Douglas and Van May (WA) Pty Ltd & Anor
[2005] WASAT 318
•8 DECEMBER 2005
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: VOCATIONAL REGULATION
ACT: CREDIT (ADMINISTRATION) ACT 1984 (WA)
CITATION: DOUGLAS and VAN MAY (WA) PTY LTD & ANOR [2005] WASAT 318
MEMBER: MR C RAYMOND (SENIOR MEMBER)
HEARD: 28 NOVEMBER 2005
DELIVERED : 8 DECEMBER 2005
FILE NO/S: CC 2689 of 2005
BETWEEN: OLIVER GEORGE DOUGLAS
Applicant
AND
VAN MAY (WA) PTY LTD
First RespondentCOMMISSIONER OF FAIR TRADING
Second Respondent
Catchwords:
Credit (Administration) Act 1984 - Review of decision granting credit provider's licence - Objection to witness summonses to produce documents - Whether waiver could be granted for procedural irregularities
Legislation:
Credit (Administration) Act 1984 (WA), s 12, s 24
State Administrative Tribunal Act 2004 (WA), s 9, s 27, s 32, s 35, s 66, s 66(3), s 92
Result:
Application partially successful
Category: B
Representation:
Counsel:
Applicant: Mr B Taylor
First Respondent : Mr DJ Pratt
Second Respondent : Mr AR Beech SC
Solicitors:
Applicant: Taylor Smart
First Respondent : Jackson McDonald
Second Respondent : Stephen Simpson
Case(s) referred to in decision(s):
Nil
Case(s) also cited:
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The Tribunal held that witness summonses to produce documents, which the applicant had caused to be issued, had not been issued on the initiative of the Tribunal, and had therefore not been issued in accordance with s 66 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act). Further, s 92 of the SAT Act could not be used to waive that non‑compliance as only a procedural requirement could be waived, not a failure to exercise a power. Accordingly, the Tribunal set aside the witness summonses.
In order to act with as little formality and technicality as practicable, as required by s 9 of the SAT Act, the Tribunal acceded to an oral application by the applicant, to consider making orders to produce documents on the same terms as the witness summonses, pursuant to s 35 of the SAT Act. Although the SAT Act does not clearly indicate when s 35 should be used rather than s 66 for the production of documents, the Tribunal held that it would appear s 35 should be used when the production of documents was required prior to the substantive hearing, which is what the applicant required.
After taking into account objections raised in relation to relevance, the Tribunal made orders for production of documents in the same terms as the witness summonses against RSM Bird Cameron, a firm of accountants, and the Clerk of the Northam Court, and in substantially the same terms against a Mr Macdonald, a director of the first respondent, excluding certain direct debit banking records. The Tribunal declined to make an order against the National Australia Bank to produce its records relating to the direct debit facility.
Background
On 16 May 2005 the Commissioner for Fair Trading (the second respondent) granted the first respondent a credit providers licence pursuant to s 12 of the Credit (Administration) Act 1984 (WA) (the CA Act). The applicant was an objector to the application and, being a person aggrieved by the decision to grant the licence, has applied for a review of that decision.
On 11 November 2005 as a result of a combination of errors on the part of the applicant's solicitors and the Tribunal staff, witness summonses for the production of documents, returnable on 24 November 2005 at 9 am, were issued. The witness summonses were addressed to the proper officer, National Australia Bank Ltd, the proper officer, RSM Bird Cameron and Mr Malcolm Macdonald, being respectively the applicants' bankers, accountants and a director of the first respondent. A member of the Tribunal staff had informed the applicant's solicitors by telephone, in response to an enquiry, that as the applicant sought the summonses to be returnable prior to the date set down for hearing of the substantive application on 28 and 29 November 2005, it would be necessary to make an application, pursuant to s 35 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act). A clerk of the applicant's solicitors had already left the office with the witness summonses with the instructions to have them issued. Although arrangements were made to countermand the instruction, that did not occur and the summonses, as presented, were issued.
Subsequently, on 23 November 2005, further witness summonses were issued addressed firstly to Mr Shane Michael Murphy of the State Solicitors Office and the clerk of the Northam Magistrates Court. These summonses were returnable on the first day of the substantive hearing. The summons in relation to Mr Murphy was to give evidence and to produce documents and that in relation to the clerk of the Northam Magistrates Court was to produce documents.
