Eunice Daphne Washington v Titan Fan Products Australia Ltd

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
EUNICE DAPHNE WASHINGTON v TITAN FAN PRODUCTS AUSTRALIA LTD & ORS
[2021] SASC 124
Judgment of the Honourable Justice Stanley
PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - INHERENT AND GENERAL STATUTORY POWERS - TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY
CRIMINAL LAW - GENERAL MATTERS - OTHER GENERAL MATTERS - STAY OF CIVIL PROCEEDINGS PENDING CRIMINAL PROCEEDINGS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS
The Applicant seeks the removal of a stay order over civil proceedings. Interlocutory orders made on 17 September 2020 and subsequently extended on 3 December 2020 pursuant to r 12.1 of the Uniform Civil Rules 2020 (SA) (UCR) stayed actions No 969 of 2017 (the 2017 action) and No 1070 of 2019 (the 2019 action) until a criminal investigation was finalised as against the Fourth Respondent.
The civil proceedings were originally brought by the Applicant by her Litigation Guardian against the Respondents and involved, inter alia, a dispute between the Applicant and her daughter, the Fourth Respondent, over control of assets including the family business that was established by the Applicant and her husband who is now deceased, and his estate. In January 2019 the Applicant’s daughter-in-law, on behalf of the Applicant, made a complaint to the police concerning the Fourth Respondent’s conduct which resulted in the criminal investigation.
The Police have since “filed” their investigation as against the Fourth Respondent which, it was submitted, has the effect of it being closed. The Applicant therefore now applies to the Court for a discharge of the stay order on the basis that there has been a material change in the circumstances since the stay was granted.
Held:
1. Application to discharge the stay order is granted.
2. Parties to be heard on costs and any other orders they seek consequent upon the discharge of the stay order.
Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; CFMEU v ACCC (2016) 242 FCR 153; McMahon v Gould (1982) 7 ACLR 202; Ransley v Commissioner of Taxation [2016] FCA 778; Obeid v Commissioner of Taxation [2017] FCA 1135; McLachlan v Browne (No 9) [2019] NSWSC 10; Websyte Corporation Pty Ltd v Alexander (No. 2) [2012] FCA 562; ASIC v ActiveSuper Pty Ltd (No. 5) [2013] FCA 369; Citation Resources Ltd v Landau 116 ACSR 410; CC Containers Pty Ltd & Ors v Lee & Ors (No. 2) [2012] VSC 149; Clairs Keeley (A Firm) v Treacy & Ors [2004] WASCA 277; Fanissa Pty Ltd v Tanya Versace [2016] VSC 416; Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44, discussed.
Eunice Daphne Washington (by her Litigation Guardian Edward Michael Byrt) v Titan Fan Products Australia Ltd & Ors [2020] SASC 230, considered.

EUNICE DAPHNE WASHINGTON v TITAN FAN PRODUCTS AUSTRALIA LTD & ORS
[2021] SASC 124
STANLEY J:
Introduction

The applicant, Eunice Daphne Washington (Eunice), by her litigation guardian, has instituted civil proceedings concerning, inter alia, disputes between her and her daughter, Julie Ann Washington (Julie), over control of assets including the family business that was established by Eunice and her late husband, Lincoln Washington (Lincoln) and his estate.
Background
In January 2019, Karen Washington (Karen), Eunice’s daughter-in-law, on behalf of Eunice, made a complaint to SA Police concerning Julie’s conduct towards her parents. The terms of her complaint substantially mirrored the claims made against Julie in the civil proceedings. Those civil proceedings were listed for trial in November 2020.
In response to Karen’s complaint to police, SAPOL commenced a criminal investigation and seized two safety deposit boxes and their contents allegedly belonging to Julie, from her bank.
