank you, your Honour.
And, Dr Brown, if you can just identify that agreement as being a consultancy and research agreement, number 00L219?---Yes, that’s correct.
And the date of the agreement?---The date. It is 9 January 1999.
If you go to the next page there are a series of signatures? Do you identify your signature on that page?---That’s correct.
And there is a signature above it next to the name, “The Institute”?---Yes.
And there is a signature in green?---Yes, that is correct.
Do you know whose signature is?---I have no idea.
And the further signature next to that?---I have no idea. I cannot read it.
Thank you. But that is a document that you received from the Institute of Taxation Research, is it?---That’s correct.
And is that the document which commenced the relationship between Arundel, the company, and the Institute of Taxation Research?---Yes, as a formal client sort of thing, in a sense, for provision of information and to act as an agent, sort of in liaison with the Tax Department on tax matters.
Thank you. And, if I can draw your attention, please, to paragraph 5 of that document on the first page? If you would just read that, not - to yourself for a minute, please?---I am sorry, which one is this?
I am sorry, the paragraph numbered 1. I am sorry, my eyes are not good?---“The Institute agrees with ‑ ‑ ‑
No, just read it to yourself?---I am sorry, okay. Okay.
Thank you. And, do you agree with me that under the terms of that clause a fee was to be paid to the Institute of Taxation Research?---That is ‑ ‑ ‑
MR MORRIS: Your Honour, the clause speaks for itself.
THE WITNESS: Yes.
HIS HONOUR: Yes, Mr Morris. I uphold that objection. It is objectionable because it is secondary evidence of the document. Do you want to tender the document?
MR SLATTERY: I want to tender the document, thank you, your Honour.
HIS HONOUR: All right. Show it to Mr Morris.
MR MORRIS: I have seen it, your Honour. I object to the tender. I do not mind your Honour seeing it for the purpose of considering the objection.
HIS HONOUR: All right. Just pass it up to me. You tell me what your objection is, Mr Morris.
MR MORRIS: I can put it in this way in a nutshell, your Honour. It is common ground that in a period of time from 9 March 1999 to 3 August 1999 the Institute acted on behalf of Arundel in various capacities. It wrote letters to the Commissioner and received correspondence.
HIS HONOUR: From 9 March until - - -?
MR MORRIS: From 9 March until 3 August, that is what the Commissioner’s material shows.
HIS HONOUR: All right.
MR MORRIS: The material issue in these proceedings is whether the Institute is responsible, as we anticipate our learned friends submit, for Arundel instituting proceedings in this Court. Their case is because the Institute caused or provided advice or did something in connection with Arundel’s decision to bring a motion in this Court we should pay the costs. This document has nothing to do with that issue.
HIS HONOUR: No, but it might be a step in that direction. If it does no more than what you say it does, it may not make it inadmissible but it may give it very little probative value.
MR MORRIS: Thank you, your Honour.
HIS HONOUR: Yes. I will look at that document and see whether I will receive it, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: Thank you. What was the clause to which you drew particular attention?
MR SLATTERY: The paragraph numbered 1 on page 1, your Honour.
The Institute is a body of persons involved in the gathering, collating and supplying of information…..Intelligence.
MR SLATTERY: He is my friend’s client, your Honour.
HIS HONOUR: I beg your pardon.
MR SLATTERY: My friend’s client.
MR MORRIS: I am not quite sure what that comment is supposed to mean, your Honour. It would be helpful if my learned friend confined himself to matters of evidence rather than commentary.
HIS HONOUR: I was speaking. I was speaking to him. I was really inviting a comment as to what intelligence might be in this context.
MR SLATTERY: Hence my comment, your Honour.
HIS HONOUR: Anyway, let me just read this quickly. Yes, I will receive that and it will be marked as an exhibit, AA.
EXHIBIT: Exhibit AA…..Consultancy and Research Agreement
No 00L219 dated 9 January 1999
HIS HONOUR: Yes, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
If you could just look again at exhibit AA please, Dr Brown. I have made reference already to paragraph 1 and you have read the contents of that and you will see there the last two pages of the document. Having regard to paragraph 1, do the last two pages of the documents indicate a fee paid by you to the Institute of Taxation Research?‑‑‑That’s correct.
Thank you.
HIS HONOUR: It seems to have been a fee for research. Is that right? That is what the document says.
MR SLATTERY: I want to develop that, your Honour.
HIS HONOUR: Yes, all right.
MR SLATTERY: Yes, and from the date of that contract, is it the case that the ITR acted on your behalf in relation to a demand made upon the company for payment of tax in the sum of approximately $8,000 for the 1998 financial year?‑‑‑That’s correct. They conducted liaisons with the Tax Department on my behalf.
And in particular did they prepare an affidavit pursuant to section 459G of the Corporations Law in objection to a notice of demand issued to Arundel Pty Limited?
MR MORRIS: I object, your Honour. That is proceedings in another court. We are here talking about the costs of the motion to this Court. I do not know why my learned friend does not get to the point and ask the witness whether ITR had anything to do with ‑ ‑ ‑
HIS HONOUR: No, wait a moment, Mr Slattery.
MR MORRIS: I will not take it any further, your Honour. I have made my objection.
HIS HONOUR: I am going to let Mr Slattery proceed because it may turn out to be relevant if it is a step in his proof, Mr Morris.
MR MORRIS: Certainly, your Honour.
HIS HONOUR: Yes, you go ahead, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
Sorry, do you have an answer to that question?‑‑‑Sorry, what was the question please?
HIS HONOUR: Was a document under section 459G of the Corporations Law prepared on your behalf by the ITA?‑‑‑I don’t recall any affidavit or document being prepared on my behalf by the ITR. I can’t recall actually so ‑ ‑ ‑
HIS HONOUR: Or on behalf of Arundel, I suppose?‑‑‑Has someone got a copy of the document in question?
MR SLATTERY: Excuse me a moment. I will get a copy out for you?‑‑‑When was this document supposed to have been presented to me, or ‑ ‑ ‑
MR MORRIS: I can assist my learned friends. It is exhibited to Mr Henry’s affidavit of 15 August 2000, exhibit MJCH-2.
MR SLATTERY: I am grateful to my friend.
HIS HONOUR: Thank you, Mr Morris.
MR SLATTERY: Could the witness be shown, please, the affidavit of Mr Henry of 15 August 2000?
HIS HONOUR: Can you go ahead with something else while that’s being ‑ ‑ ‑
MR MORRIS: Your Honour, we have an unmarked copy that can be produced to the witness.
HIS HONOUR: Well, why do we not do that? That just saves some trouble.
MR SLATTERY: Thank you. I am again grateful to my friend. Is that the affidavit or the exhibit?
MR MORRIS: That is the exhibit which is the affidavit.
MR SLATTERY: Thank you very much.
Dr Brown, you said, I think, a moment ago you were not sure of any affidavit that you might have sworn in those corporations proceedings?
MR MORRIS: No, he did not say that, your Honour. He said he did not recall any documents prepared by ITR.
HIS HONOUR: Yes, that is correct, Mr Slattery.
MR SLATTERY: Well, I will put the question again.
Dr Brown, could you look please at the affidavit before you?‑‑‑Yes, yes, I can see that.
And you will see, I think, your signature?‑‑‑That’s correct.
On each page of the affidavit?‑‑‑Yeah.
And the contents of the affidavit ‑ I beg your pardon. I withdraw that. You will see that the affidavit is filed on behalf of the company by Peter Brooke & Co, Solicitors?‑‑‑That’s correct.
And the question I was previously putting to you was that in the preparation of that affidavit and in the ongoing relationship of agency between you and ITR, did you give instructions for the preparation of that affidavit?
MR MORRIS: I object, your Honour. That was not the question put before. The question put before was whether this was prepared by ITR. It is misleading to suggest to the witness that that was the question put.
HIS HONOUR: Yes, that is right, Mr Slattery. You can ask another question if you want to and withdraw that one, but it was not a correct representation of your earlier question.
THE WITNESS: There were no affidavits prepared by ITR and the affidavits were submitted to me by Mr Brooke.
MR SLATTERY: Yes, thank you for that answer. Now, could you just listen to this question? Did you give instructions to Mr Brooke for the preparation of this affidavit?‑‑‑Not specifically. I basically had given my, you know, full confidence in Mr Brooke to handle my affairs and ‑ when this matter started to involve the courts. So any necessary documentation that was to be prepared, Mr Brook was doing that for me.
Could we just take it, perhaps, one small step at a time? You know the document was prepared?‑‑‑Yes.
You swore the document?‑‑‑Yeah.
And, as I understand your evidence, you did not give instructions to Mr Brooke specifically in relation to the contents of this affidavit?‑‑‑Not specifically in relation to the contents of that affidavit. In as far as the conduct of my affairs, however, you know, in court proceedings he did have my express instructions.
Well, we can come back to that. Who, to your knowledge, gave instructions to Mr Brooke – if you know this fact, gave instruction to Mr Brooke to prepare the contents of that affidavit?‑‑‑I don’t know.
Did you receive accounts from time to time from Mr Brooke in respect of professional services that he rendered to you and, in particular, in relation to the preparation of this affidavit?‑‑‑No, I did not.
I think at the time that – I will withdraw that question. I think you know, do you not, that the contents of the affidavit were the subject of a hearing before Justice Muir in the Supreme Court of Queensland?‑‑‑That’s correct, yeah.
And you know that the application to set aside the statutory demand failed?‑‑‑Yes.
And his Honour delivered judgment?‑‑‑Yeah.
HIS HONOUR: Should we mark that?
MR SLATTERY: Yes please, your Honour.
HIS HONOUR: I know that it is elsewhere but it might be convenient to have ‑ ‑ ‑
MR SLATTERY: Thank you, your Honour. I would ask that to be marked.
HIS HONOUR: All right. That will be exhibit AB.
EXHIBIT: Exhibit AB…..Affidavit of Dr M.E. Brown
MR SLATTERY: After the dismissal of the application, there existed then the application to wind up Arundel?‑‑‑Yes.
And you know of that?‑‑‑I know of that.
How did you learn of that?‑‑‑The application to wind up, I knew of that both from my discussions with Mr Brooke and also from my discussions with Mr Ian Henke of ITR.
HIS HONOUR: I did not catch that last name. Your discussions with whom?‑‑‑I think it ‑ ‑ ‑
MR MORRIS: Mr Ian Henke of ITR.
MR SLATTERY: And can you tell his Honour please, who Mr Henke is? It is H‑E‑N‑K‑E?‑‑‑He’s a director of ITR.
And is he a person that you had contact with from at least the time of exhibit AA, the contract with the ITR?‑‑‑I’ve had contact with Mr Henke for a long time on and off so, yeah, there may – yeah, there would’ve been contact with me with him. I was regularly, sort of, in liaison with him, very interested in how, you know, these matters were proceeding in the courts.
You knew from time to time that Mr Henke was communicating with the Australian Taxation Office concerning the matter of taxation payable by Arundel Pty Limited?‑‑‑Well, I didn’t know if he personally was in liaison with – but I understood a representative of ITR was in liaison with the Taxation Department.
When you say you understood a representative of ITR ‑ ‑ ‑?‑‑‑Well, I couldn’t – I was not informed as to who, you know, specifically was involved in negotiations or discussions with the Tax Department.
You were not consulted from time to time about what might be said to the Taxation Department?‑‑‑No.
And after the ‑ and, in particular, from the time of the date of exhibit AA, is it the case that you left the matters entirely to the Institute of Taxation Research Pty Limited to make contact with and liaise with the Australian Taxation Office in relation to the affairs of Arundel?‑‑‑That’s – yeah, you’re referring to the consultancy and research agreement?
Yes?‑‑‑Yes, that’s correct.
I want to come back then to the chronology if I can. I think it was the case that after ‑ you have already confirmed that there was then an application taken to wind up the company, Arundel?‑‑‑Yes.
And it is the case, is it not, that the company compromised the claim of the Deputy Commissioner of Taxation in relation to outstanding tax?‑‑‑I don’t understand what you’re meaning there.
Well, I will put it another way. It is the case, is it not, that the amount of outstanding tax demanded by the Deputy Commissioner of Taxation under its notice of demand was paid?‑‑‑That’s correct, yeah.
Including costs?‑‑‑Yes, that’s correct. Sorry, yeah.
And I think at that time, you have already identified on exhibit AB that the person acting for you – I beg your pardon, acting for your company was Mr Brooke?‑‑‑That’s correct.
Mr Brooke ceased to act, did he not, at that time and Mr Tavoularis – T‑A‑V‑O‑U‑L‑A‑R‑I‑S ‑ commence to act?‑‑‑Yeah, yeah. I think at the time Mr Brooke was out of the country but I can’t be sure.
When you became aware of the fact that the Commissioner for Taxation had taken an application to wind up the company, did you receive advice from the ITR about what you should do about that?---No. I received advice from my accountant as to it wasn’t looking good for the company, so he was the one who actually provided me with Mr Tavoularis to conduct liaisons with the Tax Department for the satisfaction of the debt owing.
HIS HONOUR: Was Mr Tavoularis a solicitor?---Yes, that is correct, your Honour.
Was he carrying on practice in place of Mr Brooke in Mr Brooke’s office?‑‑‑That’s correct.
But you do not know what arrangements there were between him and Mr Brooke about the practice?---No.
No, all right
MR SLATTERY: And did you give instructions to Mr Tavoularis in relation to the debt owed by the company?---Yes, I did.
Thank you. And the company paid the debt?---And the company paid the debt.
Do you know when the company paid the debt?---I cannot recall exactly; you should have that on your records. It was Jim Henry who we were liaising with and you would have the date of the appearance where the matter was dismissed and the cheques were paid.
I think that was 17 December, 1999, does that sound right?---That sounds pretty accurate, yes.
When did you receive the advice from your accountant that things did not look good and that you should pay the debt?---I can’t remember the exact date but it would have been after the application had been set aside - application to set aside the creditor’s petition had been dismissed, so, you know, concerned that the company would be put into liquidation if I did not satisfy the debt. There was no issue of not being able to pay the debt. It was more a situation of, you know, requesting proof of authority of the Tax Department to charge me with debt in the first place.
MR SLATTERY: If I told you that the first letter – I am looking now at the affidavit, your Honour, of 14 September 2000 sworn by Morris James Clifford Henry and, particularly, paragraph 4 of that affidavit –
If I said to you that the first occasion on which Tavoularis & Company made communication with the Australian Government Solicitor in relation to this matter was 21 October 1999, would that refresh your memory?---It could be, I really don’t know. I know at some stage that he was engaged and I do not have that sort of document in front of me.
Did you leave it to Mr Tavoularis to negotiate the discharge of that debt?---I did, but he was in liaison with me as well.
And, I think your memory is that by or about 17 December 1999 the matter had been resolved?---Exactly.
The debt paid?---The debt was paid.
And the winding-up application was dismissed?----Was dismissed.
Now, you are aware also, I think, of the existence of the proceedings, which are the subject of this application, namely the notice of motion. I just want to run through this history for you and see if – I am not looking at the affidavit of Morris James Clifford Henry, your Honour, of 19 January 2000, paragraph 5 and I read that affidavit and the other affidavit that I referred you to, dated 14 September 2000.
HIS HONOUR: You are just a little bit ahead of me, Mr Slattery.
MR SLATTERY: Yes, I am sorry.
HIS HONOUR: What was the first one you wanted me to look at?
MR SLATTERY: The affidavit of Mr Morris Henry of 14 September 2000.
HIS HONOUR: Yes, I have got that.
MR SLATTERY: I am now looking at the affidavit of Mr Henry of 19 January 2000.
HIS HONOUR: What did you want me to look at in the affidavit of 14 September 2000?
MR SLATTERY: If your Honour would just look at the – I have referred to paragraph 4, which sets out the history of the communications between Tavoularis & Company and the Australian Government Solicitor in relation to the resolution of the summons to wind up.
HIS HONOUR: Wayne Leveck & Associates, is there any evidence about who they are?
MR SLATTERY: Your Honour, as a matter of public record, Mr Leveck has been the subject of a cost order ‑ ‑ ‑
MR MORRIS: Your Honour, that is not evidence. Your Honour asked my learned friend what evidence there was. There is no evidence that has been read that identifies who Mr Leveck is or his firm.
HIS HONOUR: All right. Is there anything in any of the papers?
MR SLATTERY: Not in these papers. I do not think in these papers, your Honour, but I might be wrong, your Honour, I just stand corrected. Can I just perhaps take a minute to find that, your Honour?
HIS HONOUR: Who is your accountant, Dr Brown?---Mr Robin Houston.
What firm?---I think it is Houston & Company.
Well, it seems to be exhibited to that affidavit, Wayne Levick & Associates, MJCH, seven days a week, the solicitors with attitude.
MR SLATTERY: Is that the eighth exhibit to the affidavit of 15 August?
HIS HONOUR: I think it is the affidavit of 14 September, yes. It is MJCH-1 ‑ ‑ ‑
MR SLATTERY: Right, thank you, your Honour.
HIS HONOUR: - - - and their solicitors. As I was saying, solicitors with attitude. All right, and I have noticed what you wanted me to look at in that affidavit. Now the other affidavit you wanted me to look at, Mr Slattery, was the one of 19 September, was it?
MR SLATTERY: 19 January, your Honour.
HIS HONOUR: 19 January.
MR MORRIS: Before we go on, your Honour, I am not aware of being served with any affidavit of 14 September 2000. I did suggest, with the utmost respect, at the outset of these proceedings, that my learned friend should identify the material that he relies on. He has just mentioned two affidavits. We do have the 19 January affidavit; we do not have the 14 September affidavit.
HIS HONOUR: Well, I think perhaps I should have asked you - I think Mr Morris is correct, I think I should have asked you, it is my fault, to read the material upon which you rely.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: There is such a lot of it. It might be more; it might be more handy or more convenient if you can provide a list, although I do not want to see Mr Morris inconvenienced. Do you have a written list anywhere of the material that has been filed and that you want to read and rely upon?
MR SLATTERY A written list of material filed, no, your Honour. I asked actually for a copy of the front covers of your Honour’s folders so that we could ‑ ‑ ‑
HIS HONOUR: Yes. There seems to be – you tell me if this is correct and this is what you want to rely upon. The notice of motion, I think, was of 15 August; an affidavit of Mr Henry was exhibits 1 to 19 of the same date. Do you have those, Mr Morris?
MR MORRIS: Yes, indeed, thank you, your Honour.
HIS HONOUR: There is another affidavit of Mr Henry with only one annexure of 8 September, and then there is a further affidavit of the same date, of, it looks like Angelina - - -
MR SLATTERY N…., I think; it is an affidavit of service.
HIS HONOUR: Is that the name? It does not look like that. Can you spell that for me.
