Coad v Osborne

[2002] WASC 59

COAD & ANOR -v- OSBORNE [2002] WASC 59

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2002] WASC 59
Case No:	COR:164/2000	Heard:	5 MARCH 2002
Coram:	MASTER BREDMEYER	Delivered:	28/03/02
No of pages:	6	Judgment Part:	1 of 1
Result:	Application allowed in part
Category:	B
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Parties:	SIMON ROGER COAD ANTHONY MICHAEL TRAVERS RAMON RONALD THEODORE OSBORNE
Catchwords:	Corporations Examination of director Production of documents to assist in the examination
Legislation:	Corporations Law, s 596A, s 597(9)
Case References:	Nil Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : COAD & ANOR -v- OSBORNE [2002] WASC 59 CORAM : MASTER BREDMEYER HEARD : 5 MARCH 2002 DELIVERED : 28 MARCH 2002 FILE NO/S : COR 164 of 2000 BETWEEN : SIMON ROGER COAD

ANTHONY MICHAEL TRAVERS
Plaintiffs

AND

RAMON RONALD THEODORE OSBORNE
Defendant

Catchwords:

Corporations - Examination of director - Production of documents to assist in the examination

Legislation:

Corporations Law, s 596A, s 597(9)

Result:

Application allowed in part

(Page 2)

Category: B

Representation:

Counsel:

Plaintiffs : Ms L Broadley
Defendant : In person

Solicitors:

Plaintiffs : Bennett & Co
Defendant : In person

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

(Page 3)

1 MASTER BREDMEYER: The plaintiffs have applied by way of chamber summons for production of documents pursuant to s 597(9A) of the Corporations Law from the defendant. I amend the chamber summons. The correct section is s 597(9). The chamber summons was filed on 5 February 2002. There is no affidavit in support. Mr Osborne has sworn an affidavit on 5 March 2002 in opposition. On the first return date, 18 February, Mr Osborne obtained an adjournment on the basis that he was seeking legal representation from a Mr O'Connor. The application was adjourned to 5 March. Mr Osborne has not yet obtained legal representation and seeks a further adjournment of this chamber summons to enable him to do that. I consider he has had a reasonable time to get legal representation and I refuse a further adjournment.

2 By way of background, Mr Osborne is an accountant. He is principal of the firm, McMillan Partners, which practises in Victoria Park. He is a director of Hilgold Holdings Pty Ltd, which is now in liquidation. The plaintiff liquidators obtained an order from me for his examination under s 596A of the Corporations Law on 19 July 2000. Pursuant to that order, Mr Osborne has been examined at some length in January, February, and January 2001. On the last occasion, on 14 November 2001, the Registrar ordered:

"1. By 28 November 2001 Mr Osborne is to produce to the court the schedule of account balances as at 30.6.1998 for the McMillan Partners trust account together with any other documentation identifying the entity or client on whose behalf the funds were held."

3 The first order sought in the chamber summons is:

"1.1 all original and copies of trust accounts in respect to Hilgold Holdings Pty Ltd (In Liquidation) (ACN 077 540 026) for the period between January 1997 to December 1999."

4 Mr Osborne refers to that in par 3 of his affidavit as follows:

"3. The document referred to in paragraph 1.1 of the said summons is a large format green cloth-bound cash book entitled 'NAB Trust Account Cash Book'. The Plaintiffs held this book for about 6 months in 2001 and could have and I believe had made copies of all entries contained in it. If this is correct then further discovery of this already discovered document is otiose."

(Page 4)

5 This book was handed back to Mr Osborne at the conclusion of the hearing on 14 November 2001. Ms Broadley, for the plaintiffs, has told me that her firm did not make copies of it. I will order this book to be produced again.

6 The second order sought is as follows:

"1.2 all original and copies of accounts operated by the Defendant and/or McMillan and Partners in respect to Hilgold Holdings Pty Ltd (In Liquidation) (ACN 077 540 026) for the period between January 1997 to December 1999."

7 Mr Osborne's comment on that at par 4 of his affidavit is as follows:

"4. As to the documents sought in paragraph 1.2, 1 operated no bank accounts on behalf of Hilgold Holdings Pty. Ltd. (In liquidation) ('Hilgold'). This company operated a cheque account at the NAB, statements of which the first-named Plaintiff has held for approximately 2 years. I retained no copies of these so I have nothing further to discover."

8 This is not a complete answer to the order. Mr Osborne does not have to produce the statements from the company's NAB cheque account because the first-named plaintiff has held them for approximately two years. Those statements are among the papers on the file and they do not show deposits from investors. I know that from some handwritten notes on the bank statements The order also seeks accounts operated by the defendant and/or McMillan Partners in respect of the company. At page 24 of his evidence on 30 January 2001, Mr Osborne said that some of the seed capital could have been held in McMillan Partners' trust account. I will require Mr Osborne to produce these accounts if they show any of the Hilgold investments. The order is directed at obtaining those accounts and I consider the order is good.

9 Paragraph 1.3 of the chamber summons seeks the following order:

"1.3 all contracts for the sale of ginkgo trees to clients of McMillan and Partners between 1 January 1998 and 31 October 1998."

10 Mr Osborne's comment on that is at par 5 of his affidavit:

(Page 5)

"5. As to paragraph 1.3, I sold gingko trees to a number of McMillan Partner clients but none on behalf of Hilgold. I object to production of copies sales receipts made to McMillan Partner' clients totally unconnected with Hilgold, as I do not have the permission of these investor/clients to divulge their private affairs to anyone but the ATO. To do so would be a breach of my professional indemnity insurance policy and I would be exposing myself to substantial claims in damages for breach of my contract of engagement with these clients. I also object because I do not believe such documents are in any way relevant to the Hilgold liquidation but are simply a fishing expedition on behalf of the first named plaintiff who is acting together with Bennett & Co and another of their clients Stewart Yesner who has a District Court action currently proceeding."

11 I accept Mr Osborne's argument that it is only the sale of trees in Hilgold which is relevant. I also accept his statement that he sold no gingko trees on behalf of Hilgold.

12 Paragraph 1.4 of the chamber summons reads:

"1.4 a schedule of account balances as at 30 June 1998 for McMillan and Partners' trust account together with any other documentation identifying any entity or client on whose behalf funds were held."

13 Mr Osborne's comment on that is as follows:

"8. As to paragraph 1.4 it covers the same document sought in paragraph 1.1 already referred to in paragraph 3 above. To provide it again would be oppressive."

14 If the schedule of account balances as at 30 June 1998 for McMillan Partners' trust account is as set out in the green book, then I agree with Mr Osborne's submission. But he should produce:

"any other documentation identifying any entry or client on whose behalf funds were held"

If there is no such document(s), he should say so.

(Page 6)

15 I will order Mr Osborne to produce to the Court the documents set out in pars 1.1, 1.2 and 1.4 of the plaintiffs' chamber summons - the orders to be obeyed as interpreted by my reasons.

16 The costs should be reserved or in the cause of the examination.