Con Ange v Fairfax Media Publications Pty Ltd

[2010] NSWSC 1417

CITATION:	Con Ange v Fairfax Media Publications Pty Ltd & Ors [2010] NSWSC 1417
HEARING DATE(S):	4 and 12 November 2010
JUDGMENT DATE :	9 December 2010
JUDGMENT OF:	Garling J
DECISION:	Application to vacate interlocutory orders of this Court made on 4 November 2010 is dismissed. Plaintiff is to attend for cross-examination on his affidavits of discovery.
CATCHWORDS:	PRACTICE AND PROCEDURE – Discovery – Obligations of discovery – Supplementary verified list of documents – Adequacy of supplementary verified list – Whether Court should set aside previous order that the plaintiff be cross-examined on his affidavit verifying his discovery list – Whether admissions and further discovery made by the plaintiff since the previous order has so changed the circumstances leading up to those orders that they should be set aside.
LEGISLATION CITED:	Civil Procedure Act 2005
CATEGORY:	Procedural and other rulings
CASES CITED:	John Fairfax Publications Pty Ltd v Blake (2001) 53 NSWLR 541
PARTIES:	Con Ange (Plaintiff) Fairfax Media Publications Pty Ltd (1st Defendant) Fairfax Digital Australia & New Zealand Pty Ltd (2nd Defendant) Jacqueline Magnay (3rd Defendant)
FILE NUMBER(S):	SC 2009/297676
COUNSEL:	K. Smark SC with S.T. Chrysanthou (Plaintiff) T. Blackburn SC (1st, 2nd & 3rd Defendants)
SOLICITORS:	Kalantzis Lawyers (Plaintiff) Johnson Winter Slattery (1st, 2nd & 3rd Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

GARLING J

THURSDAY, 9 DECEMBER 2010

2OO9/297676 CON ANGE v FAIRFAX MEDIA PUBLICATIONS PTY LTD & ORS

JUDGMENT

Application to Vacate Interlocutory Orders

: On 4 November 2010, after hearing argument, I made the following orders:

(1) The plaintiff, Mr Con Ange, is to attend court to give evidence at 10am on Friday, 12 November 2010.

(2) Grant leave to counsel for the defendants to cross-examine the plaintiff, Mr Con Ange, on that day in respect of the plaintiff’s affidavit of 6 August 2010 relating to discovery of documents.

(3) In the event the plaintiff seeks to discharge the order for Mr Ange to attend court and give evidence on Friday, 12 November 2010, then he is to file and serve a notice of the order which is sought and any affidavit in support on or before 12noon on Thursday, 11 November 2010.

(4) Adjourn the defendants’ motion in relation to discovery until 10am on Friday 12 November 2010.

(5) Reserve question of costs.

2 I published my reasons for judgment on 12 November 2010. The reasons expressed by me during this judgment assume familiarity with my initial judgment and reasons.

Application to Vacate Interlocutory Orders

3 On 11 November 2010, the solicitors for Mr Ange, by letter, gave notice that on 12 November 2010 they would seek orders to the following effect:

(a) Vacate the order of 4 November 2010 that the plaintiff, Mr Ange, attend for cross-examination upon his affidavit verifying his list of documents;

(b) Various orders relating to costs.

4 Fairfax, a term which I will use to describe all three defendants, opposes the vacation of the order for cross-examination. It also opposed the various costs orders.

5 Accordingly, evidence was taken and submissions were made on 12 November 2010 dealing with Mr Ange’s application.

6 For the reasons set out below I refuse to make the orders now sought with the result that the original order requiring Mr Ange to attend for cross-examination will stand. It will be necessary to fix a new time and date for the examination of Mr Ange.

Non-Attendance of Mr Ange

7 It is appropriate that I note, before expressing my reasons with respect to the application, that the order of the Court which I made on 4 November 2010 required Mr Ange to attend for cross-examination at 10am on Friday, 12 November 2010.

8 When the matter was called Mr Ange was not present. His senior counsel informed me that he had an affidavit prepared by Mr Vasilios Kalantzis, the solicitor for Mr Ange, which explained Mr Ange’s absence. So far as was relevant, that affidavit, which I have no reason to disbelieve, informed the Court that:

(a) on 4 November 2010, Mr Kalantzis informed Mr Ange of the order of the Court and explained to him, fully, its effect. Mr Ange informed Mr Kalantzis that he understood the effect of the Court’s order;

(b) on 8 November 2010, Mr Ange, whilst he was still in Sydney, swore an affidavit verifying a supplementary list of documents;

(c) Mr Ange then travelled to Hong Kong to attend business meetings on 9 November 2010;

(d) on 10 November 2010, when reminded by his solicitor of his obligation to attend the Court, Mr Ange informed him that he was “… using his best endeavours to arrange a flight back to Sydney, Australia ”;

(e) on 11 November 2010, Mr Ange told his solicitor that he was unable to secure a flight from Hong Kong to Sydney. His excuse was that the unheralded grounding by Qantas of its A380 aeroplanes had affected planes flying out of Hong Kong so that he was unable to arrange for a flight back.

