D'Sylva v Bloomgold Investments Pty Ltd
[2023] WASC 141
•2 MAY 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: D'SYLVA -v- BLOOMGOLD INVESTMENTS PTY LTD [2023] WASC 141
CORAM: SEAWARD J
HEARD: 24 APRIL 2023
DELIVERED : 24 APRIL 2023
PUBLISHED : 2 MAY 2023
FILE NO/S: CIV 2198 of 2020
BETWEEN: ASHLEY PAUL D'SYLVA
Plaintiff
AND
BLOOMGOLD INVESTMENTS PTY LTD
Defendant
FILE NO/S: CIV 1734 of 2021
BETWEEN: TIMOTHY MORRISON
First Plaintiff
ASCAN CAPITAL PTY LTD
Second Plaintiff
AND
ASHLEY PAUL D'SYLVA
Defendant
Catchwords:
Using documents obtained under compulsion in the proceedings for another purpose unrelated to the litigation - Relief from the Harman obligation - Using documents only for limited purposes specified in the application - Using documents for purposes of instructing tax advisers and accountants to provide taxation advice and services - Granting the release to further the interests of justice - No prejudice to the parties
Legislation:
Nil
Result:
Application granted
Category: B
Representation:
CIV 2198 of 2020
Counsel:
| Plaintiff | : | P Van Der Zanden |
| Defendant | : | GJ O'Shannessy |
Solicitors:
| Plaintiff | : | Hotchkin Hanly |
| Defendant | : | Murcia Pestell Hillard |
CIV 1734 of 2021
Counsel:
| First Plaintiff | : | GJ O'Shannessy |
| Second Plaintiff | : | GJ O'Shannessy |
| Defendant | : | P Van Der Zanden |
Solicitors:
| First Plaintiff | : | Murcia Pestell Hillard |
| Second Plaintiff | : | Murcia Pestell Hillard |
| Defendant | : | Hotchkin Hanly |
Cases referred to in decision:
Harman v Secretary of State for the Home Department [1983] 1 AC 280
Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67
SEAWARD J:
(This judgment was delivered extemporaneously and has been edited from the transcript to correct matters of grammar and formatting, and to add headings and full citations.)
Introduction
The application before me today arises in the context of two separate actions which have been case managed together.
Matter CIV 2198 of 2020 involves Mr Ashley Paul D'Sylva and Bloomgold Investments Pty Ltd (Bloomgold).
Matter CIV 1734 of 2021 involves Mr Timothy Morrison, Ascan Capital Pty Ltd (Ascan) and Mr D'Sylva.
In very broad terms, the matters involve allegations regarding the existence or non-existence of a partnership agreement, the terms of that agreement, the termination of that agreement, the books or accounts of the partnership agreement and the ownership of particular shares.
Both matters have been on foot for some time, and a joint private mediation conference was held on 28 November 2022. That mediation conference has been adjourned sine die to enable some of the parties to obtain taxation advice.
Bloomgold, Ascan and Mr Morisson (all represented by the same solicitors) have made an application seeking leave that all parties be permitted to use certain documents obtained under compulsion in the proceedings for another purpose unrelated to the litigation. That is, the parties are seeking leave to be relieved of the obligation known as the 'Harman obligation' in certain respects.[1]
[1] Referring to Harman v Secretary of State for the Home Department [1983] 1 AC 280 and the requirement that parties do not use documents obtained under compulsion in the course of litigation for any other purpose.
A Minute of Consent Orders (Consent Orders) has been filed in each matter. They are largely identical.
The application is supported by all parties in both matters.
For the reasons below, I consider it appropriate to grant the applications, with some minor amendments to the Consent Orders.
Legal principles
The legal principles governing the release of a party from the Harman obligation were recently outlined by the Court of Appeal in Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 at [72] - [74] as follows:
[72]The power to dispense with or modify the Harman obligation is not freely exercised, but will be exercised if there are special circumstances.
[73]In a passage in Liberty Funding Pty Ltd v Phoenix Capital Ltd that has been cited with approval many times, the Full Court of the Federal Court said as follows:
The notion of 'special circumstances' does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.
[74]Among the considerations that may be relevant to the exercise of the discretion are:
(a) the nature of the document;
(b)the circumstances under which the document came into existence;
(c) the attitude of the author of the document and any prejudice the author may sustain;
(d) whether the document existed before the litigation, or was created for that purpose and therefore expected to enter the public domain;
(e) the nature of the information in the document, in particular whether it contains personal data or commercially sensitive information;
(f) the circumstances in which the document came into the hands of the applicant; and
(g) the likely contribution of the document to achieving justice in another proceeding.