Documents were delivered up to the Tribunal in response to the witness summonses by National Australia Bank and Bird Cameron. The National Australia Bank objected to producing some of the documents listed in the summons on the basis that they constituted Banker's Books and this was conceded by the applicant. Mr Macdonald disputed that proper service of the witness summons had been effected and further engaged solicitors, for the first time, to represent him in the proceedings and in particular to object to the witness summons. The applicant's solicitors made no issue of solicitors being engaged at such a late stage and in all the circumstances it was accepted that the substantive hearing would have to be vacated. The objection to the witness summonses was adjourned for hearing and so that directions could be made to 28 November 2005 at 2.15 pm.
The scope of the hearing of the objection to the witness summonses was expanded to deal also with the further witness summonses in relation to Mr Murphy and the clerk of the Northam Magistrates Court. As a result of the first respondent admitting that the documents sought to be produced by Mr Murphy had been provided to Mr Murphy by the first respondent, the applicant informed the Tribunal it was no longer necessary to press that particular summons. In relation to the clerk of the Northam Court, documents were provided to the Tribunal in response to the witness summons.
The witness summons objections/application
The first objection to all of the witness summonses is that s 66 of the SAT Act provides that the Tribunal may, by summons signed on behalf of the Tribunal by the Executive Officer, require either the attendance before the Tribunal of any person, or the production before the Tribunal of any document or other material. By sub‑sections (2) and (3) a summons for the attendance of a person before the Tribunal may be issued on the Tribunal's initiative or the request of a party, whereas, a summons for the production of any document or other material may be issued on the Tribunal's initiative. Accordingly, it was submitted for the first respondent that an application had to be made to the Tribunal so that the Tribunal could satisfy itself that it was appropriate for summonses to issue requiring non-parties to produce documents. As that did not occur it was submitted that the summonses should be set aside.
The applicant submitted that the failure to make an application to the Tribunal should be waived under s 92 of the SAT Act. It was submitted that the matter had been fully argued and that no purpose would be served by now requiring an application to be made. Further, if it was considered that the application had to be made under s 35 of the SAT Act, counsel for the applicant made oral application for an order to issue for the persons concerned to produce the documents as listed in the witness summonses.
For the first respondent it was submitted that it was not open to waive compliance under s 92 because that related only to procedural requirements, not the exercise of a power. To that extent Senior Counsel for the second respondent supported the first respondent but stressed that the second respondent adopted a neutral attitude to the parties contentions, and therefore his submissions were limited.
The Tribunal is charged by s 9 of the SAT Act to act fairly and according to the substantial merits of the case and with as little formality and technicality as is practicable. Nevertheless, the Tribunal is bound to comply with the Act. I accept Senior Counsel's submission for the second respondent that the effect of s 66(3) of the SAT Act is that only the Tribunal can cause a summons to issue for the production of documents and the submissions for the first and second respondent that s 92 of the SAT Act does not enable the Tribunal to waive in any way the power invested in the Tribunal. As the witness summonses for the production of documents were not issued on the Tribunal's initiative it follows that they should be set aside.
In my view, the practical way open to resolve the situation is to treat the objection hearing, as suggested by the applicant's counsel, as an oral application under s 35 of the SAT Act. Once it is then determined what documents should be produced, the order of the Tribunal will be for those documents to be produced and that the documents already filed shall constitute a discharge of the obligation to produce. While the SAT Act does not clearly indicate when s 35 should be used rather than s 66 for the production of documents, it would appear that s 35 should be used when it is intended to have documents produced prior to the substantive hearing date which is what the applicant required. In this regard, see the discussion in Pizer J, "Annotated VCAT Act", JNL Nominees Pty Ltd, 2nd ed Melbourne, 2004 at par 3882 discussing the equivalent Victorian provisions.
The documents sought to be produced
I will refer to the documents by reference to the item numbers under which they are described in the schedules to the various witness summonses.
A common objection raised by the first respondent is that disclosure would result in confidential information being disclosed to the applicant who is a trade competitor.