9 I indicated to senior counsel for Mr Ange that I regarded the position as entirely unsatisfactory. I also suggested to him that notwithstanding the contents of Mr Kalantzis’s affidavit, it appeared that there may have been a deliberate breach of the Court’s order. Senior counsel responded, candidly, that on its face the conduct would appear to have that feature.

10 However, I considered that the time of the Court which had been set aside for the cross-examination of Mr Ange would be best used to proceed with the application being made by Mr Ange’s solicitors on his behalf, to vacate the interlocutory orders notwithstanding there was at least a possibility that Mr Ange was in contempt of the Court’s order.

11 I make these remarks to indicate two things:

(a) The extent of the factual disclosure and evidence about Mr Ange’s failure to comply with the Court’s order which was before the Court on 12 November 2010; and

(b) I have not drawn any conclusion about Mr Ange’s conduct, I have not determined any issue with respect to it, and the features associated with it play no part in my determination of the issues in this judgment.

Background

12 At para 22 of my previous judgment, I set out some of the matters which I regarded as being in issue or else relevant to a fact in issue. I listed these matters:

“(a) Whether Mr Ange was engaged in the business of creating, writing, making, participating in, distributing or selling pornographic literature, films, videos and DVDs, which had access to sex toys for adults;

(b) Whether Mr Ange was the owner in whole or in part, director, or else engaged in the management of any entity which engaged in the business described in the subparagraph (a) above;

(c) If Mr Ange was engaged in the businesses or entities described broadly in para (a) and (b), what the nature, extent and content of those business activities were, including the business structure, by which the plaintiff engaged in the various activities;

(d) What the nature and extent of Mr Ange’s association was with the Cronulla Sharks Rugby League Club, its senior executives, players and the partners of players;

(e) What the nature and extent of Mr Ange’s conduct was which led to a police investigation into whether he was engaged in criminal activity surrounding the stealing of property worth $1.7M; and

(f) Whether Mr Ange’s business activities, of the kind broadly described in subparagraph (a) above, were illegal, in whole or in part, including whether Mr Ange or any of the business entities through which he conducted his business had been investigated for illegal conduct, had been prosecuted for illegal conduct, and the results of such prosecutions. Mr Ange’s attitude to such investigations and prosecutions may also be relevant.”

13 At para 61 of my previous judgment, I made the following comments:

“61. I … made an order permitting the cross examination of his client. I did this because I was satisfied that Mr Ange’s solicitor had properly and fully explained his obligations of discovery to him and on more than one occasion. It seemed to me that the issues in the proceedings were clear to anyone who read the pleadings as Mr Ange apparently had. As well, so poor was the verified list in terms of the number, range of documents produced and attention to documents likely to be in Mr Ange’s possession, power and control, that there had been a wholly inadequate provision of discovery which was not likely to be remedied by the provision of a further list of documents.”

14 It was because of the matters summarised in para 61 that I was persuaded to the view that it was in the interests of justice that Fairfax be entitled to cross-examine Mr Ange on the “… wholly inadequate provision of discovery …”.

The Evidence on this Application

15 In support of his application to vacate the orders of 4 November 2010, Mr Ange relied on a further affidavit of Mr Kalantzis sworn on 11 November 2010. Mr Kalantzis was cross-examined before me on 12 November 2010.

16 The affidavit described in some detail the attempts which Mr Kalantzis had made to identify and obtain further documents.

17 Annexed to the affidavit of Mr Kalantzis, was a document entitled “Supplementary List of Documents”. Included in that document was an affidavit of Mr Ange sworn or affirmed (it is not clear which) on 8 November 2010. It included the following statements:

“2. I believe that the information contained in this list of documents is true to the best of my knowledge, information and belief.
3. I have made reasonable inquiries as to the existence and location of the documents referred to in the order.
4. I believe there are no documents (other than excluded documents) falling within any of the classes specified in the order that are, or that within the last 6 months before the commencement of the proceedings, have been in my power, custody or control, other than the documents referred to in part 1 or 2 of the listed documents.”

18 The documents identified in the supplementary list were more extensive than those which had been identified in the original list of documents which was dated 6 August 2010. The supplementary list discovered documents of the following description:

(a) a series of formal records consisting of business name extracts for a variety of businesses and three company extracts for Everything Adult (Aust) Pty Limited, Everything Adult Warehouse Pty Ltd, and Everything Adult Online Pty Ltd;

(b) sample lists of products available from two websites with which Mr Ange is associated;

(c) one copy of a DVD entitled “Manilla Exposed”;

(d) documents held by two firms of solicitors which had formally acted for Mr Ange;

(e) a variety of company documents, invoices and company register, not further specified, relating to Wildlife Video LLC (an American corporation) and Everything Adult Online Pty Ltd.