MR SLATTERY Is this of 19th?
HIS HONOUR: No, this is the 8th.
MR SLATTERY: Ngete Uphan.
HIS HONOUR: Yes, well that is one folder of documents. Mr Associate, do we have any others with a front sheet, telling us what has been filed? You seem to have exhausted the Registry with that.
MR SLATTERY: I am sorry, your Honour. Over the luncheon adjournment what we will do is present a list of affidavits which - - -
HIS HONOUR: So long as that is not inconvenient to Mr Morris, that is the only thing that concerns me.
MR MORRIS: I am happy for the examination to continue.
HIS HONOUR: All right, thank you, Mr Morris.
MR SLATTERY: Just so that my friend is not prejudiced, I can provide him now with a photocopy of the affidavit of 14 September.
HIS HONOUR: All right, thank you. Now that is the one I just referred to, was it not? It does not seem to establish very much at the moment. That merely tells us that Wayne Levick & Associates, Solicitors - your affidavit tells us that that was Arundel’s registered office at one stage.
MR SLATTERY: Yes, that is right.
HIS HONOUR: All right. Now the next affidavit that you wanted me to look at, Mr Slattery, what date was that?
MR SLATTERY: 19 January, your Honour.
HIS HONOUR: 19 January.
MR MORRIS: Your Honour, having now seen this affidavit of 14 September, I have to say I realise I have been objecting a lot, but I certainly do object to this. It seems to be an affidavit showing that Arundel changed its registered office to an address at Blacktown, that Wayne Leveck & Associates conducts business at the address at Blacktown, that they have a web site and that their web site then has a link with my client’s web site. It is the most bizarrely tenuous connection to say that, because Arundel changed its registered office to Mr Leveck’s office, because Mr Leveck keeps a web site and because, amongst the links on his web site, as I am sure your Honour knows, there is no proprietary right in links on a web site. One can have a link to the Olympic Games web site or to the Encyclopaedia Brittanica web site.
HIS HONOUR: But you also know that proof sometimes precedes incrementally, Mr Morris. Your point may well be good at this point, but I would not reject it at the moment and if what you are saying is right, without more it does not establish anything, but we will see where we are going.
MR MORRIS: We do seem to be scatching around in the dirt for something.
HIS HONOUR: Well, we will find out. I am sure Mr Slattery ‑ ‑ ‑
MR SLATTERY: My friend can use whatever interpretative remarks he might want to make, your Honour, but - - -
HIS HONOUR: Well, we will not have any exchanges of remarks at the Bar table.
MR SLATTERY: I take no notice of them, your Honour, thank you.
HIS HONOUR: We will just have submissions and evidence and questions.
MR SLATTERY: Your Honour, I will address you on the content of affidavit going to the question.
HIS HONOUR: I am not rejecting it, Mr Slattery. I have received it. There is no problem about receiving it at this stage.
MR SLATTERY: Thank you.
HIS HONOUR: But you were going to tell me - - -?
MR SLATTERY: I am at the affidavit of 19 January 2000.
HIS HONOUR: Yes, well that is the one we are having trouble finding – 19 January. Do you have a copy of it by any chance? Do you have it, Mr Morris.
MR MORRIS: Yes, I have that one. I think your Honour might have mentioned that as being in the first file that your Honour had from the Registry.
HIS HONOUR: I do, in fact, you are quite right. Well, it says it is here. 19 January. Can you proceed while we are extracting - - -
HIS HONOUR: Can you proceed while we are extracting ‑ ‑ ‑
MR SLATTERY:
Yes, I can, your Honour, thank you.
I just want to take you through the later chronology in relation to the commencement of the notice of motion. You are aware of the commencement of the notice of motion?---Yes, I was.
I think that that notice of motion was dated 14 October 1999?---I assume that is correct, yes.
And that is a notice of motion which is lodged in this Court prepared by Peter Brooke & Company?---That’s correct.
That was at the time, I think you have said, that you were instructing Tavoularis & Company to act on your behalf in relation to the winding-up petition?---I think – I can’t remember exactly, but I think I instructed Tavoularis & Company after that notice of motion had been issued.
Now, could the witness please be shown a copy of the notice of motion?
HIS HONOUR: Yes, look at the notice of motion, Dr Brown.
MR SLATTERY: Yes. Your Honour will see that it is dated 14 October 1999. It was, in fact, I think, lodged on 25 October 1999. There may be a mistake in relation to – or a difference in relation to dates?---Sorry, I was thinking we were talking about the notice of motion removing the application to have the creditor’s petition – sorry, the application to have the company wound up – that application removed to the High Court. I thought that was what we were talking about.
That is the application we are talking about?---I am not sure that that is what was provided by the associate.
No, I have a later one. Mr Associate, could you provide these to the‑‑‑?‑‑‑The one I’ve got is the notice of motion by the ATO, the respondent.
HIS HONOUR: The one that has been just shown to me is 14 October. I think we have it, Mr Slattery.
MR SLATTERY: Perhaps we could use a working copy if it makes it easier.
HIS HONOUR: Certainly. It is the notice of motion that you were just talking about, I think, Dr Brown, to move the proceedings into this Court. Is that right?---Yes, correct, your Honour.
All right. Yes, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
Did you give instructions to your solicitors to prepare this document?‑‑‑Yes, he had instructions from me to take whatever steps were deemed pertinent and he told me about the issue of the notice of motion. I said, “Well, if you think that’s going to apply, then for sure”. I trusted Peter Brooke implicitly. He has been my friend for a long time.
You left it to Mr Brooke, did you, to draw the contents of this notice of motion?---That is correct. At the time I am, you know, busily engaged as a chiropractor. I don’t have time to, you know, conduct work as a solicitor as well.
At the time that you gave instructions for this to be prepared, did you have a conversation with Mr Henke about the contents of this document?---No, not at all. But I was, to be honest, I was aware that Mr Brooke was, you know, in liaison with the ITR as well.
How did you know that?---I introduced ‑ ‑ ‑
MR MORRIS: I object ‑ ‑ ‑
HIS HONOUR: Wait a moment. What do you say about that?
MR SLATTERY: Perhaps I might ask a preparatory question to that so that the link is clear to my friend.
HIS HONOUR: I can admit hearsay evidence under the Evidence Act, can I not?
MR MORRIS: Yes, your Honour has a discretion in that regard but this is being adduced by the ATO against my client. This witness is not my client. This is Arundel’s witness.
HIS HONOUR: Whatever view one might have of those extraordinarily expansive provisions in the Commonwealth Evidence Act, they seem to repose a very, very broad discretion in a trial judge to receive hearsay evidence. No matter how reluctant experienced practitioners such as yourself or I might be to do that, we are bound by the Act.
MR MORRIS: And it is, with respect, the very breadth of those provisions that requires they be exercised with the greatest judicial discretion. What is being sought by the ATO here, is to rely on this witness’s understanding of communications between a second party and a third party.
HIS HONOUR: Well, look, I will reject the question at this stage and we will see how we go. I mean, I think I should reject the question at least unless and until you can demonstrate that this is not accessible original evidence or that there is not original evidence available to prove what you want to prove. I have to tell you that my own experience of hearsay evidence, when I was in practice, if ever I let it in on a matter of any importance, I always found out later it was totally unreliable. I really think that the reason why hearsay evidence is rejected is not simply because people cannot cross-examine on it, but because it is inherently unreliable on important matters.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: But you proceed.
MR SLATTERY: Thank you.
Dr Brown, I just want to ask you a couple of other questions in relation to your relationship with the ITR, as way of background for his Honour. The document which is exhibit AA was a document whereby you became a client of the ITR. That is correct, is it not?---That’s correct, yes.
But you had another relationship with the ITR, did you not?---That’s correct.
You were an agent of the ITR.---That is true.
What did that mean?---That meant that I could refer clients through to the ITR to have them represented and be paid a fee, a commission for referring people through.
I think that fee was about 18 per cent, was it, of the net gain to the ITR from having that person referred to it?---Yes, it could be around about that or 15 per cent, 18 per cent, something like that.
And I think throughout 1999 you were paid fees, were you not?---That’s correct.
Do you know how much you were paid?---Not exactly. It would have been probably in the order of about 12,000, something like that.
And that is in respect of people you introduced to the ITR?---That’s correct.
In that period, you were the person responsible for those clients being introduced to the ITR, were you not?---Yes.
In that period as well, you were having contact, as you have said, with Mr Ian Henke, both in relation to your own matters and in relation to the clients that you introduced to the ITR?---Not so much in relation to clients that I referred through to the ITR. Once those clients were, you know, had become clients of ITR, one ceased to have any further dealings with – you know, the ITR then would engage in their own sort of relationship with the client.
In the same fashion as happened to Arundel?---That’s correct.
And you left it to the ITR?---That’s correct.
Both in respect of yourself and in respect of the clients you introduced?‑‑‑That’s correct.
How often did you have contact from Mr Henke?---Sometimes I would speak to Mr Henke, you know, weekly, sometimes, you know, maybe monthly. I was in liaison with Mr Henke a long time before the ITR was actually formed, you know. I was very interested in the research that they had been conducting.
HIS HONOUR: Is the ITR incorporated? Is it a legal personality ‑ ‑ ‑
MR SLATTERY: It is a body corporate, your Honour.
HIS HONOUR: A body corporate. What is its ‑ ‑ ‑
MR MORRIS: A proprietary limited company, your Honour.
HIS HONOUR: Sorry, Mr Slattery.
MR SLATTERY: And in the period from October 1999 through to January 2000, how often did you have contact from Mr Henke?---To be honest, I just couldn’t say. I have had some discussions with him over that time, that would be true to say, but I really couldn’t say how many conversations or how frequent they were.
Because at that time you had two reasons to have discussions, did you not? You had the fact of the winding-up petition or summons against the company – that was the first reason?---Yes, go on.
And the second reason was the notice of motion to the High Court in relation to the issues before the Court in the winding-up summons?---Sorry, what were those ones again – the first one?
The first one was the winding-up summons – correct?---Yes.
On which you instructed Tavoularis & Co, solicitors?---To negotiate a settlement, yes, that is correct.
And the second reason, and I take it that you discussed those matters with Mr Henke?---He was aware that I was arranging to settle the matter, yes.
And when did you tell him that?---I can’t recall. It would have been round about that time but I don’t have an exact recollection of the date or anything like that.
Right. Well, we know that the first letter of offer that came from Tavoularis & Co was about 21 October 1999. Would it be at that time?---Probably round about that time, yes.
That is after the time that the notice of motion was issued?---Yes.
That is right, is it not? So, you would have had two reasons to talk to Mr Henke; the first relating to getting out of, or getting the company out of the possibility of being wound up, and you discussed those matters with him?---Yes, I would have discussed them.
And he, under the terms of your contract with you, obviously consented to the fact that the debt of the Taxation Department be paid?---No, he had nothing to do with that. That was my own sort of negotiations with the Tax Department.
No, that is not what I asked you. Just listen to my question. Having regard to the terms of the contract between you and the ITR, which is shown in exhibit AA, the ITR had a material interest in whether you saved tax or not, did it not? That is, it would potentially obtain 15 per cent as a commission for the tax saved if you were successful in defending the claim of the Deputy Commissioner of Taxation?---Yes, but that was not sort of discussed at the time. That sort of issue wasn’t even raised.
I am not asking you whether that was discussed.
MR MORRIS: That is exactly what my learned friend asked. My learned friend put it to the witness that he had a discussion with Mr Henke because ‑ ‑ ‑
THE WITNESS: There was never discussion about the Commissioner or anything like that.
HIS HONOUR: Wait a moment, Dr Brown.
MR SLATTERY: Your Honour, my question is directed to the fact of a discussion concerning ‑ ‑ ‑
HIS HONOUR: Put your question again. Please, I do not want any commentary behind, thank you. You put your question again, Mr Slattery.
MR SLATTERY: I referred you to exhibit AA and you confirmed to his Honour, as is plain on the face of that document, that the Institute of Taxation Research has a clear monetary interest in whether or not you succeed, through them, in avoiding paying tax?---That would appear, on the face of it, on that document. However, there was never any sort of discussion of, you know, commissions that would be payable to ITR or I sort of was – I mean, that may have been the case but, you know, I was more, like, on it as a personal friend basis with the ITR rather than just a standard client relationship.
But you paid the $2,000, did you not?---I paid the 2,000, that is correct, yes.
So it was more than just a personal friend?---No, well, what I am getting at is there were never discussions about, you know, the ramifications fee wise for ITR, of me settling the matter for the Tax Department.
That is the point we want to get to now and that is, when you settled the matter, I think you have said that Mr Henke knew about the fact that you were settling the claim of the Deputy Commissioner of Taxation?---Yes, he did.
And that occurred by 17 December but started about 21 October 1999?‑‑‑That is correct.
And he knew of all of those things in that period, and it is as likely as not, is it not, that you discussed those matters with him at least before 21 October 1999 and after Justice Muir’s decision?---Can you just go through that again?
Yes. It is likely, is it not, that you discussed with Mr Henke the fact of your decision to pay the tax and not have the company wound up at least prior to 21 October 1999 and after the decision of Justice Muir?
MR MORRIS: I object to that question, your Honour. There is, within the question, the implication that the witness had decided to pay the tax as at 21 October. We do not know whether that is the case. The only evidence so far is that as at 21 October he had decided to engage solicitors to negotiate with the Tax Department, not that he had decided to make any payment.
HIS HONOUR: And one of the problems might be that it is really cross-examination, in a sense.
MR MORRIS: Exactly.
HIS HONOUR: Yes, I reject that question.
MR SLATTERY: Your Honour, my friend is incorrect in his submission. I really must correct that, because ‑ ‑ ‑
HIS HONOUR: I am rejecting it because you are cross-examining the witness.
MR SLATTERY: Yes. I accept your Honour’s ruling on that but I think if the matter is incorrect, I should correct it.
HIS HONOUR: No, just put another question. Let us get on with it.
MR SLATTERY: Did you discuss with Mr Henke, between 21 October ‑ ‑ ‑
HIS HONOUR: Mobile telephones are not permitted in the Court. Whoever has that, please leave the Court and stay out of it with a telephone. If you want to bring a telephone in, you cannot come into this Court.
MR : I do apologise, your Honour.
HIS HONOUR: Yes, all right, well, leave the Court please. You can come back at any time but do not bring an alive telephone in, please.
Sorry, Mr Slattery, for that interruption. You go ahead.
MR SLATTERY: I am looking at paragraph 7 of the affidavit of Mr Henry of 19 January, and that discloses that Justice Muir brought down his decision on 4 August 1999.
HIS HONOUR: Yes.
MR SLATTERY: All right. Do you have a recollection of that day?‑‑‑That was – yes, okay. That was – which one was that? That was the application ‑ ‑ ‑
That was on the application ‑ ‑ ‑?‑‑‑To set aside ‑ ‑ ‑
‑ ‑ ‑ your application to set aside the notice of demand, your company’s application. All right?‑‑‑All right.
We have identified that the notice of motion to this Court was dated 14 October 1999 but I think filed on 25 October 1999 and we are now going to the topic of the discussions that you had with Mr Henke concerning the fact that on 21 October 1999 the first letter came from Tavoularis & Company, the company’s solicitors, which is the – which sets out an offer of settlement to the Deputy Commissioner of Taxation through its solicitors, the Australian Government Solicitor?‑‑‑Yes. I don’t have that document in front of me but I assume that’s correct.
If I could show the witness, please, a copy of the affidavit of Morris James Clifford Henry of 14 September 2000 and I am drawing his attention to MJCH1 to that affidavit.
MR MORRIS: Your Honour, exhibit MJCH-1 to the affidavit of Mr Henry of 14 September 2000, which my learned friend handed up to me at 12.25 pm, is Mr Leveck’s web site, the solicitors with attitude. If there is another affidavit of the same date, 14 September, I would like to have that.
MR SLATTERY: There are two affidavits of that date, your Honour. My friend might be confused ‑ ‑ ‑
MR MORRIS: Well, can we have the other one, please.
HIS HONOUR: Please, no exchanges at the Bar table. Yes, Mr Slattery, you go ahead.
MR MORRIS: Well, I object to the question.
HIS HONOUR: No, no, please, Mr Slattery, is there another affidavit of that date?
MR SLATTERY: There are two affidavits of that date.
HIS HONOUR: Have you provided Mr Morris with a copy of those?
MR SLATTERY: Yes, we have, your Honour.
HIS HONOUR: With both of them?
MR SLATTERY: Yes, your Honour. I can give to my friend a copy of the affidavit so that he is not in any way embarrassed.
HIS HONOUR: Yes, Mr Morris.
MR MORRIS: Your Honour, I have been handed only one affidavit of 14 September and, as I noted at the time, in case any disagreement of this nature arose, provided at Bar table 28/9/2000 12.25 pm. That is all I have got from 14 September.
HIS HONOUR: All right, thank you. Mr Slattery, do you say that you have provided a copy of the second affidavit, the other affidavit, of that date to the ITR or to Mr Morris?
MR SLATTERY: Not directly to Mr Morris but those instructing him. Can I just take a moment, your Honour?
HIS HONOUR: Yes, certainly, Mr Slattery.
MR SLATTERY: Thank you.
HIS HONOUR: Your instructing solicitor has not got a copy of that, Mr Morris?
MR MORRIS: No, as I understand, no.
HIS HONOUR: Yes, Mr Slattery.
MR SLATTERY: We were alerted these problems may occur and we have filed affidavits of service.
HIS HONOUR: Yes.
MR SLATTERY: Your Honour, I have in Court an affidavit of – this has not been filed because of time constrictions.
HIS HONOUR: You want leave to file it ‑ ‑ ‑
MR SLATTERY: I seek leave to file it because – and I will show my friend. It is an affidavit of Alan William Beggs.
MR MORRIS: I am sorry, may I have a look at it?
MR SLATTERY: Yes. I just want to tell his Honour what it is.
HIS HONOUR: You tell me what it is first, Mr Slattery.
MR SLATTERY: Thank you, your Honour. It is an affidavit of Alan William Beggs sworn 26 September in which he says that on 26 September he served the Institute of Taxation Research with copies of affidavits of Morris James Clifford Henry of 14 September 2000. There are two of those and other affidavits.
HIS HONOUR: What date did he serve them, Mr Slattery?
MR SLATTERY: 26 September, your Honour.
HIS HONOUR: Yes, all right.
MR SLATTERY: Thank you. I show my friend that affidavit.
HIS HONOUR: Mr Morris, have a look at that affidavit, please.
MR MORRIS: Thank you, your Honour. Yes, Mr Beggs says that he handed them to someone who called him Zoltan in Victoria two days ago. I have not seen them and my instructing solicitor has not seen them.