The applicant's solicitors met this point by providing to the Tribunal a draft form of undertaking not to disclose information relating to the identity of persons whom have been customers of the first respondent's business, Rapid Cash, Northam as and from 11 August 2005 (information) in the documents produced pursuant to all the summonses to produce documents issued by the applicant in these proceedings. The undertaking to keep the information confidential precludes disclosure to any person or entity other than solicitors and staff employed by Talbot and Olivier. Further, no copy of the documents would be copied and given to any other person or entity including the applicant. Mr Taylor, for the applicant, confirmed that the undertaking, as expressed in the draft document, was given orally to the Tribunal.
In view of Mr Taylor's subsequent making of an oral application, in case the witness summonses were set aside, that the Tribunal make orders for production of the same documents under s 35of the SAT Act, it must be taken that the terms of the draft undertaking apply to any orders for production made by the Tribunal with any necessary changes.
National Australia Bank
Item 1
This relates to direct debit facility documents in place with the bank for the first respondent or Malcolm Macdonald and Susan Macdonald previously trading as "Aussie Cash", Northam. The documents are specified in a number of sub‑paragraphs to include the application for the facility, all relevant agreements in relation to it and all direct debit authorities in place in respect of the facility for the period 1 March 2004 to 31 October 2004 (period).
The relevance and need for these documents is said to be justified by reference to par 29.6 of the applicant's Statement of Issues, Facts and Contentions where it is alleged that the first respondent and Mr and Mrs Macdonald, through the first respondent, fraudulently debited money from the accounts of at least one customer of the former Northam business (Ms Rankin) to the benefit of the first respondent under direct debit authorities conferred only in favour of Interim Advance Corporation Pty Ltd (interim). Interim had granted a franchise to Mr and Mrs Macdonald who until August 2004 had operated the former Northam franchise business under the style "Aussie Cash".
It is submitted that the applicant could only make specific allegations of such a serious nature in relation to the one transaction of which he is aware, but that if the alleged fraud occurred once, then all of the documents should be produced because it is likely that the same occurred in relation to other former clients of the "Aussie Cash" franchise.
The first respondent argues that the applicant is on a "fishing expedition", that it is an attempt to look for other bases of attack.
The applicant's solicitors have conveyed their difficulty quite clearly and that is that it was not appropriate, having regard to the obligations placed on counsel, not to plead serious allegations without a reasonable belief that there is evidence available to support the allegations. Although the Tribunal is not bound by the rules of pleading that is obviously the proper and correct approach. In recognising that, it becomes evident that the applicant should not be entitled to documents other than relating to the particular transaction in relation to which allegations have been made.
In my view, the allegation made is not wide enough to support production of the documents sought. The formula "at least one" in this context can properly convey only that in relation to the one transaction the alleged fraud occurred. If it is intended to draw a wider inference and use that as a basis for production of documents, then the inference should have been stated in the Statement of Issues, Facts and Contentions and the basis for the inference should have been set out.
The applicant also specifically seeks the direct debit facility documents relating to the "Rankin transaction" from Mr Macdonald under the witness summonses addressed to him.
A court or tribunal should only require the production of documents from third parties that are necessary for the proper administration of justice: see Seaman P, "Civil Procedure Western Australia", Vol 1, Butterworths, 1990 par 26.4.14. As the documents relating to the Rankin transaction are apparently available from Mr Macdonald who as a director of the respondent, is directly involved in these proceedings, there is no need for any documents within this category to be produced by the National Australia Bank. If it should later transpire there is any difficulty in obtaining the documents from Mr Macdonald the applicant can have liberty to apply. All of the documents delivered by the bank will be held by the Tribunal pending final determination of the matter.
Item 2
This item relates to a claim for the production of bank statements listing all transactions for the period in relation to four identified accounts.
As indicated above, the bank objected to the production of these records as constituting Banker's Books and the applicant concedes the objection.
Item 3
Under this item the production is sought of a letter written by the first respondent's solicitors to the bank dated 29 November 2004.
