Australian Securities and Investments Commission v Flugge and Geary (Ruling No 12)

[2015] VSC 798

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2007 10077

IN THE MATTER OF AWB LIMITED (ACN 081 890 459)

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
TREVOR JAMES FLUGGE	Defendant

- AND -

S CI 2007 10081

IN THE MATTER OF AWB LIMITED (ACN 081 890 459)

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
PETER ANTHONY GEARY	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 December 2015
DATE OF JUDGMENT:	8 December 2015
CASE MAY BE CITED AS:	ASIC v Flugge & Geary (Ruling No 12)
MEDIUM NEUTRAL CITATION:	[2015] VSC 798	Second revision:  9 February 2017

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CIVIL PROCEDURE – Whether the defendants’ closing address should precede the plaintiff’s in the case where defendants have tendered evidence – Order 49 Supreme Court (General Civil Procedure Rules) 2015 – Section 49 Civil Procedure Act 2010 (Vic) – Overarching purpose under s 7 Civil Procedure Act 2010 (Vic) – Just resolution of the issues requires the plaintiff to give its closing address first in the circumstances where the plaintiff’s alternative plea requires further explanation – Plaintiff may apply for leave to reply to the defendants’ closing address.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N J O’Bryan AM SC with Mr J P Moore QC, Mr C H Truong and Ms C E Klemis	Australian Securities and Investments Commission
For the Defendant in S CI 2007 10077	Mr S K Dharmananda SC with Mr R F R Pintos-Lopez	Corrs Chambers Westgarth
For the Defendant in S CI 2007 10081	Mr I D Hill QC with Mr A Tragardh	Galbally Rolfe

HIS HONOUR:

1. ASIC seeks an order that closing addresses be in accordance with the procedure provided by order 49 of the Supreme Court (General Civil Procedure) Rules 2015 (Rules) and in particular, rule 49.01. 

1. ASIC has referred me to authorities on the matter and has identified three methods of how addresses have been conducted in other ASIC civil penalty proceedings. 

1. The first method is in accordance with the Rules, whereby, unless the court otherwise orders, as in this case, where the defendants have tendered evidence, the defendants’ closing address would precede ASIC’s.

1. Each defendant has tendered some documents.  Neither has given evidence.  Mr Flugge called an expert director to give evidence.

1. Secondly, Mr Moore referred to a procedure whereby ASIC would be given fulsome written submissions by the defendants.  In those circumstances it may be appropriate then for ASIC to give its closing address first and then for the defendants to respond.

1. In the third method, ASIC would go first, the defendants would respond and then ASIC would have a right of reply.  

1. Mr Dharmananda on behalf of Mr Flugge referred me to s 49(1) of the Civil Procedure Act2010 (Vic), which provides that:

In addition to any other power a court may have, a court may give any direction or make any order it considers appropriate to further the overarching purpose in relation to the conduct of the hearing in a civil proceeding.

1. The overarching purpose set out in s 7 of that Act is to ‘facilitate the just, efficient, timely and cost effective’ resolution of the real issues in dispute.

1. In this case, given the stage the application is made in the trial, I am primarily concerned about the first requirement, that is, the just resolution of the dispute.  

1. It appears to me that the case that ASIC makes, being that the defendants knew that the inland transport fees were imposed contrary to UN sanctions under contracts  which were in fact a sham and which both AWB and IGB did not intend or expect to be performed, is well understood. 

1. The alternate case, which in the case of Mr Flugge, appears at paragraph 51 of the statement of claim (and there is a similar case against Mr Geary in respect of the matters alleged against him) is:

Alternatively, if Flugge did not have knowledge of each of the matters alleged in paragraph 48 above, then:

(a)Flugge had the means of knowledge of each of those matters; and

(b)by reason of his position as a Director and Chairman of AWB, the matters alleged in paragraphs 4 to 8 above, and the circumstances pertaining to AWB alleged in paragraphs 9 to 46 above, at all times from June 1999 to March 2002, Flugge had duties to:

(i)inform himself of each of the matters alleged in paragraph 48 above using the means of knowledge alleged at (a) above; and

(ii)thereafter do each of the things alleged in paragraph 49 above.

1. I find that it would be only fair and just if the defendants were able to hear how that case is made out before they are called upon to respond.  I accept that Mr O’Bryan made a fulsome opening.  There was, however, little opened on this alternative ground.  To my mind, the just resolution of this matter does warrant the defendants hearing the case on that alternative plea before they are called upon to respond.

1. I accept what Mr Hill says, that there is no onus placed upon the defence at all.  The onus is entirely on the plaintiff to prove its case.  On the other hand, I do accept that it is contrary to the procedure normally followed, as Mr Moore has pointed out.  Accordingly, I will leave open to ASIC to apply to reply to the defendants’ closing submissions.

1. At this stage, I will not direct that any reply I allow be limited to the matters which were addressed to me by the defendants.  Rather, if a right to reply is sought, I would want to be informed on what it is that ASIC wishes to reply on.

1. At this stage I am not finding that any reply could not go beyond those matters referred to by Mr Dharmananda and Mr Hill, but there would have to be some proper basis for suggesting the reply could go beyond those matters.