On Julie’s application I granted a stay of the civil proceedings and made other associated orders. In granting the stay I had regard to the following principles:
1.Courts have the power to control their proceedings and to order a stay in an appropriate case. It will be appropriate to do so where the interests of justice require such an order.[1]
2.A plaintiff is prima facie entitled to have civil proceedings tried in the ordinary course. Accordingly, a stay requires justification on proper grounds.[2]
3.The burden of demonstrating the existence of proper grounds for a stay is on the applicant.[3]
4.A court will not grant a stay of a civil proceeding merely because related charges have been brought against an accused and criminal proceedings are pending. A stay of civil proceedings may be warranted if it is apparent that the accused is at risk of prejudice in the conduct of his or her defence in a criminal trial.[4]
5.The risk of prejudice must be real, and in considering what the interests of justice require, that risk is to be weighed against the prejudice that a stay of the civil proceedings would occasion.[5]
6.Prejudice to the accused’s right to silence or privilege against self‑incrimination is a relevant and important factor in the exercise of the discretion.[6] Some cases place this as the paramount consideration in the assessment of whether to grant a stay.[7]
7.It may not be necessary for the applicant seeking the stay to state the specific matters of prejudice before a stay could be contemplated. As the High Court said in Zhao:[8]
To require the second respondent to do so would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid.
8.It is not necessary for the applicant for the stay to have been charged with a criminal offence. The real risk of prejudice or injustice can relate to an actual or potential criminal proceeding.[9] It is sufficient that a criminal charge or charges is or are “on the cards”. The expression “on the cards” has been interpreted to mean reasonably possible or a reasonable possibility.[10] Where allegations in a civil proceeding are of a very serious nature and magnitude, the pleading alone may be sufficient to establish that there is a real risk of criminal prosecution should the matters alleged be proven.[11]
[1]    Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [36], (2015) 255 CLR 46 at 58; CFMEU v ACCC [2016] FCAFC 97 at [22], (2016) 242 FCR 153 at 160.
[2]    McMahon v Gould (1982) 7 ACLR 202 at 206.
[3]    McMahon v Gould (1982) 7 ACLR 202 at 206.
[4]    Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [35], (2015) 255 CLR 46 at 58; CFMEU v ACCC [2016] FCAFC 97 at [22], (2016) 242 FCR 153 at 160.
[5]    Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [47], (2015) 255 CLR 46 at 60-61; CFMEU v ACCC [2016] FCAFC 97 at [22], (2016) 242 FCR 153 at 160; Ransley v Commissioner of Taxation [2016] FCA 778 at [22].
[6]    Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [42]-[47], (2015) 255 CLR 46 at 59-61; CFMEU v ACCC [2016] FCAFC 97 at [23], (2016) 242 FCR 153 at 160; Ransley v Commissioner of Taxation [2016] FCA 778 at [24]-[30]; Obeid v Commissioner of Taxation [2017] FCA 1135 at [4].
[7]    McLachlan v Browne (No 9) [2019] NSWSC 10 at [47].
[8]    Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [43], (2015) 255 CLR 46 at 59-60.
[9]    Websyte Corporation Pty Ltd v Alexander (No. 2) [2012] FCA 562 at [117].
[10] ASIC v ActiveSuper Pty Ltd (No. 5) [2013] FCA 369 at [18]; Citation Resources Ltd v Landau [2016] FCA 1114 at [49], (2016) 116 ACSR 410 at 423.
[11] CC Containers Pty Ltd & Ors v Lee & Ors (No. 2) [2012] VSC 149 at [18].
I granted the stay being satisfied that the subject matter of the criminal investigation undertaken by SAPOL generally concerned the same matters the subject of the civil proceedings. They involved serious allegations of unlawful conduct by Julie. The police evidence that I relied upon in granting the stay satisfied me that Julie was exposed at the time of making the order to a real risk of criminal charges as a result of the SAPOL investigation. I was satisfied that the grant of a stay was necessary to ensure that Julie was not placed at a real risk of self-incrimination in defending the civil proceedings or depriving herself of a proper defence of those proceedings in order to avoid that risk. At that time I considered that the prejudice to Julie outweighed the prejudice that the stay of proceedings would occasion Eunice.