(references omitted)
Details of the release sought
Documents the subject of the release
The parties seek a release to use the following three categories of documents:
(a)documents filed by the parties, and identified in Schedule A to each Consent Order. These documents vary slightly as between each matter, but broadly consist of the pleadings, particulars, submissions and/or affidavits filed by the parties;
(b)documents produced by a third party, Mr John Robert Greeve, trading as Kamran Accounting, pursuant to subpoenas for production dated 5 February 2021, 19 January 2022 and 16 February 2022. These documents appear to consist of accounting records and financial records held by Mr Greeve that relate to one or more of the parties. In matter CIV 1734 of 2021, the documents also relate to a further third party, being Empire Capital Pty Ltd (a company that Mr D'Sylva is currently, and Mr Morrison was, a director of); and
(c)documents discovered by the parties in the proceedings.
The parties accept that for some of the documents, it is open to the parties to provide these documents outside of the compulsory processes of the court. However, the parties seek release from the Harman obligation in order to ensure that the documents are utilised only for the specific purposes falling within the scope of the application. At least some of the parties do not wish to provide the documents in an entirely open forum. Further, the parties wish to provide the documents that have been produced pursuant to the subpoena as they are in a particular form and have been collated for a particular purpose which can be more easily provided.
Purpose to which the documents can be used
The parties seek a release to use the three categories of documents for the limited purposes of briefing and instructing their respective tax advisers and accountants to:
(a) provide them with taxation advice;
(b) provide them with accounting and taxation services including the preparation of financial statements, tax returns and applications and submissions to the Australian Taxation Office (ATO);
(c) lodge tax returns, applications and submissions with the ATO on their behalf and communicating with the ATO on their behalf.
The proposed orders make provisions for the parties to ensure that any tax adviser or accountant provided with documents, is made aware at, or before the time the documents are provided, that the documents are only to be used for the specific purposes, and otherwise are to be kept confidential.
Reason for the release
Whilst the parties wish to provide the documents to their taxation advisers for the purposes of these two proceedings, the parties consider that the taxation advice may subsequently be relied on by accountants of the various parties for the purposes of providing on-going accounting and taxation services which are outside the scope of the two matters. There is no bright line between when the documents will be used for one or more of those two purposes. In order to ensure that the parties do not need to continue to return to court seeking further releases this release is being sought.
Attitude of the parties
The parties to each of the proceedings consent to the release.
In terms of the third parties, Mr Greeve has been advised of this application and been provided with a copy of the letter and the Consent Orders. Mr Greeve was not present at the hearing and neither consents or opposes. The orders sought by the parties do not have the effect that the documents produced by Mr Greeve will be used automatically. Rather, the orders sought require the party wishing to use the documents to provide Mr Greeve and, if relevant, Empire Capital Partners Pty Ltd with seven days written notice of the party's intention to use the documents and inform the third party that they may object to the disclosure by giving notice in writing to the party and the court within seven days. The third parties will then have an opportunity to bring an application in this court objecting to the use and/or seeking to restrict the use of those documents by the third parties in the manner proposed if they object.
Disposition
I am satisfied in all of the circumstances that it is appropriate to grant the release sought by the parties, subject to some minor amendments to the Consent Orders.
I accept that the documents the subject of the release contain personal and commercially sensitive information about the parties. However, the orders sought only permit these documents to be used for the limited purposes specified in the Consent Orders and require the parties to inform the advisers that the documents can only be used for these purposes and are to otherwise be kept confidential.
The advice will be used not just in relation to these proceedings but may also subsequently be relied upon by accountants of the various parties for the purposes of providing accounting and taxation services which are outside the scope of these proceedings. Therefore, I consider that granting the release will further the interests of justice in so far as it relates to the possible resolution or continuation of each of the matters presently before the court. It will also further the interests of justice in so far as it will enable the parties' taxation advisers to be provided with accurate information relevant to the affairs of the parties and this will, in turn, ensure the advisers are able to provide accurate taxation services to the parties in relation to matters which are outside of these proceedings.
The parties to the proceedings each consent to the release of the documents, and no prejudice to the parties has been identified.
In relation to the documents the subject of the subpoena, the orders sought provide the third parties with an opportunity to be heard prior to the documents being provided. Therefore, I am satisfied that the terms of the orders will ensure that the third parties do not suffer any prejudice in this respect.
In terms of the third category, which concerns the discovered documents, I accept that at this stage of the proceedings, and given the size of the discovery, it is not possible for the parties to clearly identify each of the documents that will need to be provided, and I also accept that the documents falling within this category may change over time. I therefore consider it appropriate that the release extend to these documents in the manner proposed.
In terms of the Consent Orders, during the course of the hearing, I raised with counsel questions I had in relation to some of the particular orders sought in the two minutes. As a result of those exchanges, I will make some amendments to the minutes.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AA
Associate to the Judge
2 MAY 2023
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