HIS HONOUR: In any event, I will receive that affidavit.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: And I am going to allow you to proceed on the basis that that affidavit has been served or that material has been served, Mr Slattery.
MR SLATTERY: Thank you.
MR MORRIS: Your Honour, may we have a copy?
HIS HONOUR: Of this affidavit?
MR MORRIS: Of this affidavit that I have not seen and my instructing solicitor has not seen and my junior has not seen.
HIS HONOUR: Well, that may be the fault of your client but, yes. Can you provide Mr Morris with a copy of it?
MR SLATTERY: I have just provided it, your Honour.
HIS HONOUR: You proceed, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
MR MORRIS: Might I add, your Honour, Mr Sockhill is on the record. The way to serve affidavits is to send it to the solicitor, not to serve on someone called Zoltan at a registered office in Victoria.
MR SLATTERY: I have to join issue with my friend. We understand Rea & Sockhill, the firm is on the record for Nuradel Pty Limited, the new name of the old Arundel Pty Limited.
HIS HONOUR: But not for ITR?
MR SLATTERY: Not for ITR, no. We have never received any notice – in fact, we had a notice – so specific is it, we have a notice of acting in relation to that company dated 13 September 2000.
HIS HONOUR: All right. Well, Mr Morris, Mr Sockhill apparently is not on the record for ITR.
MR MORRIS: No. It is probably because there is no record. I accept that, your Honour. There is no process in this Court for filing an entry of appearance to a notice of motion against a non‑party.
HIS HONOUR: Well, Mr Slattery is perfectly correct then.
MR MORRIS: He is correct in that sense.
HIS HONOUR: It is duly served, and you proceed, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: Just for the other matter. How much longer do you think you will be, Mr Slattery?
MR SLATTERY: At least half an hour, your Honour.
HIS HONOUR: Half an hour. What about you, Mr Morris?
MR MORRIS: I should think only half an hour in cross‑examination, your Honour.
HIS HONOUR: You think you might be as much as half an hour?
MR MORRIS: I might be, yes.
HIS HONOUR: And then are there any other witnesses likely whom you might wish to examine or call?
MR SLATTERY: There is the subpoena directed to the ITR, your Honour, and the answer to that subpoena.
HIS HONOUR: Yes.
MR SLATTERY: And we are told that having issued the subpoena to the proper officer an office manager is here and we do not know what her position is in the company. We would not accede to the suggestion that that is a proper answer to the subpoena. In any event, that is another matter for your Honour.
HIS HONOUR: Right. And submissions?
MR SLATTERY: We have filed written submissions and we will be relying substantially on those. My friend has filed detailed written submissions as well. I will only be speaking briefly to those. I do not think I will be more than 15 minutes to half an hour.
HIS HONOUR: Right. Is Mr Drysdale in Court? Mr Associate, would you look to see whether Mr Drysdale is outside.
THE ASSOCIATE: Yes.
MR SLATTERY: Your Honour, there has even ‑ ‑ ‑
HIS HONOUR: I am minded to adjourn at 1.00 but to resume at quarter to 2. Is that convenient to you people?
MR SLATTERY: I am happy with that, your Honour. Can I just have an indulgence in respect of getting that list to your Honour. Typists just do not work that fast, I do not think, so that ‑ ‑ ‑
HIS HONOUR: Do the best you can.
MR SLATTERY: We will do the best we can, your Honour.
HIS HONOUR: That can be put in hand now, can it not? Can not somebody start on that now?
MR SLATTERY: Yes. Yes, and I would ask for that to be ‑ ‑ ‑
HIS HONOUR: All right, thank you.
MR SLATTERY: Thank you.
HIS HONOUR: Yes. Well, you go ahead, Mr Slattery.
MR SLATTERY: Can I also, just to finish off the point my friend made in relation to service, tell your Honour that your Honour’s file should disclose ‑ ‑ ‑
HIS HONOUR: You go ahead.
MR SLATTERY: Your Honour, I am sorry, you will need to get it from the file. That was an affidavit filed of Ronald Ian Braby which discloses that on 26 September – can I hand up my copy to your Honour because your Honour is not going to be able to find it out of your file. Would your Honour just read that affidavit?
HIS HONOUR: Has Mr Morris a copy of that one?
MR MORRIS: No.
HIS HONOUR: Would you show Mr Morris a copy of that?
MR SLATTERY: Yes, I will. I will just get my copy out of my brief. I will hand a copy to my friend.
HIS HONOUR: These are documents that were served on Arundel, were they?
MR SLATTERY: Of Rea & Sockhill, your Honour. The firm of solicitors Rea & Sockhill. Mr Sockhill is in the Court today, I understand.
HIS HONOUR: It says here, “I did on the 26th day of September 2000 serve the above‑named applicant with copies of the following documents”. Yes, I see, by delivering them to Rea & Sockhill, yes.
MR SLATTERY: Yes, your Honour. So that we would join issue twice with the submissions of my friend.
MR MORRIS: That does not seem to make any – I will leave it, your Honour.
HIS HONOUR: Over the page.
MR MORRIS: Yes.
MR SLATTERY: My friend has got no point - - -
HIS HONOUR: Over the page, Mr Morris. I did not read over myself at first, Mr Slattery.
MR SLATTERY: Yes, I am sorry. It is clumsily expressed but I think it is clear once you read the whole paragraph.
HIS HONOUR: Yes, it is. It is.
MR SLATTERY: Thank you.
HIS HONOUR: So you say that ‑ ‑ ‑
MR SLATTERY: Not only but also, your Honour ‑ ‑ ‑
HIS HONOUR: ‑ ‑ ‑ all the relevant material has, in fact, been served on Rea & Sockhill.
MR SLATTERY: Yes. We have gone to great pains in this matter, your Honour, anticipating these problems, to serve ITR and solicitors.
HIS HONOUR: Yes.
MR SLATTERY: Thank you.
HIS HONOUR: Thank you. You proceed then, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
Now, I am sorry, Dr Brown, but I am going to have to sort of gather my own thoughts a bit. We were speaking of the fact that the notice of motion for removal of the action occurred dated 14 October but not filed until 25 October?‑‑‑Right, okay.
And we were also ‑ I was also asking you questions concerning your discussions with Mr Henke about that fact. Correct?‑‑‑Yes.
And I think you were giving evidence as to what discussions you had with Mr Henke concerning (a) the compromise of the debt under the summons to wind up the company and, secondly, the commencement of the notice of motion for removal to this Court. Correct. Can you tell his Honour, please, what discussions you had with Mr Henke in the period from 4 August 1999, that is, the date of the judgment of Justice Muir, to 21 October 1999, being the date of the first letter from Tavoularis & Co proposing settlement of the winding‑up summons?‑‑‑I can’t, you know, accurately give evidence on, you know, exactly what was said in those conversations. I don’t have any notes of them at all. I know I would have discussed them, you know, with Mr Henke, you know, what was going on in my particular matter because I was, you know, upset at the time. I’m sort of a bit – I must confess, a bit confused with the chronology. My understanding of the chronology, which may be incorrect, was that the notice of motion was issued or filed before I started negotiations with Robert Tavoularis with the ATO.
Accepting that for the moment as your memory, I think you have been shown a copy of the notice of motion – sorry, was there another answer you wanted to give to his Honour?---It doesn’t matter, it’s all right.
If there is, please do so.---It’s okay.
Is there a point that you want to clarify?---I’m just losing track of my thoughts at the moment.
I think you have been shown a copy of the notice of motion for removal into the Court and I think you said that Mr Brooke, as far as you knew, drew this document?---That’s correct.
Did you pay any fees to Mr Brooke in relation to this matter?---No, I didn’t.
Do you know who paid his fees?---No, I don’t, if he had any fees paid.
You do not know that?---Don’t know that.
Did you discuss with Mr Henke the contents of the notice of motion?---I may have, because I was quite interested in the academics of what has been going on through the courts up to that point in time. I’d left the sole authority, though, with my solicitor Mr Peter Brooke, as far as the actual ultimate formulation of any notice of motion, but he would have been in liaison with ITR.
You cannot say that to my friend ‑ ‑ ‑?---Well, I assume he ‑ ‑ ‑
No, do not say that even. All right, I just want to ask you some more questions about it. You said you had some discussions with Mr Henke about the contents of the notice of motion. What did he tell you about its contents?---To actually try and comment on that would be inaccurate on my part because I don’t recall exactly and I don’t want to say something that I do not have an accurate recall of and to say the wrong thing.
Fine, thank you. No, I do not ask you to do that and I do not ask you to guess. But can you ‑ ‑ ‑?---If I could specifically remember I would answer, but I don’t.
If you cannot specifically remember, and I think that is what you are saying to his Honour?---Yes.
Do you recall the substance of the conversations that you had with Mr Henke about the contents of the notice of motion?---Maybe not specifically about the notice of motion, more specifically about information that they were continually getting through, new things that hadn’t been dealt with by the courts before, like the interregnum, the act of succession of 1701 and how the Queen became a statutory monarch and didn’t have power to assent to bills, things like this that, on my understanding, had not been presented to the courts before.
Did he say to you anything concerning the information he might have been supplying to Mr Brooke?---No, I knew that Mr Brooke would have some liaison as far as information with Mr Henke, but, once again, I had allowed Mr Brooke his full discretion as to what information he would derive from whatever source, and if he was not happy with any information he got, say, from ITR, then he would not use it.
Therefore, do I take it that you understood that Mr Brooke was receiving information from ITR?---And other sources, I am sure, but I introduced Mr Brooke to ITR, so that’s how I know that he was associated with them.
So that, do I take it, you understood that the content of the notice of motion was material that had come, either wholly or in part, from the ITR?---That is correct.
Thank you?---They were employed by me to provide intelligence, research information and that sort of thing. So, on my understanding, there was no problem with Mr Brooke being privy to information that ITR had gleaned.
Is that a convenient time, your Honour?
HIS HONOUR: Yes, I mean it always intrigues me, Mr Morris. Your client says that the government is not validly elected and, therefore, the judiciary is not duly constituted. That is part of the assertion or one of the assertions that is made, is it not?
MR MORRIS: As I understand it. Perhaps ‑ ‑ ‑
HIS HONOUR: Why do they tell people to apply to me and to the High Court, then, if I cannot do anything?
MR MORRIS: We are not, your Honour, we are responding to an application.
HIS HONOUR: But your client was urging applications to this Court.
MR MORRIS: Well, your Honour, the issue in this case is whether or not that happened, and ‑ ‑ ‑
HIS HONOUR: I know that, in this case, but the material that is disseminated – there does not seem to be any doubt about that, it is proved – your client was disseminating material the effect of which was that I was not a High Court Judge at all.
MR MORRIS: Yes.
HIS HONOUR: Yet, at the same time, it was apparently disseminating material suggesting that there be appeals or applications to the High Court.
MR MORRIS: Your Honour, I do not pretend to be at an intellectual level which is capable to grasp the entire implications of it, but, as best I understand it, the proposition is this: that there is, as it were, a de facto judicial system in this country and whilst that de facto judicial system continues to purport to enforce the law, then taxpayers ‑ ‑ ‑
HIS HONOUR: Really, it is no laughing matter. I mean, no matter what the outcome of this case might be, the material that is being disseminated is utterly worthless and bizarre and it is very sad that people might be paying money for such information which can only end up costing them, if they act upon it, a great deal of money and a great deal of pain.
MR MORRIS: Your Honour, whilst I do not have instructions which would allow me to concede anything that your Honour has said, your Honour will not hear a word from me resisting the assertions your Honour has just made.
HIS HONOUR: It really is very sad if people are paying for this, because a number of Judges of this Court have now said that it is utterly worthless and it is very sad that they are wasting their money on it. In any event, it is not the issue, you are quite right about that, Mr Morris; not in these proceedings, anyway.
Very well, I will adjourn until 1.45 pm. Is that satisfactory to you, Mr Slattery?
MR SLATTERY: Yes, your Honour, thank you. We will just try and do our best in relation to the list, your Honour.
HIS HONOUR: Yes, if you can, I am sorry, there is just so much material, Mr Slattery, that it is difficult to deal with.
MR SLATTERY: I am happy to accommodate your Honour.
HIS HONOUR: In fact, what I might ask you to do, could I ask your instructing solicitor perhaps to spend some time, if he is not encaged in compiling that list, with my associate, putting into order the material that you expect to be relying upon, so we can extract it. You do not have any problem with that, do you, Mr Morris?
MR MORRIS: No, of course not, your Honour.
HIS HONOUR: I know that you have served Mr Morris’ client, but if you do have copies of material, Mr Morris has not seen them obviously – whether he should or should not is another question, he should have seen them – but it might facilitate things if you can liaise with him and see what he has not got, so that that might expedite proceedings too. I know what you have done, you are under no obligation to do it, but it just might more efficient today, Mr Slattery.
MR SLATTERY: Yes, and your Honour probably knows what I am thinking as well in relation to perhaps the solicitors ought to go back to their offices and have a good look at that.
HIS HONOUR: There may not be time to do that. If they can, I am sure they will do that and I will ask them to do that, but that is not going to assist Mr Morris very much in the 40 or 50 minutes that he has before I will resume sitting.
MR SLATTERY: I will do everything I possibly can to assist, your Honour.
HIS HONOUR: Yes, all right.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: All right, I will adjourn until a quarter to two.
AT 1.06 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 1.55 PM:
HIS HONOUR: How did you get on with that list, Mr Slattery?
MR SLATTERY: Your Honour, what we have done is we have filled in the cover sheet for your Honour’s files and taken some copies of that. Does your Honour perhaps want a working copy of it?
HIS HONOUR: Yes, thank you, Mr Slattery.
MR SLATTERY: I only have one copy of that. What we have then done is gone to our index of our briefs and I am having those reconstituted so that all of the affidavits are listed and I am having a gap put below each so that your Honour may wish to write in what the affidavit is about. I think that is about the best I can do for your Honour.
HIS HONOUR: All right, well, when we come to that. But in any event, you wish to read and file all of the material. Is that right?
MR SLATTERY: Yes we do, your Honour.
HIS HONOUR: Yes, all right. There is nothing you say about that, Mr Morris?
MR MORRIS: I have not seen it, your Honour. I know nothing about it.
HIS HONOUR: Well, it does seem to depose to service of everything upon you. Is that right, Mr Slattery?
MR SLATTERY: Yes, it is ‑ ‑ ‑
HIS HONOUR: Upon your client’s solicitor, and, indeed, upon Mr Morris’s client also. Is that right?
MR SLATTERY: Very much so, your Honour, yes.
HIS HONOUR: So everything that you wish to read today has been filed and served upon both Mr Morris’s client and solicitor. Is that right?
MR SLATTERY: Yes. There are only two further affidavits relating to the service of the subpoena to the ITR and the respondent’s submissions in relation to the application to set aside the notice of discontinuance serviced upon ‑ ‑ ‑
HIS HONOUR: All right. Well, you proceed upon the basis that all of that material is in and you have proved the service of it.
MR SLATTERY: Thank you, your Honour.
At the time we broke, Dr Brown, we were discussing the relationship between Mr Brooke and the ITR?‑‑‑Yes.
And I think you gave evidence to his Honour in relation to the fact that you introduced Mr Brooke to the ITR and your expectation of the ITR were liaising with Mr Brooke in relation to the contents of the notice of motion.
MR MORRIS: I object, your Honour, that was not the evidence.
HIS HONOUR: No, it was not the evidence, Mr Slattery. The first part was, but not the second part.
MR SLATTERY: I beg your pardon; I withdraw the question.
The input that you understood the ITR may have had to the notice of motion for removal to the High Court?‑‑‑I wasn’t aware of the degree of input or anything like that. All I was aware of was that Mr Brooke was in liaison with ITR. I was not privy to any discussions he’d had with them. But I’m sure he got certain information, you know, that he could have evaluated.
How are you certain of that?‑‑‑Just because of our interest and what the ITR was doing.
And you in a position, of course, as agent, had some knowledge, did you not, that is, as an agent of the ITR, had some knowledge of what the ITR was doing from time to time?‑‑‑That is correct, yes.
For example, you were invited to an agents’ meeting by the ITR?‑‑‑Yes. Yep.
And you knew that the ITR was disseminating information at those agents’ meetings?‑‑‑Well, I can’t recall exactly what was disseminated. There were discussions about, you know, what was going on, you know, in the international arena and all these sorts of things, yeah.
That was information that was provided to you by the ITR?‑‑‑That is correct.
How many of these meetings did you attend during 1999?‑‑‑I think it was either two or three.
Also, I think, you were aware that the ITR had a web site?‑‑‑That’s correct.
Did you take access to that web site from time to time to obtain information?‑‑‑I have looked at their web site, yes.
Sorry, what did you say?‑‑‑I said I have looked at their web site, yes, and there was a - sorry.
Yes, and you – go on with your answer, I am sorry?‑‑‑Yeah, there was an older web site, not ITR, but, you know, to do with the same, you know, research material, sort of thing, yes.
I think that was during 1998 and it then changed to an ITR web site during 1999?‑‑‑Yeah. My main interest in going – I didn’t visit the ITR web site much because I’m not a real computer buff, but I was interested in ‑ there was a document, Australia - A Colony to Independent Nation, that I was particularly interested in and that was my main reason for accessing that, you know, web site from an academic point of view.
Did you become aware of the approach that ITR was taking to the Constitution of Australia and its validity?‑‑‑Yes, yeah.
And the arguments that were being put ‑ ‑ ‑?‑‑‑Yeah.
‑ ‑ ‑ in relation to contesting these taxation assessments?‑‑‑Yes.
Yes, and, of course, you had to understand that in your position as agent, did you not?‑‑‑And as a client, too.
Yes?‑‑‑And as an interested – you know, just as an Australian interested in the validity of our law in this country.
Yes, and these were the arguments that were being promulgated by the ITR?‑‑‑Yes, yeah.
And these were the arguments that were finding their way into, for example, the affidavit that you filed, which is exhibit AB?‑‑‑Yes, similar sort of ‑ ‑ ‑
Yes?‑‑‑Yeah.
And the material which was in, again, the notice of motion which is before you for removal?‑‑‑That is correct, yeah.
And so you recognised that material, did you not, as the material which was promulgated by the ITR?‑‑‑Well, certainly that material was similar to, you know, information that the ITR was providing. That is correct.
Thank you. And at the time, from October 1999 until the end of January 2000, I think your contract with the ITR, which is exhibit AA, continued?‑‑‑Yes. Yeah, on a technicality, yeah.
And that your agency with the ITR also continued?‑‑‑Yes.
And that when you ‑ do I take it that when you saw the notice of motion which is before you, you read it – perhaps I will lay the groundwork for that. Have a look at the document, could you please, the notice of motion, B61 of 1999?‑‑‑Yeah, yeah. Yes.