The applicant sought to justify the production of this letter on the basis of the allegations set out in par 12.2(b)(ii) and par 14.4 of the applicant's Statement of Issues, Facts and Contentions. Those paragraphs however, deal with when particular disputes arose and referred to "a calculated attempt" to enjoy the benefit of the goodwill and systems of the "Aussie Cash" business while Mr and Mrs Macdonald ceased operating the former Northam business but operated effectively the same business under the name of "Rapid Cash" through the first respondent. In context, the allegations are a criticism of a conclusion stated by the second respondent in deciding to grant the credit provider's licence to the first respondent.
The applicant's counsel conceded that none of this had any relevance to the bases now advanced by the applicant on which it contended that the State Administrative Tribunal should find that the first respondent should not be granted a licence as set out in par 29.6 to par 29.11 of the applicant's Statement of Issues, Facts and Contentions.
The applicant is accordingly not entitled to production of the letter in question.
Item 4
The documents sought under this item are correspondence or records of any communication for the period between the first respondent or Mr and Mrs Macdonald and the bank relating to a change in the business being operated by Mr and Mrs Macdonald and/or the first respondent from a business trading as "Aussie Cash" or "Aussie Cash, Northam" to a business trading as "Rapid Cash" or "Rapid Cash, Northam".
Again, the applicant attempted to justify the relevance and need for these documents on the basis of the allegations made in par 12.2(b)(ii) and par 14.4 of the applicant's Statement of Issues, Facts and Contentions. For the same reasons as given in relation to Item 3 above the applicant is not entitled to production of these documents.
Malcolm Macdonald
Item 1
Under this item, documents are sought relating to any transaction entered into between Malcolm Macdonald and/or Susan Macdonald trading as "Aussie Cash", Northam and Ms Nicole Rankin, including a range of specified cash advance applications, facility and transaction advice documents and direct debit authorities.
I refer to the consideration above of the documents sought under Item 1 of the National Australia Bank summons. On the basis of what is there set out I consider that the documents sought under this item are relevant to the allegations made in par 29.6 of the applicant's Statements of Issues, Facts and Contentions. The documents sought are restricted to the transaction stated and Mr Macdonald should be ordered to produce them.
Item 2
Under this item all documents including the electronic version, the original and any copied documents in the form of, or a similar form, to four attached documents are sought.
It is alleged in par 29.7 of the Statement of Issues, Facts and Contentions that Mr Macdonald manufactured an E‑mail communication dated 12 April 2004. The four documents all relate to this E‑mail.
I consider that the documents sought are relevant to the review and that Mr Macdonald should be ordered to produce them.
Item 3
The documents sought under this item are the same as those described in Item 1 of the National Australia Bank summons. For the same reasons as set out above in relation to that item, I do not consider that the applicant is entitled to the production of these documents.
Item 4
The documents sought under this item are bank statements listing all transactions for the period, that is, 1 March 2004 to 31 October 2004 in relation to four identified bank accounts.
The bank accounts were identified in the first respondent's application for the credit provider licence. In terms of s 12 of the CA Act one of the grounds on which the Commissioner may refuse an application is, in the case of an application made by a body corporate, that it does not have, or is not likely to continue to have, sufficient financial resources to enable it to carry on business pursuant to the authority that would be conferred by the licence if it were granted.
As it is not disputed that the bank accounts were identified and that the then balances of each account were given to support the original application for the licence, the operation of those accounts is obviously relevant to the current application.
The applicant's counsel advised the Tribunal that the period had been selected because it covered a period both before and after the termination of the franchise in August 2004. This was stated in the context of an exchange in relation to the direct debit facility documents. It was stated that this would enable the applicant to check whether clients prior to the termination had continued to have direct debits entered against their accounts.
Again, the first respondent's general criticism was that the applicant was on a "fishing expedition".
For the reasons given above in relation to the direct debit facility, I do not consider that the applicant should be entitled to the account details for the period based on the alleged fraud in relation to at least one customer argument. However, as indicated, I consider that the financial standing of the first respondent is relevant. But, bank statements listing all transactions during the period 1 March 2004 to 31 October 2004 will be of no assistance to the Tribunal in assessing, as at the date of the review, whether or not the first respondent has the necessary financial resources. Under s 27 of the SAT Act, the review of a reviewable decision is by way of a hearing de novo, it is not confined to matters that were before the decision‑maker but may involve the consideration of new material whether or not it existed at the time the decision was made. The purpose of the review is to produce the correct and preferable decision at the time of the decision upon the review.