19 The affidavit, and evidence, of Mr Kalantzis made it clear that he conferred with Mr Ange and again received a number of assurances from him that he had no more documents in his possession, power and control beyond those listed in the supplementary list.

20 In addition to the affidavit evidence, Mr Ange made a series of admissions “… for the purposes of these proceedings, without limitation” in a letter dated 10 November 2010 from his solicitors to the solicitors for Fairfax. These admissions were in the following form:

“1. The plaintiff is, and was at the time of publication of the matter complained of, a co-owner of the film production company Wildlife Video LLC ("Wildlife").

2. Wildlife is a corporation carrying on business in the United States of America.

3. Wildlife is in the business of producing pornographic films.
4. The plaintiff is, and was at the time of publication of the matter complained of, a director and shareholder of Everything Adult Warehouse Pty Ltd.
5. Everything Adult Warehouse Pty Ltd owned, at the time of publication of the matter complained of, a number of stores in Queensland.
6. Everything Adult Warehouse Pty Ltd does not currently own any stores in Australia.
7. The plaintiff is, and was at the time of publication of the matter complained of, a director and shareholder of Everything Adult Online Pty Ltd.
8. Everything Adult Online Pty Ltd is, and was at the time of publication of the matter complained of, in the business of selling adult products over the internet.
9. Everything Adult Online Pty Ltd conducts its business from Singapore and Australia.”

21 That letter also confirmed an earlier admission which had been made by Mr Ange in proceedings before Simpson J. That admission was to this effect:

“The plaintiff admits that on 27 August 2008 he was fined $5,000 by the Queensland Office of Fair Trading for selling DVDs classified as X18+ and one film classified as RC (refused classification) and magazines classified as Category 2 Restricted – said items being banned at the time from sale in Queensland.”

22 In addition, in the course of the hearing before me on 12 November 2010, senior counsel for Mr Ange made the following admission for the purposes of the proceedings and “… without restriction…”, namely, that at the time of the publication, the plaintiff was a pornographer.

23 The meaning of the expression “pornographer” and hence the admission to which I have just referred, is to be understood by reference to the pleading of contextual imputations by Fairfax to which I referred in [20] of my earlier judgment. Simpson J had also referred to the proper meaning of the expression at [33] of her judgment of 21 June 2010.

24 On the application, Fairfax tendered two exhibits. The first was an ASIC company extract for Everything Adult Warehouse Pty Ltd which was current as at 11 November 2010. It demonstrated that Mr Ange was one of two directors and was one of only two shareholders. It demonstrated that the registered office of the company was at the office of Peter Theo at Greenacre.

25 Fairfax also tendered a balance sheet for Everything Adult Warehouse Pty Ltd for the year ended 30 June 2008 which appeared to have been prepared by Peter Theo. Mr Theo is described on that balance sheet as a Taxation Consultation – Accountant. The balance sheet also records a series of professional qualifications of Mr Theo.

26 In the course of cross-examination, Mr Kalantzis, whose evidence I accept, confirmed for Mr Blackburn, senior counsel for Fairfax, that on 4 and 8 November 2010, he had again taken Mr Ange through each of the categories which had been enumerated in correspondence between the parties to seek specific instructions again with respect to the whereabouts of documents. The answers which he received were recorded in his affidavit.

Conclusion from the Evidence

27 The supplementary list of documents did not refer specifically to any documents which were held at the offices of Mr Theo. Mr Theo, according to the evidence, was the accountant for Mr Ange’s businesses. It is quite clear that accounting documents of the kind to be found in Ex B are likely to be in existence. They are clearly discoverable by Mr Ange. According to the evidence before me, he has denied that any such documents exist. This is an area which at least on its face permits of further inquiry by exploration, and demands careful attention.

28 The admissions made by Mr Ange do not deal in any way with this category of documents.

29 The evidence also discloses a real issue about whether Mr Ange or his businesses, or those businesses with which he was associated, were engaged in the area of distribution or selling of pornographic literature, films, videos, DVDs and adult sex toys. I identified these issues and facts relevant to these issues in [12] above.

30 The admissions accept that Mr Ange was the co-owner of an American corporation which was in the business of producing pornographic films, but the evidence given before me suggested that Mr Ange did not admit, but rather contested, the proposition that Everything Adult Online Pty Ltd sold DVDs or films or videos of a pornographic kind.