Have you seen that before?‑‑‑Yes, I have.
When was the first time you saw that?‑‑‑I think when it was – around about the time of the – you know, when the notice of motion was drafted by Peter Brooke. When I – when I signed an affidavit, I think, maybe connected with that notice of motion.
And did you recognise that the contents of this document were similar to, or had a connection with, other material which had been promulgated by the ITR?‑‑‑Certainly, yeah.
And you were happy for that material to come forward to the High Court?‑‑‑Yes, I was. I trusted in my solicitor’s evaluation of the material. I mean, whilst, you know, I’m not a practicing solicitor, I had, you know, some legal training a long time back and I firmly believed, and still do, that the arguments are valid. I don’t believe any court in this country has ever sort of taken these arguments point by point. They’ve just glossed around them.
But you also were trusting, were you not, in the accuracy of what was being promulgated?
MR MORRIS: Your Honour, that is starting to sound very much like cross‑examination.
MR SLATTERY: I withdraw the question; my friend is correct.
Notwithstanding that you were trusting your solicitor, I take it that you also recognised ‑ ‑ ‑
MR MORRIS: I object to leading, your Honour.
MR SLATTERY: You said that you trusted your solicitor to – I withdraw the question. You said that you recognised the material that the ITR were promulgating within the body of this document?‑‑‑That’s correct.
And you have also said that you did not pay your solicitor any fees in respect of this work?‑‑‑That’s true.
And you have also said to his Honour that the amount demanded under the winding‑up summons was paid on or about 17 December?‑‑‑Yeah.
Do you know whether any steps were taken in this action after 17 December?‑‑‑17 September – 17 December was when the dismissal of the creditor’s petition application or the application to wind up the company was done. I was aware that, you know, the notice of motion had been filed prior to that settlement.
Yes, we accept that?‑‑‑And I was also aware later on via Theo Tavoularis that the – that that notice of motion was still in existence, which I must confess surprised me at the time, but the notice of motion was still in existence and that there was going to be some application, you know, by the ATO against the applicant for the notice of motion.
When were you told that?‑‑‑I can’t remember exactly, but it was – you know, I can’t remember exactly, but it was a communication via Tavoularis & Co.
But you know that Tavoularis & Co did not have anything to do with the notice of motion, do you not?‑‑‑No, that’s right, and there was a - I think it was a communication from the Australian Government Solicitor just to Tavoularis to make me aware that, you know, there would be some application for costs potentially against me, or Peter Brooke, and they were trying to determine whether I’d given express instructions to Mr Brooke to issue the notice of motion.
I asked you the question whether you knew whether any steps were taken in respect of the notice of motion after 17 December 1999?‑‑‑No, because at the time I’d – you know, I ended up selling the company and I sort of, just ‑ the whole time had been a particularly stressful time for me and I just ‑ after that I’d sort of lost touch with the matter. I really sort of assumed it would die a natural death because the matter had been finalised. There was nothing to remove to the High Court. And then I was stunned when I got a call some time in the middle of the year, I think from Mr Eglasic, you know, from the Tax Department just, you know, asking me certain things about the notice of motion.
Yes. Do you recall – and I am now looking at a document that you have brought to the Court from your papers. It is the applicant, that is Arundel Chiropractic Centre Pty Ltd summary of argument. Could you please look at this document?‑‑‑Yes.
That came out of your files?‑‑‑Yes.
And that is a document that you have had in your files this year, is it not?‑‑‑Yes.
Could you look at the very top of the page. It has a fax header date on it. Could you read that out to his Honour?‑‑‑61733605799.
Is there a date there?‑‑‑12/1 – I think it is 12/1/2000.
Yes, and you see who it is from?‑‑‑The Australian Government Solicitor.
Do you recall receiving from the Australian Government Solicitor the document which you have in your hand?‑‑‑I don’t recall how I actually got that document. You know, I know it sort of ended up in amongst the file.
Yes?‑‑‑I can’t remember whether it may have come across – I just can’t, you know, be accurate as to how I got it.
But it is the case, is it not, that you received that document, it appears from the Australian Government Solicitor?‑‑‑Yeah, that’s what it would appear, yeah.
Did you speak to Mr Henke about the fact of that document being received by you at the time that you received it?---No, I didn’t.
Did you do anything about it?---When I receive notification of - you know, from the Australian Government Solicitor via Theo Tavoularis, I sort of put a query through to Peter Brooke about that and at the time I can’t remember whether he was, you know, in the country or out of the country. I was concerned that, you know, there would be some attempt to take costs against me at the time. But after the sale of the company I sort of – I must have because I didn’t pursue – I didn’t receive any information back or anything like that and I didn’t pursue the matter any more.
But you certainly knew about that?---Look, I knew that the notice of motion had been issued and that was, you know, still in existence, yes.
And not only that but also, I think, further steps had been taken by the filing of those submissions?---I knew that the ATO had filed an application, a date yet to be fixed, something like that, to try and get costs against the applicant or applicant’s solicitors.
Do you say you did not discuss that topic, that is the topic of the notice of motion, with the ITR in January 2000?---I can’t recall. I might have. I can’t specifically recall, I have to say. I may have sent through a note or something like that through to the ITR querying it; something like that.
That would be logical, would it not?---But not receiving any sort of reply back.
And that would be pursuant of the contract that you had with ITR, that you would communicate with them about that?---Not necessarily that. I just – I can’t remember whether Peter Brooke was in the – yes, he was normally the person who I would liaise with on legal matters and I was, you know, curious as to why this matter was still on foot, sort of thing.
Because you were about to sell the company, were you not?---Yes.
And you do not know what steps may have been taken, for example, after that time by the High Court itself?---No. You know, I had sort of lost interest in it after that. It had been a very stressful time for me and I just wanted to sort of move on.
Now, you say that you sold the company?---That’s correct.
In - - -?---About 2 February; 1st or 2nd.
Who arranged for that sale?---Robin Houston.
How much were you paid for the company?---$500.
When you say the company was sold, do I take it was it the sale of shares?‑‑‑That’s correct.
So, the whole of the capital of the company was transferred to the new shareholder?---That’s correct.
We have seen that the new director of the company is a Mr Clarence Marae. Did you meet Mr Marae?---No, no, I never did.
When the sale took place, were you conducting your business from your current address?---I was, yes.
And that was the business of the company?---At the time of the sale, yes, it would be the business of the company, yes.
That is right, so the company owned your business which was the chiropractic practice?---That’s right.
And it owned the plant and equipment of the practice?---No, the plant and equipment had been transferred to my wife.
When did that happen?---That happened in the preceding weeks, you know, prior to the sale of the company.
So you were paid $500 for effectively a shell of the company?---Some shares were owned by the company.
Yes, I am figuratively speaking now. You certainly transferred the shares on paper?---Yes.
But in terms of capital assets, all of those have been transferred to your wife?‑‑‑The director’s loan had been repaid as well. That was transferred at the time of the sale of the company.
And that would have been a debt of the company at the time or was that an asset of the company?---I’m not an accountant. I’m not quite sure how you’d view that.
Who owed whom money?---The directors owed the company money.
So the directors repaid the company the money that was owed?---Yes.
Then the shell of the company was transferred to the new owners?---Yes, that’s correct.
It did not take with it any plant or equipment or any name of a chiropractic practice?---No, the name was transferred at the time. It was changed just beforehand.
So it took no assets effectively with it, did it?---No, other than the repayment of the director’s loan and the shares.
I tender that document, your Honour. That is the submissions which are a document produced from the file of Dr Brown.
MR MORRIS: I do not know what that proves, your Honour. The fact that the ATO sent a document to this witness in January 2000 does not prove anything against my client.
HIS HONOUR: Do you mind if I look at that, Mr Morris?
MR MORRIS: Not at all, your Honour. Your Honour will, I hope, thereby see the force in what I am saying.
HIS HONOUR: What is the evidence? This document was sent by ‑ ‑ ‑
MR MORRIS: It was faxed from the ATO apparently to this witness.
MR SLATTERY: No, AGS.
MR MORRIS: AGS, I am sorry.
HIS HONOUR: From the Australian Government – it was faxed? Would you tell me, Mr Slattery?
MR SLATTERY: It is the outline of submissions filed on behalf of Dr Brown’s company.
MR MORRIS: I do not know that, your Honour. There has been no evidence to that effect, and the photocopy my learned friend has given me of the Court file does not show that any such outline was filed.
HIS HONOUR: What has the witness said about this document?
MR MORRIS: All he has said is that it is something he received by facsimile transmission from the AGS.
THE WITNESS: I don’t even know if I got it via facsimile. It may have arrived via Theo Tavoularis.
HIS HONOUR: Dr Brown, only speak, if you do not mind, when you are asked a question.
I am sorry, Mr Morris.
MR MORRIS: In fact, on this occasion the witness is right. He identified from the fax transmission indication at the top of the document that it was a document faxed from the Australian Government Solicitor on a date, I think, 12 January this year.
HIS HONOUR: Faxed from the Australian Government Solicitor?
MR MORRIS: Yes, and he does not recall how he got it.
HIS HONOUR: Right. That seems to be the evidence, Mr Slattery.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: Why should I receive it then?
MR SLATTERY: Your Honour, it is a document which is clearly received by the Australian Government Solicitor on behalf of Dr Brown’s company.
HIS HONOUR: But I thought the evidence was the other way, that it was faxed by the Australian Government Solicitor to Dr Brown’s company. Is that right?
MR SLATTERY: That is correct. So what has happened factually is that the Australian Government Solicitor must have received it to have faxed it. It has now faxed it to Dr Brown in circumstances where Dr Brown gave evidence of a memory of the conversation with the Australian Government Solicitor. It goes only to this, your Honour, it goes to ‑ ‑ ‑
THE WITNESS: No, that is not true.
MR MORRIS: He gave no such evidence, your Honour. He did not say he had a conversation with someone from the AGS.
MR SLATTERY: I did not say he had a conversation about that topic and I did not say that in my submission. My submission is that at the time in January, in or about January, there is a memory of a conversation with someone from the Australian Government Solicitor’s office.
MR MORRIS: He did not give that evidence at all. He said that he was told something by his solicitor.
HIS HONOUR: Yes, I think that is right, Mr Slattery. Dr Brown, I have told you, do not interrupt, please.
MR SLATTERY: It does not really matter, your Honour, and I apologise if I am wrong.
HIS HONOUR: Mr Slattery, it is important. A very technical defence is being taken to your claims here. Mr Morris is entitled to take it and I would prefer you to state with precision what the evidence is. The evidence does not seem to go any further than Mr Morris has said. Why is this admissible then, based upon that evidence?
MR SLATTERY: Your Honour ‑ ‑ ‑
HIS HONOUR: You are asking me to draw an inference that because it came from the Australian Government Solicitor to Dr Brown – what inference do you ask me to draw from that?
MR SLATTERY: That Dr Brown had knowledge of the fact that steps were being taken in respect of the notice of motion. This goes to answering ‑ and that is the limit of it, your Honour ‑ to answering points raised in my friend’s outline of submissions concerning what was done. I can tell your Honour - the copy we have received, there is a stamp on the bottom left‑hand corner but it is very oblique. I have to do this from the Bar table and I am sorry, but can I tell your Honour ‑ ‑ ‑
HIS HONOUR: You cannot tell me things that are in documents that are not in evidence, Mr Slattery, you really cannot.
MR SLATTERY: No, your Honour.
HIS HONOUR: You tell me what inference you ask me to draw from this document on the basis of the evidence so far adduced.
MR SLATTERY: Absent the knowledge of Dr Brown, that steps were being taken ‑ ‑ ‑
HIS HONOUR: This proves that Dr Brown was aware that the Australian Government Solicitor had received what purports to be a submission on behalf of Arundel Chiropractic Centre. Is that right?
MR SLATTERY: Yes, your Honour.
HIS HONOUR: I do not see why I should not admit it.
MR MORRIS: I do not see what it proves against my client, your Honour, but if it is ‑ ‑ ‑
HIS HONOUR: It might give rise to an inference with other facts. I will receive this document.
MR SLATTERY: Can I tell your Honour that I was hesitating looking at this list because I thought it was document No 2. I have now been given the original High Court filed document. It is document No 2 on the large index.
HIS HONOUR: In any event, what you want to prove, and you had the witness prove, that he received this document and saw it at about the time that it purports to have been sent, is that right?
MR SLATTERY: Yes, that is correct, your Honour.
HIS HONOUR: Which is January this year, is that correct?
MR SLATTERY: That is correct.
HIS HONOUR: The document is already before me in other material.
MR SLATTERY: Yes.
HIS HONOUR: But in any event, you have proved it. All right, you proceed.
MR SLATTERY: Thank you, your Honour.
Just to finish off that point, it appears that you have received that document on or about 12 January 2000?
HIS HONOUR: Do you want to see it, Dr Brown?---Yes, I’ve seen the document, your Honour.
Yes, it does seem to have that facsimile ‑ ‑ ‑?---I can’t – look, if that’s the date, that’s the date.
That is about the date you received it?---Most likely, yes.
MR SLATTERY: After receiving that, I think you said to his Honour that you may have had a conversation with Mr Henke?---I don’t – actually, I’m sure I didn’t have a conversation with Mr Henke, but I’m pretty sure I faxed through a scribbled note, a query as to, you know, what’s going on with this, the same as I tried to make some inquiries with my own solicitor because my own focus was just on settling the matter.
HIS HONOUR: Just excuse me one moment, Mr Slattery.
Dr Brown, just have a look at the signature on the last page of that. Can you tell me whose signature that is? Can you identify that? Mr Brooke’s, is it?---I don’t know actually.
It has got “Solicitor” underneath it?---“By their town agent, Galtans”. It could be but I’m not sure. I’ve not made a study of this particular signature.
All right, thank you.
MR SLATTERY: But I take it you left it to Mr Henke and Mr Brooke to sort out?---Yes, that’s correct.
And you did not take any further action in relation to it?---No.
At the time you sold the company, you did not turn your mind to that matter?---No, that’s correct.
Have you had any discussion with Mr Henke on the topic of the notice of motion after you sold the company?---No, actually I haven’t. I had a quick conversation at the time when Mr Eglasic rang me, and I just - out of interest just, you know, rang Mr Lance Miller.
Who is Mr Lance Miller?---He’s a director, I believe, of the Institute of Taxation Research.
What was your discussion with Mr Miller?---More just querying, you know, what was going on. I was just surprised that that was still there. It just caught me sort of off guard and I ‑ ‑ ‑
What did he tell you?---I’m just trying to remember.
This was in about June, was it not?---Around about June, yes, and I think at the time he just said “Well, you know, it’s none of the business of – you know, that they should not be contacting you, you’re not, sort of, a party to the proceedings and you tell them ‑ you refer them to the solicitor on record.
That was Mr Brooke?---As far as I know, yes.
Yes. Mr Brooke was not in Australia at the time, was he?---No.
You knew that, did you not?---Yes, I did.
Did you say that to Mr Miller?---No, I didn’t.
In your documents that you have provided to the Court, you have provided what is called a summary of court cases, and I show you this document that came from the documents which you provided to the Court?---Yes, that is correct.
That purports to be, does it not, a summary of court cases in which the ITR is involved?
MR MORRIS: I object, your Honour. The document speaks for itself and it does not have the purport which my learned friend asserts.
MR SLATTERY: I will withdraw the question and I will put it again, your Honour, and I apologise.
Do you recall receiving that document?---I don’t recall when I received the document. I just recall, you know, having seen the document and from time to time I have come into possession of, you know, information through from the ITR in our academic interest of what is going on with court cases around the country.
Looking at the face of that document, do you see your name on it?---Yes, I do.
Does that report on your case?---It just says, “Held over for six weeks. This case is now subject to the writ below.” That is the only writ.
Now, I cannot see that there is a writ below, so I do not ask you to try and guess that?---Yes.
But it is the ITR reporting on your case, is it not?---Yes.
Do you know if that type of document was disseminated by the ITR from time to time?---Quite possibly, you know, because they would keep clients up to date with how they were going as far as these constitutional arguments in the Australian courts.
Did you read that document when you received it?---I may have just glanced over it. I mean, like, I am so busy with all my other sort of affairs and things, I don’t sort of – particularly that latter part of the year is not a good time for me as far as being able to sit down and academically study things or anything like that.
There is not much on the page, is there?---No.
I tender that document, your Honour.
THE WITNESS: I’m not even sure when or where or how I got that particular one, whether it came by mail or ‑ I imagine that would have been the way.
HIS HONOUR: Is that AC, I think, that is the third exhibit, is it not?
MR SLATTERY: Yes, your Honour.
MR MORRIS: I thought AC was the outline of argument that your Honour just quoted.
HIS HONOUR: You are quite right. It should be marked AD.
EXHIBIT: Exhibit AD…..Summary of Court Cases
MR MORRIS: It would be AD.
HIS HONOUR: That outline of argument which I think the witness may still have, should be AC. The outline is AC, that is right.
MR SLATTERY: Further material, I think, that you received ‑ ‑ ‑
HIS HONOUR: Could I see that document? I have not seen it yet, you see.
MR SLATTERY: Sorry.
HIS HONOUR: Yes, Mr Slattery, you can go ahead.
MR SLATTERY: I show you another document. It is dated 24 May 1999. It is from the Institute of Taxation Research addressed to “Dear ITR Client”.
HIS HONOUR: That is 24 May?
MR SLATTERY: May 1999. That is a document that came from your file?---Yes, that’s correct.
That is a document that you receive from time to time?---Yes, that’s correct.
That is an update document that you got from the ITR?---Yes.
Did you read that document when you received it?---Yeah, briefly. I was a little bit more familiar with things at that particular time of the year, you know, and I was never really interested in what was going on with matters in the various courts.
I tender that document, your Honour.
MR MORRIS: Your Honour, I will formally record the same objection. This is, I think, six months, five months before any proceedings were commenced in this Court. Again, it is, in my submission, not relevant to establishing anything against my client in these proceedings, but your Honour may well rule that it is ‑ ‑ ‑
HIS HONOUR: All right, can I see that document, please? Yes, that can be marked AE. You go ahead, Mr Slattery.
EXHIBIT: Exhibit AE…..Document from ITR dated 24 May 1999
MR SLATTERY: Thank you, your Honour.
I show you a further document, that of 12 October 1999, “Welcome to ITR” and it talks of the ITR web site and that came from your papers?---Mm.
And is that a document that you again received in the course of your relationship with ITR?---Yes.
You say that there was a referral to a web site?---Yes.
A web site address is given?---Hang on a sec – yes, that is correct. Yeah, that is correct, yep.
Is that the web site to which you took access during 1999?---Yes, to pull down that document I referred to, that, you know, “Australia – Colony to Independent Nation”.