In the circumstances, the Tribunal will order the production of bank statements for the period 1 November 2005 to 31 January 2006. The matter will be set down for final hearing on 6 and 7 February 2006 having regard to the unavailable dates provided to the Tribunal by the parties.
Item 5
Under this item, correspondence or record of any communication for the period is sought relating to the change in business as particularised above in relation to Item 4 of the National Australia Bank summons. For the same reasons as there stated, the applicant is not entitled to the production of these documents.
Item 6
Under this item the applicant seeks production of all documentation relating to the Phoenix Trust including, a copy of any Trust Deed, and any correspondence concerning the Phoenix Trust or its operations.
The Phoenix Trust holds one of the accounts referred to under Item 4 above. The applicant contended it is necessary to produce the Trust Deeds to ascertain whether the first respondent is beneficially entitled to the funds held by the trust. I accept that is sufficient basis to require the Trust Deed to be produced. However, the request for all documentation relating to the Phoenix Trust including any correspondence concerning the Trust or its operations goes beyond what is necessary. It is the first respondent's financial capacity as at the date of review only which is relevant. The Tribunal orders will reflect this conclusion.
Item 7
Under this item the applicant claims production of documents relating to a debt owing to a Mrs Carr.
The first respondent and/or Mr Macdonald did not maintain any objection to the production of the documentation relating to this debt as the Tribunal was advised that the debt had been repaid in full.
Item 8
The applicant sought production of documents relating to a debt owing to WJ and LJ Moloney or any person or entity or entities associated with them.
The existence of the debt and whether or not arrangements to repay it have been maintained, are obviously relevant to financial capacity. The first respondent's and/or Mr Macdonald's objection related to the specific request for any correspondence in relation to such liability. The applicant agreed to meet this objection by restricting the correspondence sought to correspondence evidencing the liability. The Tribunal will order accordingly.
Bird Cameron
Item 1
Under this item the applicant claims production of documents relating to the preparation of a projected taxable income and taxation estimate for the year ending 30 June 2005 for "Rapid Cash", Northam and/or Mr Malcolm Macdonald including related documents as described.
The documentation request is obviously relevant to the financial capacity issue and the Tribunal will order accordingly.
Item 2
Under this item documentation is sought relating to the preparation of a trial balance as at 21 March 2005 of the Macdonald Family Trust trading as "Rapid Cash, Northam" including specified related documents.
As in relation to Item 1, the documents are obviously relevant to the financial capacity issue and the Tribunal will order production accordingly.
Clerk, Northam Magistrates Court
Item 1
Under this item the applicant seeks production of all summonses issued by the first respondent in the period from 1 April 2004 to 31 October 2004.
The applicant submits that the documents are relevant and necessary by reason of the allegation made in par 29.10 of the applicant's Statement of Issues, Facts and Contentions. It is there alleged that Mr Macdonald and the first respondent, in breach of the Debt Collectors Licensing Act 1964 (WA), acted to collect debts in the name of the first respondent when the debts were owed to Mr and Mrs Macdonald.
The documents sought are relevant to the above issue and the Tribunal will make an order for their production.
Orders
For the above reasons and on the undertaking of the applicant's solicitors, the Tribunal orders as follows.
1.The summons to witnesses dated 11 November 2005 addressed to the National Australia Bank, RSN Bird Cameron and Malcolm Macdonald, and those dated 23 November 2005 addressed to Shane Michael Murphy and to the Clerk, Northam Magistrates Court be and are hereby set aside.
2.Pursuant to s 35 of the State Administrative Tribunal Act 2004 the Tribunal orders:
2.1Malcolm Macdonald, within 14 days of the date of this order, to produce:
2.1.1All documents relating to any transaction entered into between Malcolm Macdonald and/or Susan Macdonald trading as Aussie Cash Northam and Ms Nicole Rankin (nee Griffiths) (transactions) including:
2.1.1.1all cash advance applications;
2.1.1.2all facility and transaction advice documents;
2.1.1.3all direct debit authorities signed by Ms Rankin;
2.1.1.4all records showing interest, fees and charges;
2.1.1.5all records showing payments;
2.1.1.6all letters of demand or other correspondence with Ms Rankin; and
2.1.1.7all summonses or plaints issued to Ms Rankin.