31 However, the evidence referred to during the course of cross-examination demonstrated that the company did, in fact, offer online DVDs of a pornographic kind for sale. The careful explanation of Mr Kalantzis as to what information he had received from his client, and the inquiries which he had personally made, whilst diligent, leave me with the clear impression that this is an area of much confusion, and it is certainly not an area in which I am presently satisfied that Mr Ange has made full or complete or proper discovery.

32 In summary, I was left by the evidence put before the Court on 12 November 2010 in no better position than I was on 4 November 2010. In fact, in many ways the evidence further confused the position.

33 It did not satisfy me that there was no further discovery to be made by Mr Ange, nor did it satisfy me that he had given full and complete discovery.

Setting Aside Interlocutory Orders

34 The parties accepted that the Court was entitled to set aside an interlocutory order of the kind which I made on 4 November 2010 where the circumstances had sufficiently changed such that the continuation of the order would not be in the interests of justice, or where it would not facilitate the overriding purpose articulated by s 56 of the Civil Procedure Act 2005.

35 Senior counsel for Mr Ange pointed to the supplementary list of documents and the further admissions which had been made as demonstrating that the factual position had so altered after 4 November 2010 that the maintenance of the order for the cross-examination of Mr Ange was no longer in the interests of justice.

36 He submitted that the effect of the admissions was to minimise the issues which were in dispute and accordingly discharge any further obligation of discovery.

37 Senior counsel for Fairfax submitted that the supplementary list of documents and the admissions which had been made were so inadequate that the need for cross-examination of Mr Ange remained.

38 He submitted that as a matter of principle, when dealing with contextual imputations, the Court was obliged to “focus on the facts, matters and circumstances said to establish the truth of the contextual imputation, rather than on the terms of the contextual imputation itself”: John Fairfax Publications Pty Ltd v Blake (2001) 53 NSWLR 541 at [5] per Spigelman CJ.

39 Hence, he submitted that the breadth of discovery obligations was such as to require disclosure of material which related to facts, matters and circumstances. The admissions, he argued, went only to the truth of the contextual imputations and so did not discharge the discovery obligations.

40 Senior counsel for Mr Ange submitted that Blake was not an applicable authority as it was limited only to an issue of whether a contextual imputation was capable of being made out as a defence to a claim for damages.

Discernment

41 It is unnecessary to finally determine the argument about the applicability of the remarks of Spigelman CJ in order to decide this application, and therefore I refrain from so doing.

42 I am not satisfied that by the filing of the supplementary list of documents, and by the making of the admissions recorded, Mr Ange has so changed the circumstances leading up to the making of the orders of 4 November 2010 that I should vacate them.

43 In my earlier judgment, I said:

“56. The evidence is strongly to the effect that there is likely to be more documents than those disclosed. The taxation laws mandate the continued possession of a variety of documents by income earning individuals and legal entities for a period of at least 5 years. Those taxation and financial records would be relevant to the issues which I have outlined above. As well, the Corporations Act 2001 requires the maintenance and retention of proper records of the operation of a corporation. It might also be reasonably expected that the operation of the many businesses with which Mr Ange was associated involved the sending and receipt by him of electronic communications such as emails.

57. I am not prepared to accept, on the evidence before me, that Mr Ange has been able to operate these businesses for a number of years, without there being one piece of paper retained by him, or else in his power and control. Equally, I am not prepared to accept that there has not been one email retained or stored by him or else stored in a way which is within his power and control. I regard any suggestion that this is the fact as being quite exceptional. It is not one which without proper direct evidence I would be prepared to accept.

58. I agree with the assessment made by Mr Kalantzis that it was “highly improbable” that Mr Ange had no discoverable documents other than those to which the affidavit of 6 August 2010 referred.”

44 The additional material does not address any deficiency in the discovery of business and accounting records, nor does it address the non-existence of any emails or other like electronic records of communications or correspondence. The admissions which relate to the conduct of one or more businesses are quite inadequate, when compared with the evidence of the nature of the businesses undertaken by Mr Ange, to remove the necessity for discovery of records relevant to the issue which I have called attention to.

45 As well, the continued giving of instructions by Mr Ange to his solicitor, that no documents exist, in the face of what I am satisfied has been a careful explanation of his obligations of discovery, means that the only means left by which the Court can be satisfied that an important interlocutory process for the preparation for the trial of the real issues in dispute has been properly attended to by Mr Ange is to require him to attend for cross-examination on his affidavits verifying his discovery.

46 In those circumstances, and for those reasons, I am not prepared to grant the orders sought.

Orders

(1) Application by the plaintiff to vacate the interlocutory orders of this Court made on 4 November 2010 is dismissed.

(2) The plaintiff is to pay the defendants’ costs of the application of 4 November 2010 and 12 November 2010 in so far as they relate to the issue of adequacy of discovery.

(3) Order that Mr Ange attend for cross-examination upon his affidavits of 6 August 2010 and 11 November 2010 at a time and date to be fixed.

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