Yes, yes. But I think you ‑ ‑ ‑?---There did not seem to be ‑ when I accessed it, there didn’t seem to be a lot on that particular web site at the time.
Did you read right through the web site?---I think I must have at the time, but, you know, my main focus was getting that particular document which academically sort of contained all the references that I was after as far as the delineation of these issues and the argument that – you know, that – you know, anyway.
But, in any event, there was other material on the web site?---Yeah, there may well have been. I just can’t recall. I just was focussed on one particular thing I was after. I have not sort of regularly gone to their web site, or anything like that, so.
I tender that document, your Honour.
MR MORRIS: The same objection, your Honour.
HIS HONOUR: Yes, that will be AF, and that can be marked and let me have a look at it, please. You go ahead, Mr Slattery.
EXHIBIT: Exhibit AF…..Document from ITR dated
12 October 1999
MR SLATTERY: Thank you. One final document, Dr Brown. I show you a document headed “Notes for Section III of George Greer Respondent’s Summary of Argument”. Would you look at that document please, and it is a document that came from your file?---Yeah, I saw that and I was trying to figure out who this George Greer was or how I got hold of that, but, anyway, it was on the file and, you know, the summary of argument was of interest, you know, the ‑ yeah, but I haven’t sort of read that closely. I might have read it at one particular time but I couldn’t even recall it.
How did you come to have that document?---I don’t know.
It is a document you produced in answer to the subpoena. Does that give you any help?---No. Like it was just on the file, that is all.
The reasonable inference is that it came from ITR?
MR MORRIS: I object to my learned friend leading cross‑examination and, in any event, it is a matter for your Honour to draw reasonable inferences, not the witness.
HIS HONOUR: Quite, quite.
MR SLATTERY: I withdraw the question.
Could you have got it from anyone except ITR?---Most likely it might have come indirectly via ITR, you know, but, I mean, me ‑ personally I wasn’t in liaison with other groups who were pursuing this information, so my main information source for, you know, constitutional sort of issues was through the ITR who’d been conducting the research over many years.
I tender that document, your Honour.
MR MORRIS: I object, your Honour, it proves nothing.
HIS HONOUR: Do you mind if I look at it, Mr Morris?
MR MORRIS: Yes, your Honour.
HIS HONOUR: It looks very like some of the material that has been disseminated ‑ in fact identical ‑ Mr Morris, by your client.
MR MORRIS: It does, it does.
HIS HONOUR: Why should I not infer, that being so, that it is identical with much of your client’s material, and that it was in the possession of this witness and that he was in contact with or that ITR was in contact with him? Why should I not infer that it came from your client?
MR MORRIS: Your Honour, that, with respect, is only part of the point. The rest of the point is whether it was in any sense relevant to this witness’ company choosing to institute proceedings in this Court.
HIS HONOUR: That is another question and, I mean, if you turn out to be right about that, then these documents will prove nothing; but if, on the other hand, you are wrong about that, then incrementally they may go to prove something. So, on that basis, I will admit it.
MR MORRIS: Thank you, your Honour.
HIS HONOUR: It becomes Exhibit AG.
EXHIBIT: Exhibit AG…..Notes for Section III of George Greer
Respondent’s Summary of Argument
MR SLATTERY: Thank you, your Honour.
Dr Brown, the proceedings, being a notice of motion in the High Court, were discontinued two weeks ago. Did you give instructions for those instructions for those proceedings to be discontinued?---No.
No further questions, thank you, your Honour.
HIS HONOUR: Just before you go ahead, Mr Morris.
You say you did not give instructions to anybody to discontinue the proceedings in this Court?---No. I, you know, just queried it with my solicitor as to, you know, what was going on with that and then I didn’t hear any more about the matter.
So are you saying that your solicitor discontinued the proceedings without ‑ ‑ ‑?---No, no ‑ ‑ ‑
‑ ‑ ‑ no, listen to me please ‑ ‑ ‑?---Yeah, sorry.
‑ ‑ ‑ without your knowledge or prior consent?
MR MORRIS: Your Honour, I regret I have to object to your Honour’s question. Your Honour’s question speaks about “your solicitor”. Your Honour may have overlooked the fact that this witness sold the company back in January and the evidence is it has an entirely different director now. It is not his solicitor who discontinued.
HIS HONOUR: Thank you for that.
Did you have any knowledge about the discontinuance of the proceedings?‑‑‑No. No, I didn’t, no.
Thank you, Mr Morris. Did you want to ask anything before Mr Morris begins?
MR SLATTERY: No, I do not wish to ask any questions except that I ask your Honour to read an affidavit of Mr Henry ‑ ‑ ‑
MR MORRIS: Your Honour, it is not the time for asking your Honour to read material, is it?
HIS HONOUR: No, no, but I want to know because it may be relevant to my question and, Mr Morris, the material is in and if it is convenient for me to look at it now, I will look at it now.
MR MORRIS: Yes, as your Honour pleases.
HIS HONOUR: As Mr Slattery tells me it would be convenient in response to an inquiry that I made of the witness, I will look at it. Would you ‑ ‑ ‑
MR SLATTERY: Thank you, your Honour. It is the affidavit of Mr Morris James Clifford Henry of 25 September 2000.
HIS HONOUR: Yes, can I see that, please? We do not get a lot of experience in trials in this Court these days, Mr Morris.
MR MORRIS: No.
HIS HONOUR: Yes, I have looked at that. You have no further questions, Mr Slattery?
MR SLATTERY: Excuse me. I might just refer your Honour to another affidavit. Yes, I am looking, your Honour, in particular at that affidavit, at MCJH-2, which is a letter from Rea Sockhill Solicitors to the Australian Government Solicitor of 21 September denying any knowledge of Mr Marae.
HIS HONOUR: Who is Mr Marae?
MR SLATTERY: If your Honour goes to the affidavit of 15 August 2000, the affidavit of Mr Henry.
HIS HONOUR: Yes.
MR SLATTERY: Would your Honour also open then the fifteenth exhibit to that affidavit.
HIS HONOUR: We will get that out.
MR SLATTERY: Can I tell your Honour that Mr Marae is disclosed on that affidavit document as being the current director of Nuradel Pty Ltd, the only director of Nuradel, hence my question. My question was, the evidence is that Rea and Sockhill, the solicitors, who filed a notice of discontinuance, know nothing of Mr Marae and ‑ ‑ ‑
HIS HONOUR: Yet Mr Marae is a director of ‑ ‑ ‑
MR SLATTERY: Yes, precisely, the only director. That is our point, your Honour, thank you. No further questions.
HIS HONOUR: Mr Morris.
CROSS-EXAMINED BY MR MORRIS:
MR MORRIS: You are familiar with the notice of motion which was filed to remove proceedings from the Supreme Court to this Court?---That is correct.
My learned friend asked you before lunch a number of questions about conversations which you had with Mr Henke, or may not have had with Mr Henke. I want to ask you firstly whether you have any specific recollection of discussing that notice of motion with Mr Henke before 14 October, which is the date which it bears?---No specific recollection, no.
All right. Do you have any recollection of discussing it with Mr Henke between 14 October, which is the date which it bears, and 25 October, which is the date on which it seems to have been filed?---Look, to be honest, I don’t have any specific recollection.
All right. If then I ask you the same question about the period following the filing on the 25th and the service on 2 November again, I assume you would give the same answer?---Yes, it is just, you know, with dates and everything like that. I was in communication from time to time with Mr Henke with, you know, notice of motion I may have, just as an academic interest, discussed, you know, particular points on that. I truly just can’t, you know – I was interested in some of the academic points that hadn’t been before the courts before, you know, and, you know, they might have been able to give me more information on that sort of thing.
All right, but you certainly discussed the notice of motion with Mr Brooke, there is no doubt about that?---Yes.
And you authorised him to file that?---That is correct.
That is, in your capacity as director of Arundel, you instructed him as Arundel’s solicitor to file that?---Yes. I knew if he – you know, I trusted him and in his judgment, you know, the argument was untenable, then he would have said, “Well, there is no point and lets not do it”.
How long had you known Mr Brooke at that stage?---A long time. I have known him ever since I did law back, you know – he was an articled clerk at the same time I was.
Right.
HIS HONOUR: How much law did you do, Dr Brown?---I completed a law degree with the Queensland Solicitors Board back in, I think it might have been 1980 I might have been admitted to the Supreme Court of Queensland.
But chiropractors offered better attractions?---I started in medicine first of all – but when I saw this material I had a strong academic interest in what they were saying.
But, in any event, you did have a qualification which would have enabled you to practise ‑ ‑ ‑? ---If I had wanted to, yes.
HIS HONOUR: Did you do articles or ‑ ‑ ‑? ---Yes, I did articles with Crouch and Crouch just up here at Turbot Street.
MR MORRIS: I do not think in 1999 you actually held a current practising certificate, did you?---No, no. I have not had a current practising certificate ever since I, you know, left the law.
All right.
HIS HONOUR: When did you leave the law?---It was about a month after I qualified.
You did not give it much of a chance, did you?---I know, it just wasn’t me at the time unfortunately. I sort of – anyway.
MR MORRIS: The point I wanted to make is this: it is not that you have been struck off or suspended, or anything like that?---No, certainly not, no.
Apart from the fact that you had not paid the money to the Law Society to get a practising certificate, you were qualified to act as your own solicitor if you chose to?---Sure, yes.
All right. But instead you chose to instruct Mr Brooke?---Well, yes, something like, you know, he was practising and he has been in the practice for what amounted to 20 years so, you know, obviously, I am going to employ, you know, another solicitor to look after my own interests and ‑ ‑ ‑
HIS HONOUR: But, Dr Brown, did you not exercise any judgment about this yourself, as a person with some legal knowledge? Did it not strike you that what you were being told was utterly crazy, not to put too ‑ ‑ ‑? ---No, it did not, your Honour.
Bizarre ‑ ‑ ‑? ---No, I can understand it from certain perspectives but I don’t believe it is bizarre.
You still do not believe it is bizarre?---No, no.
It would not matter how many judges of this Court told you that it was bizarre, you would still refuse to believe it was bizarre?---Your Honour, just because, you know, courts hold a particular matter as being so does not necessarily mean that that is always the truth. That is just my – I am entitled – everyone is entitled ‑ ‑ ‑
If that occurs again, I will clear the Court. If I hear any sound or clapping of any kind, I will clear the Court and I will exclude you, every one of you. Do not repeat that.
Are you suggesting then that you would not regard yourself as bound by any decisions and orders of the courts of this country?---No, what I fervently want is that these issues to be looked at, you know, point by point, that documents that have been raised, you know, should be actually looked at rather than ‑ ‑ ‑
But you know they have been looked at?---I don’t believe they have, your Honour.
I see. You go ahead, Mr Morris.
MR MORRIS: Thank you, your Honour. Dr Brown, am I right in thinking that part of the reason why you decided to retain Mr Brooke was that you knew that he also had an interest in the sorts of issues that you wish to raise?---Sure, yes, as I mentioned, I introduced him to ITR.
And he was another of the faithful. He believed in those propositions?---Look, he was interested in them, I think, probably not as fervently as I was. You know, he received counsel from other sources other than just ITR and that is what, you know, I trusted in his judgment. You know, if he felt – if ITR was saying, you know, this is sort of valid material, and he disagreed with that, then I would go with Mr Brooke, not with ITR.
So, weighing up Mr Brooke, on one hand, and Mr Henke and ITR on the other hand, you were putting much more faith in what Mr Brooke said?---Sure, yes. I mean, he is the legally qualified one or, you know, whilst I know ITR has got legally qualified personnel in its offices, you know, I still authorised Peter Brooke to look after my affairs. I trust him.
HIS HONOUR: Dr Brown, you also had a financial interest in this matter, did you not, in the sense that if you introduced customers to the so-called Institute, you would be paid for it?---That is correct, your Honour.
It was not just an academic interest, was it?---Well, that is true. You know, there are other interests as well.
A very strong financial interests?---But my first connection with all of this was as an academic ‑ ‑ ‑
So the 15 per cent was totally irrelevant to you?---No, obviously not, but that was not my driving motivation and, you know, as I have mentioned, I was very much in connection with what people associated with, what became the ITR, well before ITR ever sort of was formed.
How many people did you introduce to the Institute?---I can’t say for sure. It might have been, I don’t know, 40, or something like that; 30, 40.
And how much money were you paid as a result or did you receive as a result?---I would have been paid maybe 12,000, or something like that, over a period of time. Not all the people that were introduced would necessarily follow through with it. I would sort of connect them with the ITR and then they would conduct their own negotiations with them.
Yes, all right.
MR MORRIS: Thank you, your Honour.
Dr Brown, I want to ask you a hypothetical question? I emphasise it is hypothetical, we know it did not happen, but if, around the time that the notice of motion was filed, Mr Henke or someone else from the ITR had rung you up and said, “I have had a conversion on the road to Damascus, I no longer believe in these arguments and propositions. You know, I have changed my mind, I disagree with it all”. What impact would that have had on your notice of motion?---Firstly, knowing Ian Henke a little bit ‑ ‑ ‑
I know it is hypothetical?---Yes, I know. You know what I mean, like, if he were to say something like that, I would imagine his life would have been threatened, or something really drastic, because I know he fervently believes in the accuracy of the research material and what effect that would have had on my notice of motion, I don’t know. I mean, it is a hypothetical question. You know, it is a hard one to really answer.
I just want to understand, absolutely clearly, whether it was the advice you were getting from Peter Brooke, your own views and beliefs or the influence of Mr Henke that led you to institute proceedings in this Court? Which of those three factors was the most powerful?---It would still have to be the advice of Peter Brooke.
So if the hypothetical situation I just described had happened, however remarkable that seems ‑ ‑ ‑?---Yes, well, I would certainly be discussing it, you know, if we were about to issue a notice of motion or something like that and then that, I mean, you know, I would be liaising with Peter Brooke and saying, “Well, what do you think, you know, this is a pretty amazing turnaround? Is this valid or is this not, or what?”
At some stage you did obtain counsel’s advice, did you not, in relation to these arguments? Was there not a Mr Myers of counsel here in Brisbane who appeared on behalf of your company in the winding-up proceedings?---Yes, but I wasn’t sort of privy to his advice or anything like that.
All right. You certainly became aware anyway over a period of time that judges, as his Honour has mentioned, both in this Court and in Supreme Courts and Federal Courts around the country, have used expressions such as “nonsense” to describe the arguments put forward by the ITR?---Yes.
And none of that has convinced you otherwise?---No, it hasn’t.
All right. And Mr Henke alone would not have convinced you otherwise, would he?---No, not him alone, no.
On the other hand, if Mr Brooke had said, “Look, frankly, Mark, this is just all total nonsense. We are wasting our own money and our own time and the Court’s time”. If Mr Brooke had said that, that would have had an impact on you, would it not?---Certainly, yes.
Yes. Without Mr Brooke’s support, you just would not have gone ahead in this Court?---No.
As we have seen, not long after the notice of motion was prepared on 14 October, you engaged a new firm of solicitors to commence negotiations with the ATO. Can you explain to his Honour what your thinking was at that stage, why you decided instead of ‑ ‑ ‑?---I think at the time - that was Mr Houston who organised that at the time Peter Brooke was out of the country and I had no access to him.
Mr Houston was your regular tax accountant?---Yes.
Am I right in thinking Mr Houston does not subscribe to the same arguments and opinions as ITR?---No - yes.
Mr Houston is an accountant who conducts his practice in what many people would regard as an orthodox way?---That is correct.
Yes, and his advice was that you should commence negotiations to the ATO to get ‑ ‑ ‑
HIS HONOUR: I do not understand that. You are prepared to take Mr Houston’s advice but you are not prepared to accept the views of a very large number of judges in this country. How do you explain that?---I mean, I wanted that notice of motion to go through to be heard by the Court but then I had no way, you know, of knowing that that was going to be successful, you know.
But you accepted Mr Houston’s advice, but you do not, apparently, accept the judgments and opinions, not just of one judge but of a multiplicity of judges?---I know, your Honour, you know, my belief is that a lot of these decisions have got some political motivations behind them and that is just my personal belief. I think these issues have not been looked at closely enough.
What, the political motivation being that judges think that everybody should pay their fair share of income tax?---No, that is not the real issue. The real issue is the valid footing of law in this country.
HIS HONOUR: Yes. Go on, Mr Morris.
MR MORRIS: Dr Brown, let us get this right out in the open. You, to this day, believe the arguments advanced by the ITR?---I want to see the arguments, you know, conducted in a fair forum. I don’t believe that that has been done at this point in time.
Can I ask you this, Dr Brown? If someone breaks into your house and steals things from your house, would you contact the police?---Of course, yes.
You would not say to yourself, well, because there is no valid legal system in this country, therefore there is no valid police force, therefore they do not have any authority?---I am not about confronting authority in the sense of, you know, like trying to break laws or anything like that. What I am about is to just have issues and fairly and openly looked at.
I see. In any event, that is what you are telling his Honour was your motivation when you gave instructions to file the notice of motion?---Well, you know, the issues that were raised were, you know, under the Constitution, could only be heard by the High Court anyway.
Do you recall Mr Henke actually giving you any encouragement to file the matters of motion?---Not specifically, no.
Or anyone else from ITR? I have said Mr Henke, but let us broaden it – anyone from ITR give you any encouragement to do so?---No, not specifically so.
Mr Henke, you knew, did not have any legal qualifications?---That is correct.
And he did not profess to you to have legal expertise?---No.
And nor did anyone else from ITR?---I think Mr Zoltan Vasagy is a qualified solicitor, or barrister, I am not sure, and I think there is another fellow, Jim Murphy, at the office, who is a qualified solicitor.
So there are solicitors employed in the ITR, but you did not retain them as solicitors?---No.
But you did not retain them as solicitors and they did not say to you that they were providing you with legal advice?---No.
That they were providing you with research on matters of ‑ ‑ ‑?---No, I never spoke to any of these people. It was just, you know, they provided, you know, research material, that sort of thing, and my own solicitor would have had access to that material.
Did anyone from ITR give you any formal advice in relation to the notice of motion in this Court?---No.
Did anyone from ITR assist you in relation to the filing of the notice of motion on the proceedings in this Court?---No.
You see, I am reading from the Deputy Commissioner’s summary of argument which asserts that the ITR encouraged you, formally advised you, assisted you, and so on. Did any of that happen?---I do not recall anything like that – that sort of specific type of stuff, no.
Well, did anything like that happen at any stage between, so that we can put the perimeters clearly, shall we say 14 October, when the notice of motion was prepared, and 17 December when the winding-up proceedings were finalised in the Supreme Court? Any encouragement, formal advice, assistance, anything like that in relation to the notice of motion?---No, nothing like that.