2.1.2All documents including the electronic version, the original and any copy documents in the form of, or a similar form, to those attached and marked "A" to "D" respectively.
2.1.3The bank statements of the bank listing all transactions for the period 1 November 2005 to 31 January 2006 in relation to:
2.1.3.1account number 086‑334‑ 56‑338 8109 (apparently described as NAB General);
2.1.3.2account number 086‑334 57‑341‑1608 (apparently described as Phoenix Trust);
2.1.3.3account number 086‑334 57‑341‑1608 (apparently described as Royalty Trust); and
2.1.3.4account number 086‑334 57‑233‑4647 (apparently described as Term Deposit).
2.1.4A copy of the Trust Deed relating to the Phoenix Trust.
2.1.5All documentation relating to the liability of Malcolm Macdonald and/or Susan Macdonald to Helen Stephanie Carr (Mrs Carr) or any person or people or any entity or entities associated with Ms Carr in the amount of approximately $11 000 as at March 2005 (Carr liability) including:
2.1.5.1any agreement or agreements in relation to the Carr liability;
2.1.5.2any correspondence in relation to the Carr liability; and
2.1.5.3any statements of account or other record of payments in respect of the Carr liability.
2.1.6Any documentation relating to the liability of Malcolm Macdonald and/or Susan Macdonald to WJ & LJ Moloney (Moloneys) or any person or people or any entity or entities associated with the Moloneys in the amount of approximately $20 085.30 as at 21 March 2005 (Moloney liability) which constitutes:
2.1.6.1an agreement or agreements in relation to the Moloney liability;
2.1.6.2correspondence evidencing the Moloney liability; and
2.1.6.3statements of account or other record of payments in respect of the Moloney liability.
2.2That RMS Bird Cameron, by a proper officer, produce within 14 days of the date of this order:
2.2.1All documentation relating to the preparation of the Projected Taxable Income and Taxation Estimate for the Year Ended 30 June 2005 (projection) for Rapid Cash Northam and/or Mr Malcolm Macdonald and/or Mrs Macdonald including:
2.2.1.1all documentation provided by Mr Malcolm Macdonald and/or Mrs Susan Macdonald in order to assist in preparation of the projection; and
2.2.1.2all working papers in preparation of the projection.
2.2.2All documentation relating to the preparation of the trial balance as at 21 March 2005 of the Macdonald Family Trust trading as Rapid Cash Northam (trial balance) including:
2.2.2.1all documentation provided by Mr Malcolm Macdonald and/or Mrs Susan Macdonald in order to assist in preparation of the trial balance; and
2.2.2.2all working papers in preparation of the trial balance.
2.3The Clerk, Northam Magistrates Court, produce within 14 days of the date of this order all summonses issued by Van May (WA) Pty Ltd in the period from 1 April 2004 to 31 October 2004.
3.1The documents already produced to the Tribunal by RSM Bird Cameron and the Clerk, Northam Magistrates Court be held by the Tribunal and constitute compliance with the above orders.
3.2The parties have leave, subject to prior arrangement with the Tribunal, to inspect and at their cost copy the above documents and the documents to be produced by Malcolm Macdonald.
4.The documents already produced to the Tribunal by the National Australia Bank be held by the Tribunal pending final determination of the application for review.
5.The applicant to forthwith serve a copy of this order on the National Australia Bank, RSM Bird Cameron and the Clerk, Northam Magistrates Court. Provision of this order to Jackson Macdonald by the Tribunal shall be taken to constitute service upon Malcolm Macdonald.
6.The costs of and incidental to compliance with the witness summonses issued by the applicant and the costs of the hearing on 28 November 2005 be reserved.
7.The matter is adjourned to a hearing on 6 and 7 February 2006 commencing at 10 am on 6 February 2005.
8.The parties have liberty to apply.
I certify that this and the preceding [61] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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