What you expected and anticipated would happen is that your solicitor, Mr Brooke, would draw on information available to him, including information published by ITR?---Yes.
Just as he would draw on books and journals and articles?---Or articles, legal colleagues, that sort of thing.
My learned friend asked you whether you had had an account from Peter Brooke or his firm in relation to the notice of motion, and you said you had not?---No.
Did you expect to get an account? What did you expect to be the arrangement in relation to the cost of the notion of motion?---Once again, I had not even though about that; I mean, I treat Peter for free and he looks after my affairs sort of thing. I pay outgoings, sometimes like that with him, but I had not sort of received any request for fees through from him.
Was there any arrangement that ITR would pay legal costs for the notice of motion?---I was not privy to any sort of arrangement like that.
I am afraid I will have to take you through some of the exhibits since they have gone in. Can we start with exhibit AB. That is the affidavit you swore for the purposes of the Supreme Court proceedings?---Yes.
I take it you have read through that affidavit before you swore it and satisfied yourself that it accurately expressed your position?---Yes.
All right. You see, my learned friend put it to you or extracted from you the answer that you did not give any instructions for the preparation of that affidavit. Is this the correct situation, Dr Brown, that you had had many discussions with Peter Brooke over many years about the constitutional and legal arguments that ‑ ‑ ‑?---Not over many years; he has been involved with it maybe two years, that sort of thing.
Well, certainly by the time that this affidavit was prepared you had had extensive discussions with him?---I knew he knew the issues in this sort of thing.
So you would then retain him to act for the company in relation to the winding-up proceedings?---Yes.
You then had a discussion with him in general terms as to the basis on which the company would defend those proceedings?---Yes, I guess so. I do not recall having sort of lengthy discussions with him; I had my own work to do and I just said, well, you know ‑ ‑ ‑
But he prepared the affidavit and, when you looked at it, you saw ‑ ‑ ‑?---I agreed with the material in the affidavit, yes.
Because it was the very types of points you have been canvassing in your discussions with Mr Brooke up to that time?---That’s correct.
All right. That can go back and I would ask you to have a look at exhibit AC; I do not know if that is still in front of you?---I am not sure I have got that one in front of me, exhibit AC.
That was the set of submissions that have the fax marking on them from the Australian Government Solicitor’s office.---Yes, sorry.
Now, just by way of clarification, do you know whether that was faxed directly from the Australian Government Solicitor’s office to your office or whether it was faxed by the AGS to someone else and then ‑ ‑ ‑?---I suspect it was sent to Mr Tavoularis; that is how I got a copy of that, I think, but I really am not sure.
Now this is in January 2000. To your knowledge was Mr Brooke still practising in January 2000?---As far as I know he was, yes.
And he was your solicitor on the record on the High Court proceedings?---Yes.
All right. Do you know why the AGS was corresponding with solicitors who were not involved in the High Court proceedings?---I think only probably, I don’t know, they may have assumed that Mr Tavoularis was involved with the, you know, the High Court sort of proceedings, which he wasn’t.
Right, OK. In fact, the situation had always been clearly distinct, had it not? There had been a distinction between Mr Brooke handling the constitutional and similar arguments, including the notice of motion to this Court, and Mr Tavoularis handled the negotiations which led to your company paying its debt to the Australian Taxation Office?---Yes.
Now, at the time when that occurred in December 1999, when the winding‑up proceedings were resolved, your company agreed to pay, and did pay, both the debt claimed by the ATO and also costs?---That’s correct, yes.
And that was on the basis of an agreed sum for the ATO’s costs, was it?‑‑‑That’s right.
And the Australian Government Solicitor’s office, Mr Henry, came up with the figure; he said, this is how much costs we want you to pay?---I guess so. It was Mr Tavoularis was negotiating with them and that was the amount that was raised that I had to pay.
All right, well in any event, you were told by Mr Tavoularis a figure that you had to pay for the ATO’s costs, and you paid that?---Yes, that’s correct.
And your understanding was that that would bring the entire matter to an end?---Well, yes; I wanted the whole matter just to come to an end and just get back to a normal life, you know.
Let us put yourself for the moment in the situation you were in on 17 December 1999 when you were instructing Mr Tavoularis to resolve the winding-up proceedings in the Supreme Court. If Mr Henry, or someone from the Australian Government Solicitor’s office, had said at that time, well, hang on, you have got this notice of motion in the High Court as well. Would you have agreed to the proposition that once the winding-up proceedings were dismissed, then the notice of motion also automatically had to be dismissed because there was nothing ‑ ‑ ‑?---I mean, I would have thought that that might be the case.
MR SLATTERY: I object to the question, your Honour; it is a supposition based upon a supposition. If you put yourself in the position that you were in and suppose that something might have been said to you, what do you suppose you might have done if that something had been said to you?
HIS HONOUR: Well, that is not the only way of putting it. I suppose another way of putting it is that I ask you to make this assumption. Having made that assumption, what do you think your reaction would be if that assumption is a correct one? That is the sort of question that is frequently asked, is it not? Is that what you intended, Mr Morris?
MR MORRIS: Exactly, your Honour, yes.
HIS HONOUR: I will allow the question, but perhaps you might rephrase it a little more, Mr Morris.
MR MORRIS: Yes.
If in December 1999 someone from the government authorities, the ATO or the AGS had suggested that the proceedings in this Court should be discontinued at the same time as the winding-up proceedings were discontinued, what would your attitude have been?---Well, I would have thought that that should be the case, because there is nothing – I mean, I am not saying – I would have thought that we were trying to remove that case to the High Court and after that case in the lower court had been settled and dismissed, then what is there to remove to the High Court.
Now, I want to take that one step further. If at the same time they have said, well, you have agreed to pay the costs of the Supreme Court proceedings, but there are also some costs connected with the High Court proceedings, what would your attitude have been in that?---I would have thought, well, what would have those costs have been. I mean, they would have been pretty minimal if they had been. I mean, look, if that had come to that, you know, I would have just paid it just to get rid of it.
Nothing of that nature, I take it, was raised in that time?---No.
Now, on 19 January 2000, which was a little over nine months ago, the Australian Taxation Office or the Deputy Commissioner filed a notice of
motion seeking costs against your company and on 19 January you still controlled that company?---Yes.
Do you know of any steps taken between 19 January 2000 and, shall we say, the middle of August 2000 by government authorities to obtain an order for costs against your company?---The first I was sort of aware of anything connected with that, as I mentioned after I sold the company I just sort of focussed on just getting on with my life, but it was when I had a call from Mr Eglasic, I think it was, from the South Australia Tax Department, sort of asking me was I aware of this and had I authorised it or something like that.
MR MORRIS: Well, as at 19 January 2000, if you had been served with an application for costs, what would your attitude have been to paying the costs of the ‑ ‑ ‑?‑‑‑I guess it would depend on how much costs were.
Of course?‑‑‑You know, I mean, there’s got to be fairness in these things and, you know, I know there can be exorbitant – in my opinion, exorbitant costs that get notched up with these things and, you know, if there was – it would just depend, you know, just on – my whole focus at that particular point in time was to just get the matter resolved and just sort of have a bit of less stress in my life sort of thing. I had other issues with a pregnant wife and a baby and all this sort of thing going on and a busy practice. I mean, the stress was just getting too much.
And at that point in time what was Arundel’s capacity to pay any such costs?‑‑‑It could easily pay it, yeah.
Yes?‑‑‑As I said, it wasn’t an issue of not being able to pay anything. It was more just the issue of requiring, you know, proof of authority to pay in the first instance.
I have nothing further. Thank you, your Honour.
HIS HONOUR: Re‑examination, Mr Slattery.
MR SLATTERY: Yes, your Honour.
RE‑EXAMINED BY MR SLATTERY:
MR SLATTERY: In January 2000 were you using Tavoularis & Co as your lawyers?‑‑‑After the dismissal of that matter I was no longer using them as my lawyers, although I did receive a communication through from them, you know, after that dismissal notifying me of, you know, the Australian Government Solicitor’s notice of motion.
Was that on or about 12 January?‑‑‑It was some time in January, yes.
Thank you. And did you receive a letter from Mr Henry addressed to Tavoularis & Co?
MR MORRIS: That is a leading question, your Honour, and it does not arise out of cross‑examination.
HIS HONOUR: Well, I think that is right, Mr Slattery, but you might be able to ask a different question.
MR SLATTERY: Yes, your Honour.
You said that you received a communication concerning something said by the Australian Government Solicitor or a document provided by the Australian Government Solicitor and that was concerning the notice of motion, I think, in relation to costs?‑‑‑Mm.
Who did you receive that information from?‑‑‑That was through Tavoularis.
Thank you. And what was that information?‑‑‑Basically that, you know, was I aware that this notice of motion had been issued, I think, and, you know, that they were going to apply to get costs. You know, if it were successfully dismissed, they were going to apply to get costs against Mr Brooke or against Arundel.
Thank you. Do you recall being given any time period within which to take some action concerning the notice of motion for removal to the High Court?‑‑‑Sorry, I’m not ‑ not with you there.
Do you recall that a communication might have come to you asking you to do something within, say, a week?‑‑‑No, I don’t recall anything like that.
You also – you gave an answer to his Honour in cross‑examination concerning what Mr Henke might have said to you during October, November and December and January. That is October to December 1999 and January 2000 concerning the prosecution of the notice of motion for removal to the High Court. Do you recall those answers?‑‑‑No, not – no, I don’t.
I think you said that you could not specifically recall any encouragement from Mr Henke to issue the notice of motion or to proceed with the notice of motion?‑‑‑No, nothing like that.
Do you say ‑ does that answer mean that you remember completely and clearly that you did not receive that encouragement?‑‑‑I don’t – actually, I don’t even remember clearly or, you know, but I don’t think there was any specific sort of – you know, there was no specific encouragement or anything like that. He would have been aware of it.
HIS HONOUR: What was your best – what was your best recollection?‑‑‑I know it sounds strange, your Honour, but I – my memory of that stressful time was not sort of particularly clear and I’m sort of wary of trying to, you know, say accurately what happened if it’s not accurate and I don’t want to sort of, you know, be getting myself in trouble or someone else in trouble if it’s not an accurate recollection.
Yes, Mr Slattery.
MR SLATTERY: Thank you.
But you certainly, as I – I am sorry, I withdraw the question. Do I take it then that you could not deny that you may have had conversations with ‑ ‑ ‑
MR MORRIS: Your Honour, I object to this…..cross‑examination.
HIS HONOUR: You cannot ask that sort of question in‑chief or re‑examination, Mr Slattery. That is pure cross‑examination.
MR SLATTERY: Yes, your Honour.
You were asked a question about the exhibit AB?‑‑‑Yeah, sorry.
That is the 459G affidavit?‑‑‑Mm.
You said that you had been discussing issues with Mr Brooke for a long time?‑‑‑Yes, yeah. I know he was aware of these same sort of issues that were raised in that affidavit.
And those were the issues that had been first, I think, promulgated to you by the ITR?‑‑‑That’s correct.
So that what you were discussing with Mr Brooke was, in fact, material ‑ ‑ ‑
MR MORRIS: I object, your Honour. That is not re‑examination either.
HIS HONOUR: That is right, Mr Slattery. He is your witness.
MR SLATTERY: I have taken the point as far as I can. Thank you.
I just want to ask you one more question in relation to the communication that you may have received in early January 2000 concerning the notice of motion through Tavoularis & Co. I want to show you a letter addressed to Arundel Chiropractic Centre Pty Limited, care of Tavoularis & Co, dated 12 January 2000. Could you look at that letter, please?‑‑‑Yes.
Do you recall having seen that letter before?‑‑‑Yes. Yes, I do.
Is that the letter you are referring to?‑‑‑Yes.
And when ‑ do you recall when you might have received that letter?‑‑‑Oh, it would have been sort of around about that time, you know, mid to late January.
Do you recall that the notice of motion which was issued in respect of the costs to be paid by Mr Brooke or Arundel that my friend asked you questions about was commenced after the date that you received that letter?‑‑‑No, I wasn’t aware that it was commenced after the date.
Do you have any recollection of that?‑‑‑No, I don’t. My ‑ I thought at the time that it was instigated before that – sorry, could you just go through that again? This – the ‑ sorry, the notice of motion was ‑ ‑ ‑
The notice of motion was for the solicitor, Mr Brooke, to pay costs?‑‑‑Okay. Yeah, yeah, yeah. Sorry.
And that was commenced on 19 January 2000, a week after that letter was sent?‑‑‑Yes. No, I was – I was aware of that notice of motion, yes.
Yes, thank you.
Your Honour, I have asked questions about that letter. I should tender it.
HIS HONOUR: Yes, all right. That will be exhibit AH. Let me just read it, Mr Slattery, please. Yes, all right. That will be marked AH. That is 12 January.
EXHIBIT:Exhibit AH Letter of 12 January 2000 to Arundel Chiropractic Centre
MR SLATTERY: No further questions, your Honour. I ask for the release of Dr Brown.
HIS HONOUR: Yes, you are excused?‑‑‑Thank you.
MR MORRIS: I notice that Dr Brown’s files are sort of spread out towards the other end of the Bar table. In my submission, apart from those documents that have been tendered, that should also go back to him. Amongst other things, the cheque for his conduct money seems to be amongst that.
HIS HONOUR: What is the position? Are you likely to want any of the other documents, Mr Slattery?
MR SLATTERY: I would ask to hold them for the moment, your Honour, until we have completed the other examination, but I will hold them at the Bar table.
HIS HONOUR: Right. Well, I am prepared to do that. I can make an order at the end. Perhaps you could give him his conduct money. Yes, you proceed please, Mr ‑ ‑ ‑
MR SLATTERY: Your Honour, I call on the subpoena addressed to the ITR.
HIS HONOUR: You can stand down and, indeed, you are excused from further attendance?‑‑‑Thank you, your Honour. Thanks, your Honour.
THE WITNESS WITHDREW
MR MORRIS: Your Honour, in answer to the subpoena addressed to my client, Marlene Elva Broadley is present in Court. She is the office manager of ITR. She is authorised by the chief executive to produce all relevant files as referred to in the subpoena.
HIS HONOUR: Is that a proper authorisation? I am not suggesting it is not, but “other proper officer” is, of course, the correct designation, but how is ‑ who is the “other proper officer” ascertained?
MR MORRIS: Your Honour, the case law indicates, putting it in general terms, that a “proper officer” is not one person in each company. For example, the “proper officer” of Westpac may be the manager of the local branch or the State manager or the records keeper. It is a person who ‑ ‑ ‑
HIS HONOUR: It depends on the circumstances.
MR MORRIS: A person who is familiar with the books and records of whatever it is that is sought. The reason that this lady comes forward is that, on my instructions, ITR’s office administration is divided into various sections. There is a section that handles current matters involving disputes with the Australian Taxation Office; there is an accounts section and general clerical section and so on. Mrs Broadley apparently is the person who has collected and obtained all of the files. Some of them were handed to her by the head of the legal section.
HIS HONOUR: She responds to the subpoena and she has a number of documents.
MR MORRIS: Yes.
HIS HONOUR: Do you want her sworn, Mr Slattery?
MR SLATTERY: Yes, thank you, your Honour.
MARLENE ELVA BROADLEY, sworn:
HIS HONOUR: What is your full name, Mrs Broadley?‑‑‑Marlene Elva Broadley.
And where do you reside?‑‑‑In Cranbourne North in Victoria.
Yes, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
Ms Broadley, you are here in answer to the subpoena issued to the Institute of Taxation Research. Is that correct?‑‑‑Yes, that’s correct.
What is your position with that company?‑‑‑I’m the office manager.
And what are your duties as office manager?‑‑‑Provide all administration functions, facilities management, looking after certain members of the staff, not all, all the bookkeeping records and in general seeing that the office runs smoothly in the basic administration issues.
And do you have knowledge, for example, of the contracts entered into between the ITR and its clients?‑‑‑No, that is handled by the marketing department. That is one department of – there’s two departments I do not oversee and that is one of them.
And who oversees that department?‑‑‑That is run through Lance Miller.
Lance Miller, who is a director here in Queensland, is he not?‑‑‑Yes, that’s correct.
HIS HONOUR: How many people work for the company, Mrs Broadley?‑‑‑Now, probably about eight.
And where do they have – where does the company have offices?‑‑‑Basically, ITR itself is only domiciled in Victoria, in Melbourne.
And do you work in Brisbane or Victoria?‑‑‑No, I work in Victoria.
Victoria. And are there any, to your knowledge, qualified lawyers employed by ‑ ‑ ‑?‑‑‑Yes, there are. Mr Ian Murphy is a registered solicitor and practising in the State of Victoria. He is the gentleman who handed me these legal files yesterday.
Is he an employee of the company, do you know? If you do not know, you do not say, but if you do know tell me?‑‑‑To the best of my knowledge, yes he is. He’s an employee.
All right, yes. You continue, Mr Slattery.
MR SLATTERY: Thank you.
And do I take it then that only Mr Miller would know of the relationships between ITR and its particular clients?‑‑‑He does have a young – a lady works for him down in Victoria.
Who is that?‑‑‑Her name – I’m not really prepared – I’m not here to give this sort of information.
MR MORRIS: Your Honour, I object. I object.
HIS HONOUR: What is the basis of your objection?
MR MORRIS: Well, it is not relevant, your Honour. We are here for one issue and that is whether my client pays costs. Who within the company has particular information is not relevant to that.
HIS HONOUR: Well, I think it might be, Mr Morris.
THE WITNESS: I have ‑ ‑ ‑
HIS HONOUR: Please, do not speak?‑‑‑Sorry. I apologise.
I am not satisfied that that is so and having regard to – I will not ignore the realities of the fact that Mr Slattery is examining in‑chief but that he is examining a person whom you have proffered as the proper person to respond to the subpoena and a person who may know some of these matters.
MR MORRIS: If your Honour pleases, I am sorry.
HIS HONOUR: You continue, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
I think the question I was trying to put to you was in relation to the knowledge of the relevant officer within the ITR about the relationships between the ITR clients and the ITR and I think your answer was that was Mr Miller?‑‑‑Yes, he is head of the – he is director of marketing.
And he resides in Queensland?‑‑‑That’s correct.
And he is the person, is he, who knows all about what transpires between clients and the ITR in relation to, for example, the particular objections that might be raised to demands issued by the Deputy Commissioner of Taxation concerning tax outstanding?‑‑‑Well, I never got involved in those areas. It is none of my concern. I have my designated area and I am just told to keep out of these areas, that it is – you know, I’m not involved in those areas.
Are you positively excluded from those areas?‑‑‑Yes, positively. I do not even know what the girls do because they do not report to me and I was ‑ ‑ ‑
Did you have any – sorry. Did you want to say anything else?‑‑‑I was just asked or requested to bring these documents up here as per the request in the subpoena.
Who requested you to bring them?‑‑‑They were handed to me, as I said, by Mr Murphy, who is the solicitor, and asked to bring them up here and I believe that Mr Henke asked Murph to give them to me.
Right. Why do you believe that?‑‑‑Well, Mr Henke is the CEO and I’ve – all the legal information goes to him. He would have received, or his secretary would have received, the subpoena to bring the documentation here today.
Did you have a chance to have a discussion with Mr Henke about the fact of you answering the subpoena and not him?‑‑‑No, I did not. I was just asked to do it because he had other issues and he thought as there was only the documentation that was required I could just as easily bring it up here.
When did you ‑ did he tell you that, that it was only documentation required?‑‑‑I was just asked, that’s all. They just said that the subpoena asked for documentation, “Can you please take it to Brisbane and see that it is delivered to the Court?”.
And when were you asked to do that?‑‑‑Yesterday.
HIS HONOUR: It was only a subpoena duces tecum, was it not?
MR SLATTERY: Yes, your Honour, yes. But the rules are also quite clear, your Honour, with respect to my friend.
HIS HONOUR: Well, what rule?
MR SLATTERY: The rules in relation to examination of persons answering subpoenas duces tecum.
HIS HONOUR: Yes, but Mr Morris does not submit to the contrary, but this lady is only here to produce documents. If you can get other information from her, of course you can, but it can hardly be a reflection upon her in responding to a subpoena duces tecum that she may or may not know certain matters.
MR SLATTERY: No. Your Honour, the purpose of my questions is, in fact, quite the opposite. I would not cast any aspersion upon Mrs Broadley.
HIS HONOUR: No.
MR SLATTERY: It is quite the opposite.
HIS HONOUR: Yes.
MR SLATTERY: And I should make that quite clear.
HIS HONOUR: No. You go ahead, Mr Slattery.
MR SLATTERY: Thank you.
Mrs Broadley, did you make any inquiries at all in relation to the documents that you brought with you?‑‑‑It was explained to me that they were legal files and that they were to be brought here today. I have not opened them, looked in them. I have no knowledge of the contents.
Did you make any inquiries in relation to the contents of the documents?‑‑‑No.
Did you see the subpoena before you came here?‑‑‑No.
HIS HONOUR: What do you say your job is exactly for the ITR?‑‑‑I am the office manager but I look after purely the administration facilities management, like receptionists.
Do you have nothing to do with the ‑ ‑ ‑?‑‑‑I have nothing to do with the legal department.
No, let me finish, please. Do you have nothing to do with the preparation, collation, organisation or filing of the documents that you produced?‑‑‑No, sir, I don’t.
Well, who does?‑‑‑Well, it varies because it will have gone from marketing from an initial inquiry for a client, then it goes through to our section that handles the ATO correspondence and then if it turns into a legal argument it ends up in our legal department.
I do not quite understand why this lady is the proper officer then.
MR SLATTERY: Yes. Yes, it would be our submission she is clearly not the proper officer, your Honour, and is not a proper answer to this subpoena and, in fact, we would put the proposition as a deliberate evasion of the obligations under the subpoena, having, your Honour, just heard the evidence that you have.
HIS HONOUR: Well, she has said that she has had nothing to do with the organisation or filing or ‑ ‑ ‑
MR SLATTERY: She could not have made an inquiry which could have satisfied her that she had satisfied the requirements of the subpoena.
HIS HONOUR: What do you say about that, Mr Morris?
MR MORRIS: Your Honour, I have certain instructions, but if my learned friend is asking you to rule on it, I would request that there be a voir dire so that I can cross‑examine to bring out the issues that I say do make this witness a proper officer to respond to the subpoena.
HIS HONOUR: What do you say about that, Mr Slattery? It is a bit hard to say because you do not know.
MR SLATTERY: Yes. I do not know.
HIS HONOUR: Mr Morris, you explain to me how a person who has nothing to do with the preparation, collation, organisation, filing or recording of the information contained in these documents could possibly be the proper officer to produce them. Would you make a submission to me on that basis, because at the moment I am not minded to allow you to cross‑examine on it. The evidence as far as it goes seems to me to establish that this lady may not be – I have not formed a concluded view about it – but may not, in fact, be the proper officer. I do not see how a person who really is as remote from the documents in any relevant respect as anybody could be can possibly be a proper officer to make the inquiries and to satisfy herself that the documents are truly responsive to the subpoena.
MR MORRIS: Your Honour, I cannot respond to your Honour’s question on the evidence that has come out. There is no answer I can give to your Honour’s question.
HIS HONOUR: Very well. I will not rule on it at the moment because you will be given an opportunity to cross‑examine, so I will not rule on that at the moment.
MR MORRIS: Thank you, your Honour.
HIS HONOUR: But I have indicated to you what may appear to be a problem, depending upon what emerges.
MR MORRIS: Yes.
HIS HONOUR: You go ahead now, Mr Slattery.
MR SLATTERY: Thank you, your Honour.
Mrs Broadley, I want to ask you some questions about your knowledge of the subpoena arriving at your office. Did you have any knowledge of that?‑‑‑I knew that one had arrived.
Yes, and did you know that an airline ticket had been provided as well?‑‑‑I did hear about it yesterday.
Who told you about that?‑‑‑It was some ‑ they were reading the notice in the office. I think it might have been Mr Henke himself.
Yes. Did Mr Henke tell you that a Qantas Airways ticket had been issued in his name for him to attend?
MR MORRIS: I object, your Honour. This is not relevant to any matter.
THE WITNESS: He didn’t say whose name.
HIS HONOUR: Well, I do not know yet. I am not satisfied that it is not and I am going to allow Mr Slattery to continue.
THE WITNESS: He did not mention if it was in his name or anybody’s name. He just said there was – I heard him talking to somebody else and he said an airline ticket was there.
MR SLATTERY: Did you use that airline ticket when you came from ‑ ‑ ‑?‑‑‑‑No, I did not, sir.
Is there any reason why you did not?‑‑‑There is actually. Yesterday was my birthday and I had a dinner date last night which I didn’t want to cancel.
Right?‑‑‑So I got up at 4 o’clock this morning to come up this morning.
Thank you for doing that and I hope you had a happy birthday?‑‑‑Thank you.
But the fact remains that it was Mr Henke who directed you, was it?‑‑‑Yes, he told me that Murph would be giving – Mr Murphy sorry – would be giving me some files and would I please bring them up here today.
And you made no other inquiry apart from that?‑‑‑No. I just do as I’m told. Can I just go back to one thing when you said I had no relation to the files? I do. It is my role to see that the office systems are run, so the files, they were already created when I joined. I do have a girl who works part time who comes in to do all office filing, so I oversee her, but I do not read the files. I have no idea of the content.
HIS HONOUR: But that merely involves her putting the correspondence and the letters in ‑ ‑ ‑?‑‑‑That’s right. It’s coded by everybody in the place and she files it.
She just puts them in ‑ whatever comes in in chronological order on the relevant file?‑‑‑That’s correct, and that’s the only – that’s the attachment I have to the filing. It’s just to make certain that filing is kept up to date.
Right, thank you.
MR SLATTERY: How many people are in your section of the ITR?‑‑‑I had two – one, two – two girls working under ‑ under me and a part timer.
Yes, and are those persons in the same position as you, that is they know as much about the files as you do?‑‑‑That’s correct.
Right?‑‑‑One is the receptionist and has other duties and the other one just helps out with general typing and around the place that may need to be done.
Yes, and so that it would be the case that the people in your section know least of anybody about the business of ITR?‑‑‑That would be correct.
And you could not say, could you, whether what you have in that bag there is, in fact, an answer to this subpoena?‑‑‑I was told it was. This was all the ‑ by Ian Murphy, who is the registered solicitor, that this was the information that was required by the subpoena and this was what I was to bring and it was a complete set of files.
But, putting my question again, you do not know, do you, that what you have in your bag is, in fact, in answer to the subpoena, except for what you ‑ ‑ ‑?‑‑‑I can’t say for sure, but I believe it is.
HIS HONOUR: You can only say what you have been told. Is that right?‑‑‑That’s right. I believe it is.
That really was not responsive to your question, the volunteering of what she had been told.
MR SLATTERY: No.
HIS HONOUR: And I propose to ignore it. The state of her personal knowledge is she has no idea whether the material is responsive or not.
MR SLATTERY: Yes.
HIS HONOUR: That is the way I will proceed.
MR SLATTERY: Thank you, your Honour. Your Honour, I am at the crossroads. It would be my submission that there has not been a proper answer to the subpoena.
HIS HONOUR: Well, I will not rule on that. I am going to give Mr Morris an opportunity to cross‑examine first.
MR SLATTERY: Yes.
HIS HONOUR: And then I will give both of you an opportunity to make submissions on that and I will rule on it.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: Mr Morris.
CROSS‑EXAMINATION BY MR MORRIS:
MR MORRIS: Thank you.
Mrs Broadley, when a new file is opened within the office of ITR, who is responsible for opening the new file?‑‑‑The marketing department ‑ ‑ ‑
All right?‑‑‑ ‑ ‑ ‑ if it applies to new clients.
If it applies to new clients?‑‑‑Yes.
All right. And where are the files then stored within the office?‑‑‑We have a central filing system which is sort of more or less type of in the middle of the area.
Yes?‑‑‑So that anybody who needs to access them can access them at the time.
And in whose department is that central filing system?‑‑‑Well, at the moment it is sitting in the general admin area.
Right?‑‑‑Because we are using it as dividers as well.
So that is your area, is it? It is in your ‑ physically in your area of duty?‑‑‑Yes, more or less in my area, yes.
All right. And it is your staff who actually put things in and take them out of that?‑‑‑Yes.
Right. Now, you were asked questions about other people’s knowledge. Let us go through it department by department. Mr Miller, we have already heard is in charge of the marketing department?‑‑‑That’s correct.
Would he know anything about documents in files relating to the legal department or to some other department?
HIS HONOUR: How can she answer that, Mr Morris.
THE WITNESS: I don’t ‑ ‑ ‑
HIS HONOUR: No, do not answer that, please. How can she possibly answer that?
MR MORRIS: I will rephrase it, your Honour. Yes.
Within the ordinary course of office administration does anyone from marketing have access to documents in other sections of the office?‑‑‑Yes, they do.
All right. And how do they get that?‑‑‑Well, you know, if, say, a client rings up and they quote their number and if it’s required to give an answer like “Did you receive my fax?” or something, it can – that file can be looked at to say, “Yes it is filed. We received it.” And then follow it through.
Right. You mentioned earlier about the files as were moving from one department to another?‑‑‑Well, this is it. As it changes its status, as I said, if it gets to legal, it can move within the legal department to a couple of people.
Right?‑‑‑Depending on who’s working on it and what they’re doing.
But does it then move from one department to another?‑‑‑After they’re finished with it they put it back in the filing cabinets.
All right. So it comes back again physically to your part of the office?‑‑‑Yes.
Right. Are there any files, as it were, archive files, historic files, kept anywhere apart from the repository in your part of the office?‑‑‑No, because the general day‑to‑day running files are also in my section.
All right. The question was asked whether there are any files in the office relating to, for example, a client called Arundel Chiropractic Centre Pty Limited. Where would any such files be kept?‑‑‑Well, if you – most of the people who deal with them, they’ve got pretty good memories and they remember numbers. I, myself, don’t know so I would look it up in our database, find out what the client number was. If there was no one there that could answer their question, I’d go and get the file out myself purely to look at that.
Yes?‑‑‑But in nine time ‑ cases out of ten I would pass it through to marketing with the phone message to handle it.
Well, that is assuming it is a marketing matter?‑‑‑Yes, or ‑ or to legal if it was a legal matter.
If it is a legal matter?‑‑‑Yes.
What about where a client’s history with ITR has been through various departments where it started off in marketing?‑‑‑The whole file is contained in – we had two separate ones.
Yes?‑‑‑One is done in like your normal manilla buff folder and this is before it gets to a legal part. When it gets up to legal there is a red folder as well. So the general accounts come, ordinary inquiries, whatever, are kept in one, but all legal files – but they’ve both got the same number. There are two separate cabinets. One has the general files and one has the legal matter files.
The legal file in the red folder would be something over which staff in the legal department would access on a regular basis?‑‑‑Fairly regularly, yes.
Who is in charge of that department?‑‑‑Well, it is sort of Ian Murphy and it consists of one secretary and ‑ ‑ ‑
Just who is in charge is enough for the moment. Mr Murphy is in charge of that, is he?‑‑‑Yes, technically, yes.
All right. Then the buff folder might relate to marketing matters?‑‑‑Mm.
Or it might relate to another department?‑‑‑That’s correct.
What other department might it relate to?‑‑‑Accounts, because I paid the accounts and so any account I may have paid and a notation would go into that file.
Who is in charge – we have heard, Mr Miller is in charge of the marketing?‑‑‑Mm.
You are in charge on the accounts?‑‑‑Yes.
Is there someone – we know Mr Henke is chief executive over the whole company, but is ‑ ‑ ‑?‑‑‑The administration director I report to.
Right, okay. Is there anyone within the company who has day‑to‑day access, who in the ordinary course of their business has access to both the marketing files in the buff folders, the legal files in the red folders, the account files, and so on? Is there anyone who is a generalist, if you like, who deals with all of the departments?‑‑‑Only this girl I have come in on a part‑time basis to do the filing. She would access all over the place to put the file ‑ ‑ ‑
HIS HONOUR: Now, Mrs Broadley, that really – surely the chief executive could go and get any file ‑ ‑ ‑?‑‑‑He can help himself.
An no doubt does from time to time, any file. Is that right?‑‑‑Mm, and so would his secretary.
What about Mr Murphy and the other gentleman, Mr Miller? They go from cabinet to cabinet?‑‑‑They usually ask the girls to get them.
But they can get them themselves?‑‑‑They could, yes.
And they do from time to time?‑‑‑They usually ask the girls, sorry.
Yes, that is unfortunately still the role of some employed women, but, Mrs Broadly – “unfortunately” I emphasise – I take that occasionally these gentlemen condescend to get a file out of a cabinet themselves. Is that right?‑‑‑I’m sorry, your Honour, they come to me to put a light globe in.
What do you do - - -?---I put the light globe in.
What do you do, open the cabinet and find the file for them?‑‑‑They don’t ask me to find files. They ask the other girls to do that.
MR MORRIS: If Mr Henke were here at the moment, would he know anything more about he filing system than you do?
HIS HONOUR: Do not answer that.
MR SLATTERY: I object to the question, your Honour. You cannot possibly answer that question.
HIS HONOUR: No, I will not allow that question, Mr Morris.
MR MORRIS: Well, your Honour allowed my learned friend to ask the witness in evidence‑in‑chief whether Mr Henke had a more general knowledge of things.
HIS HONOUR: Did you object to that question?
MR MORRIS: No, I did not, your Honour, because I wanted to pursue the matter in cross‑examination.
HIS HONOUR: Perhaps you should have objected. I am not going to allow that question.
MR MORRIS: I will, with respect, ask another question to which I imagine your Honour will also uphold the same rule.
HIS HONOUR: Do not answer it until we hear Mr Morris’ question.
MR MORRIS: Is there anyone in the office who has more knowledge of the filing system than you do?‑‑‑Yes. Mr Henke, Mr Henke’s secretary.
How does Mr Henke have more knowledge?‑‑‑Because he deals with a lot of these matters. He gets with a solicitor and they go through these matters together.
I thought you said he never takes a file out of the cabinet?‑‑‑He’d get his secretary to do it.
All right. I am asking about actual knowledge of the filing system ‑ ‑ ‑?‑‑‑Of the system itself, not the contents.
Exactly?‑‑‑I apologise. The system we all know about. The contents we don’t.
Mr Henke does not know about the system, does he?
MR SLATTERY: I object to that question.
THE WITNESS: It wouldn’t be hard to work it out.
HIS HONOUR: Yes, I will not allow that question, Mr Morris. Frankly, I think if a negative answer were given or if there were agreement to the proposition, I would find that very, very difficult to accept because it would be an affront to commonsense.
MR MORRIS: To your knowledge, does Mr Henke ever himself handle the process of searching for files relevant to a particular issue?‑‑‑He doesn’t handle the process of searching for then, no.
Thank you. Is there any other officer of the company, to your knowledge, who regularly handles the process of searching for files relevant to a particular issue?‑‑‑His secretary would do it and Ian Murphy would do it, but he would ask someone to do it for him.
I have nothing further, thank you, your Honour.
HIS HONOUR: Approximately how many files do you think there might be current at any one time?‑‑‑I don’t know if they’re all current, but we have about seven filing cabinets and they’re all filled in like this. We try to do it on a “50 in a drawer” basis, so I’d say approximately 500, maybe 600.
That would not call for a very complicated filing system, I would not think?‑‑‑No, your Honour. The actual physical filing of the documents, yes, but not the folders themselves.
What do you do? Do you have a book or a numbering system or what do you have?‑‑‑Yes, we have a numbering system on the computers. We have a database which we can access.
And then they should all be in their place in numerical order in some way?‑‑‑Yes, that’s correct.
Yes, all right. Did you want to ask any questions arising out of what I just asked?
MR MORRIS: No, thank you, your Honour.
MR SLATTERY: No, thank you, your Honour.
THE WITNESS WITHDREW
HIS HONOUR: This lady has brought documents. Should we not have them marked for identification?
MR SLATTERY: Yes, your Honour, because I would not lose the opportunity at least of looking at those.
MR MORRIS: Either it is compliance with the subpoena or it is not, your Honour. My learned friend cannot have it both ways, take what he thinks might help him and then object to the rest.
HIS HONOUR: No, I do not think that is right, Mr Morris. What this lady has is brought in purported response to the subpoena. It may or may not be complete or adequate or, indeed, even a correct response, but for present purposes it is what your client has brought forward. In those circumstances, I will admit the documents for identification, not into evidence, and I will give both sides access to them.
MR MORRIS: I take it your Honour has already made up your mind about the latter part without hearing my submissions.
HIS HONOUR: No, I will hear you. What do you want to say, Mr Morris?
MR MORRIS: Your Honours, this is plainly a fishing expedition. My learned friend comes here on evidence that does not show that ITR had any involvement whatsoever with the proceedings in this Court. He calls as his first witness – and he calls him – Dr Brown, who tells your Honour in the clearest possible terms that it was his decision, he instructed lawyers, he relied on his lawyer’s advice to bring the motion. There was not encouragement, there was no formal advice, there was no assistance ‑ ‑ ‑
HIS HONOUR: You are really making, I think, your closing submission to some extent, are you not?
MR MORRIS: To some extent, your Honour.
HIS HONOUR: I think I understand what your proposition will be. It is fairly clearly elucidated in your written outline. Let me accept for present purposes – for purposes of argument that perhaps Dr Brown’s evidence and the other evidence does not establish such a link as would lead me to make an order for costs. Mr Slattery has not closed his case yet.
MR MORRIS: No, he has not, your Honour, but what he is seeking to do by this process is to conduct, as I say, a fishing expedition. He has subpoenaed my client to produce his documents to support a notice of motion that he filed, or those who instruct him filed, back on 15 August. Either they had a basis for it then or they did not. They cannot file a notice of motion on 15 August hoping, like Mr McCorber, that something will turn up.
HIS HONOUR: Mr Morris, one hears regularly – indeed, one has made the submission oneself – that someone is on a fishing expedition, but in a sense, at least non‑party inspection and discovery answers, that sort of description ‑ ‑ ‑
MR MORRIS: Yes, it does.
HIS HONOUR: I am not unmindful of the fact that your client is a party to this notice of motion. I do not know, would I have power to grant discovery, order discovery, on an application inter partes of this kind?
MR MORRIS: My client is named as a respondent to the notice of motion. One of the issues before your Honour is whether it should become party to proceedings in the Court.
HIS HONOUR: Well, there are plenty of cases in which courts have ordered discovery even before action.
MR MORRIS: That is so, your Honour, and one of the safeguards which exists in that context is that the party seeking that form of discovery has to identify the issues and satisfy the Court that it is not merely fishing in the sense in which, I think it was Justice Owen in the Supreme Court of New South Wales defined “fishing” as meaning wishing to cast a net in a particular pond to see whether fish are there or not, which is really quite exactly what my learned friends are seeking to do here. Your Honour can see that ‑ ‑ ‑
HIS HONOUR: What about if there is a fairly fishy smell around which one might infer exists from the extraordinary coincidence between what your client is disseminating and what crops up in the documents and, indeed, the relationship between your client and your client’s agent, Dr Brown, the company that he controlled being also a party to these proceedings? Courts do not close their eyes to a combination of facts which are highly suggestive of a situation.
MR MORRIS: Your Honour, I am not asking you to close your eyes to anything. With the greatest respect, I am asking you to open them to the fact that the case we come here to answer, so far as it has been formulated with any precision or clarity, is a case that my client should bear the costs of these proceedings on an indemnity basis because, as it is said, we professed expertise, formally advised, assisted the party, encouraged it and so on. That is the language of our learned friend’s submission. Our learned friend has called, as his own witness, a man who says none of that happened.
Now, I do not doubt for a moment what Dr Brown said, that he expected and anticipated and so on that his solicitor would draw on the resource of the published information put out by my client.
HIS HONOUR: You might very well turn out to be right about that in the end, but Mr Slattery has not yet exhausted his attempt to prove otherwise and he is attempting to prove it to this witness. Now, he might ask me to draw inferences - indeed, I am sure he will - from who has come along to produce the documents and possibly he may even ask me to draw inferences from the documents that are produced, assuming that they can get into evidence or he can in some way make them relevant. But all we are dealing with now is whether these documents should be marked for identification.
MR MORRIS: I am not objecting to their being marked. I am objecting to my learned friend being given the chance to rifle through them to see if he can find something to bolster up a case which, so far, he has not been able to make out to contradict the evidence of the one witness he has put up as a witness of truth.
HIS HONOUR: All right. Now, do you want to make any further submissions?
MR MORRIS: No, your Honour, those are my submissions.
HIS HONOUR: All right. I will mark the documents for identification.
MFI: MFI…..Documents
I do not need to hear from you, Mr Slattery. I will make an order that both parties can have access to them. Now, where do we go from here, Mr Slattery?
MR SLATTERY: Your Honour, it would be our submission that it is plain as a pikestaff that the proper officer to answer this subpoena is Mr Ian Henke and we would wish to take your Honour to the affidavit of ‑ ‑ ‑
HIS HONOUR: All right. Now, assume that I were to think that that is so, or indeed that this lady was not the appropriate officer. What is the next step then?
MR SLATTERY: It would be to – I am not absolutely sure, your Honour, but I think it would be to ‑ ‑ ‑
HIS HONOUR: Would you want the matter adjourned or what?
MR SLATTERY: I can only ask for an adjournment to an occasion when Mr Henke could be available here to answer the subpoena.
HIS HONOUR: All right. I think at this stage I should hear argument from both of you as to whether this lady is the proper officer or not. Assume that I were to hold that this lady is the proper officer for the purposes of producing the documents, do you want an adjournment then to subpoena Mr Henke?
MR SLATTERY: Yes, your Honour, because it is plain that the person with the knowledge concerning the matters which are disclosed on the face of the subpoena is Mr Henke and that Mrs Broadley, with all respect to her, is the person with the least amount of information about the vital issues in this case.
HIS HONOUR: I think, perhaps, you should make a judgment about what you want to do, as to whether you want an adjournment or not.
MR SLATTERY: Yes. Could I have the opportunity to take some instructions on the point, your Honour?
HIS HONOUR: Yes. I will have to hear Mr Morris on all of these matters, of course.
MR SLATTERY: Yes.
HIS HONOUR: But I think you had better decide what you want to do. Yes, you take instructions.
MR SLATTERY: Thank you, your Honour. Excuse me. Your Honour, I have instructions and they are that I am instructed to require – or seek an order of the Court for Mr Henke to attend to give evidence on the basis of our submission that he is plainly the proper officer of the ITR and the person who properly should have answered the subpoena and, to that end, we would need to make arrangements with the Court, and through the Court, for the requirement for Mr Henke to attend to give evidence to the Court.
HIS HONOUR: You would need leave of the Court to issue a subpoena to Mr Henke personally, would you not?
MR SLATTERY: I would, your Honour.
HIS HONOUR: Is that what your application is now?
MR SLATTERY: That is my application, your Honour.
HIS HONOUR: But you are saying that is a conditional application or is it – when I say that, conditional upon my ruling that this lady is not, or is, the proper officer?
MR SLATTERY: Yes.
HIS HONOUR: You have to make up your mind what you want to do, whether you want to ‑ ‑ ‑
MR SLATTERY: Our submission would first be that Mrs Broadley is not the proper officer and we ask your Honour to rule on that matter. But, in
any event, we say that even if your Honour has ruled on that basis, that would only be the proper officer for the purposes of some of the material. We are not satisfied – the Court could not be satisfied, we would say, that a proper inquiry has been made to answer the subpoena because the witness simply cannot say that.
HIS HONOUR: Can you refer me to some authority on this point?
MR SLATTERY: Not at my fingertips, because I did – can I just tell your Honour why. Can I ask your Honour to take up an affidavit of ‑ ‑ ‑
HIS HONOUR: There is one matter that does concern me, Mr Slattery. I think before the subpoena was issued there was an awareness on the part of your client that Mr Henke was the Chief Executive, is that right?
MR SLATTERY: Yes, that is correct.
HIS HONOUR: And as Chief Executive, it is highly likely that he would answer the description of proper officer, even if other people might also answer that description as a proper officer.
MR SLATTERY: Yes, I could not put anything different than that, your Honour.
HIS HONOUR: There seems to have been an assumption made by buying an airline ticket for Mr Henke personally, I gather from your question, that he would respond to the subpoena, although it was not addressed personally to him.
MR SLATTERY: Yes. As we understood the Rules, the appropriate step was to subpoena the proper officer. As a matter of fact, I think it is plain that Mr Henke was the proper officer and, yes, the assumption was made that he would be the person answering the subpoena.
HIS HONOUR: Usually the company secretary is the proper officer, usually, but not always.
MR SLATTERY: Yes.
HIS HONOUR: All right. I will hear Mr Morris on this.
MR MORRIS: Your Honour, we have reached this point for a simple reason. Those who instruct on the other side - of course, none of this is directed to my learned friends – but those who instruct on the other side decided to play a little game. They applied in chambers for leave to issue a subpoena on the basis that it was only going to be a subpoena duces tecum to produce documents, but they hoped thereby to achieve the same result with Mr Henke as they achieved with Mr Brown of getting him through the door of the Court and then putting him in the witness box and conducting an examination which, as I have already submitted, amounts to a fishing expedition.
The question whether or not this lady happens to be the proper officer is not the issue. If your Honour is against me on that, then we may come back next time with a different proper officer. It may be Mr Murphy, the solicitor; it may be Mr Miller, the head of marketing; it may or may not be Mr Henke. If those on the other side were candid about the situation and said they wanted to cross-examine Mr Henke and wanted ‑ ‑ ‑
HIS HONOUR: Wanted to examine Mr Henke.
MR MORRIS: Wanted to examine him and wanted to apply for a subpoena not as a subpoena duces tecum but as a subpoena ad testificandum, then we would not be in this situation.
HIS HONOUR: Mr Morris, I am concerned that this lady is not the proper officer. It may well be that Mr Henke may not be, or may not exclusively be, the proper officer. We probably have not heard enough evidence to enable me to say with finality, or to make an order in that respect at this stage. I doubt it. It seems to me to be almost irresistible that this lady is not the proper officer. Do you submit to the contrary?
MR MORRIS: I do, your Honour ‑ ‑ ‑
HIS HONOUR: Because if you do, I would really like to get some authority on it, Mr Morris.
MR MORRIS: I do in this sense, your Honour. As I understand the case law – and I have not come with it at my fingertips, like my learned friend – but as I understand the case law, a proper officer is not necessarily someone who has personal knowledge of the files.
HIS HONOUR: No, and I do not suggest – a proper officer is somebody who is more than the supervisor of a couple of filing clerks.
MR MORRIS: In my submission, when the cases deal with institutions like banks and insurance companies and so on, they make the very point that the person in charge of the filing clerks is much more likely to be able to make an exhaustive search than the managing director or the chief executor or the company secretary.
HIS HONOUR: Yes, but that assumes that the person in charge has a knowledge of the contents of the documents. This lady has said she does not.
MR MORRIS: She does not have a knowledge of the contents, but she has a knowledge of the system, and that is my point.
HIS HONOUR: Could I just see the subpoena duces tecum that is addressed to this lady, please, Mr Associate. You might have it handy, Mr Slattery. Indeed, the subpoena has probably been produced to Mrs Broadley, has it? The problem, it seems to me, Mr Morris, is that this lady was simply handed the files and told to bring them up. She did not make any independent investigation or inquiry, anyway.
MR MORRIS: I accept, your Honour, that what occurred was not a proper process. But if one distinguishes the issue from who is the proper person to undertake the process and whether or not the process was properly undertaken, she is a proper person who could have gone through the files to see that everything was there. I accept that that was not done and, in that sense, the Court and our learned friends do not have to accept what has been produced as an exhaustive compliance with the subpoena. But the issue of whether or not this witness is a proper person is a futile issue to determine because, even if your Honour says that this lady is not, it is not going to achieve our learned friend’s ulterior objective of getting Mr Henke into the witness box, unless your Honour were able to, and plainly your Honour is not able to, decide that Mr Henke is the only person who could be a proper officer.
The solution to our learned friend’s dilemma is to come clean about it and say they have wanted all along to serve a subpoena ad testificandum on Mr Henke and they would now like to make that application which they previously dressed up as an application for leave to issue a subpoena duces tecum.
HIS HONOUR: I suspect their evidence does go far enough to identify Mr Henke as a proper officer.
MR MORRIS: As a proper officer, but if ‑ ‑ ‑
HIS HONOUR: So that if a subpoena were addressed to him to produce the documents, it might be very difficult for him not to respond to that subpoena.
MR MORRIS: That is certainly right, your Honour, that is certainly right. Although I do not imagine for a moment that your Honour would be encouraging the abuse of process involved in serving someone with a
subpoena duces tecum with the intention all along that it will have effect as a subpoena ad testificandum.
HIS HONOUR: I might – I suppose I could serve a subpoena that was both.
MR MORRIS: Yes, and that is what they should have done.
HIS HONOUR: Do I take it that you are not submitting that this lady is a proper officer?
MR MORRIS: I make the submission that she is a proper officer. I cannot submit that there has been proper compliance with the subpoena because she has been perfectly frank in saying that she has not done the checks that a proper officer is required to do. And that is plainly not her fault and she plainly cannot be criticised for the fact that her superior, Mr Murphy, did not explain to her what she should do in order to prepare herself to give evidence.
HIS HONOUR: All right, thank you, Mr Morris.
Mr Slattery, I am satisfied that you have not had a proper response to your subpoena, that you were entitled to have a proper response to it, but on the evidence this lady clearly is not in a position at present, at any event, to respond properly to your subpoena. Now, it is a matter what you want to do, and I so rule.
MR SLATTERY: We are in the position, your Honour, where we would wish to be assured, first of all, that there has been a proper answer to the subpoena. I think my friend is perfectly right when he says that he cannot put a submission there has been a proper answer.
HIS HONOUR: I have ruled that there has not been a proper response. It is now a matter for you what you want to do. Do you want to go on with the case? Do you want to adjourn it or what do you want to do?
MR SLATTERY: No, we would seek an adjournment of the matter, your Honour, for the opportunity to issue a subpoena to Mr Henke. We would say, of course, he is ‑ ‑ ‑
HIS HONOUR: I will have to see – you need the leave of the Court, do you not?
MR SLATTERY: Yes, and that would be ‑ ‑ ‑
HIS HONOUR: Either some other Justice or myself will have to see the form of subpoena proposed before you could have that leave. I do not think any Judge would give it to you in a vacuum. We would have to see the subpoena.
MR SLATTERY: I understand that, your Honour.
HIS HONOUR: But you tell me that in view of the fact that you have not had a proper response, as I have ruled, to your subpoena, you want the matter adjourned to consider your position and, perhaps, to seek the leave of the Court to issue another or other subpoenas, is that your position?
MR SLATTERY: That is correct, your Honour. That is our position.
HIS HONOUR: Yes. What do you say, Mr Morris, about that?
MR MORRIS: My learned friend can have his adjournment if he wants it. It is his application. We do not mind how often it gets adjourned….question of costs.
HIS HONOUR: Yes. All right. I will grant you the adjournment, Mr Slattery. I am conscious of the fact that it is 10 past 4 and the matter would not have concluded today, anyway. In those circumstances, I am minded to reserve the costs.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: Do you have any different submission, Mr Morris?
MR MORRIS: I do not see it otherwise, your Honour.
HIS HONOUR: Mr Morris, I do not want to lose sight of the case, in terms of setting a date, but we are fairly heavily engaged in October. We have to go to Perth as well as sit in Canberra. I am just not going to have an opportunity to sit on this matter in October, Mr Slattery.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: Unless - perhaps we could adjourn it – I do not know – to Canberra, but that would be expensive for everybody.
MR MORRIS: I think my learned friends – one of them comes from Canberra and the other from Adelaide, so I suspect the balance of costs is going to be no different if your Honour hears the matter in Canberra or in Brisbane.
HIS HONOUR: Yes. What is your position in that regard, Mr – your client seems to carry on its principal business in Victoria.
MR MORRIS: My client is based in Melbourne, yes.
HIS HONOUR: It is probably best if I adjourn the matter at this stage to a date to be fixed, but conscious of the fact that it ought not to be allowed to go on any longer than it has to. We may decide to hear it in the national or some other capital of Australia.
MR SLATTERY: We will accommodate as best we ‑ ‑ ‑
HIS HONOUR: Where are you from precisely?
MR SLATTERY: Adelaide, your Honour. Ms Ebbeck is from Canberra. We have no difficulty with the matter being heard in Canberra or Adelaide, but you are not due in Adelaide until August next year so I think that ‑ ‑ ‑
HIS HONOUR: We want to deal with it before then. Mr Slattery, I think for present purposes I will adjourn this matter to a date and place to be appointed. As best I can, I will meet the convenience of counsel in regard to that.
MR SLATTERY: Thank you, your Honour. I think we should bring in the subpoena which we would wish to seek leave to issue, your Honour.
HIS HONOUR: Yes, but that can be done ex parte, can it not?
MR SLATTERY: Yes.
HIS HONOUR: And if there is an objection to it, the proper course is to move to set it aside, is it not, Mr Morris?
MR MORRIS: That is so, your Honour, yes.
HIS HONOUR: So a subpoena will no doubt be prepared and some other Justice or myself will decide whether to issue it and if an order is made that it be issued, then it will be a matter for Mr Morris’ client as to how it is dealt with.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: That is so, is it not?
MR SLATTERY: Thank you, your Honour, yes. The other point, your Honour, was in the interim, access to the documents which have been produced.
HIS HONOUR: Yes, I have ordered that, and I will give leave to the parties to make copies, that upon the dissemination of the copies, any copies to be confined to the lawyers and any person whom it is necessary to see them to obtain instructions, but not otherwise.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: Is there anything further?
MR MORRIS: I think maybe then the documents produced by Dr Brown should also be returned to the Court’s custody on the same basis.
HIS HONOUR: Yes, they should be. Can that be done?
MR SLATTERY: I am happy with that, thank you, your Honour.
HIS HONOUR: They remain in the custody of the Court.
MR SLATTERY: We do not actually have an order for copying of those, your Honour. Could I ask an order ‑ ‑ ‑
HIS HONOUR: I will make the same order in relation to those.
MR SLATTERY: Thank you.
HIS HONOUR: What would be convenient, when the matter comes back on, is if your submissions could, on both sides, incorporate verbatim the evidence relied upon as extracted either from the transcript or the affidavits or the exhibits to them. There is so much material that it would be very convenient if I could look at just one document.
MR SLATTERY: Yes, your Honour.
HIS HONOUR: Is there anything further then?
MR SLATTERY: No, thank you, your Honour.
HIS HONOUR: Very well. I order that the costs of these proceedings today be reserved and that this matter be adjourned to a date and place to be fixed.
MR MORRIS: Your Honour, those who instruct me are concerned, just because, as your Honour says, there are very few trials in this Court and we are not sure of the procedure in relation to transcripts. There is a suspicion that an order may be required for a transcript to be produced and made available because the matter is heard in chambers. I do not know if that is right or wrong, but if such an order is necessary ‑ ‑ ‑
HIS HONOUR: I would certainly make any order that was necessary to enable the parties to have access to the transcript. I think it comes to me first to check, to make any corrections, if any that may need to be made, and then I think it becomes available. But, in any event, I will order that it be available to the parties.
MR SLATTERY: Thank you, your Honour.
HIS HONOUR: This matter is adjourned. Call the next matter.
AT 4.15 PM THE MATTER WAS ADJOURNED
Key Legal Topics
Areas of Law
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Tax Law
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Administrative Law
Legal Concepts
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Appeal
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Judicial Review
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Procedural Fairness
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Standing
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