The current application
Eunice now applies to the Court for an order discharging the stay. The basis of the application is her contention that there has been a material change in circumstances since the stay was granted last year. That change is the “filing” of the investigation into Julie’s conduct by SAPOL. Eunice submits that the effect of the decision to file the investigation is that SAPOL has effectively closed the investigation.
The Court heard evidence from Detective Sergeant Paul Featherstone, the officer supervising Detective Gary Rivett, who was the officer conducting the criminal investigation. He gave evidence that the police have filed the investigation on the basis that as things stand there is no reasonable prospect of obtaining a conviction. There were various reasons given for this conclusion. Those reasons are that Lincoln is now dead, Eunice cannot remember any substantial detail concerning the substance of the allegations in the civil proceedings, she has stated on several occasions that she is not prepared to go to Court and give evidence against Julie, and Julie has declined to give a statement to the police or participate in a formal record of interview. However, under cross-examination Detective Sergeant Featherstone indicated that notwithstanding the filing of the investigation it could be reopened if new evidence became available which would lead police to reconsider the prospects of obtaining a conviction.
The condition precedent for discharge of an order staying a proceeding is a material change in circumstance or the discovery of new material which could not reasonably have been put before the Court on the hearing of the original application.[12]
[12] Clairs Keeley (A Firm) v Treacy & Ors [2004] WASCA 277 at [7]-[14]; Fanissa Pty Ltd v Tanya Versace [2016] VSC 416 at [18]-[19].
In this matter I am satisfied there has been a material change in circumstance. The filing of the investigation into Julie’s conduct vis a vis her parents, the subject of the civil proceedings means the investigation has effectively, albeit conditionally, been closed. While the evidence from Detective Sergeant Featherstone acknowledges that the filing of the investigation does not preclude its reopening, the reasons for filing the investigation render it unlikely that the investigation will reopen.
The first two reasons why SA Police consider there is now no reasonable prospect of obtaining a conviction will not change. The remaining reasons seem unlikely to change.
I do not overlook that Detective Sergeant Featherstone also acknowledged that if in the civil proceedings Julie filed documents that contained admissions referable to the investigation or gave evidence constituting admissions relevant to the subject matter of the police investigation, that could result in the investigation being reactivated. Obviously I am not in the position to evaluate the risk of either of those occurrences if the stay order is discharged. Nonetheless, the filing of the investigation is a material change in circumstances since I granted the stay. Whether a material change in circumstances should result in the discharge of the stay order is to be decided by reference to what the interests of justice require in the particular circumstances of the case.[13] Considerations of the interests of justice in the particular circumstances of this case call attention to the principles relevant to the original grant of a stay of proceedings identified in my earlier judgment.[14] A material change in circumstances having occurred, the issue becomes whether proper grounds exist to maintain the temporary stay I granted in September 2020. Whether to discharge the stay involves the exercise of discretion based on an evaluative judgment.
[13] Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44.
[14] Eunice Daphne Washington (by her Litigation Guardian Edward Michael Byrt) v Titan Fan Products Australia Ltd & Ors [2020] SASC 230 at [5].
I granted the stay because I considered it necessary in the circumstances that existed at that time to ensure that Julie was not placed at a real risk of self-incrimination in defending the civil proceeding or depriving herself of a proper defence to those proceedings in order to avoid that risk. I granted the stay because, at that time, the prejudice to Julie in not granting a stay outweighed the prejudice that the stay of the proceedings would occasion Eunice.
In my view the balance in weighing the prejudice each would suffer if the stay is not discharged now has shifted from the balance of the prejudice that led me to grant the stay in September 2020. At that time the risk of criminal proceedings was “on the cards”. That is no longer the case. While the risk that the criminal investigation could be reactivated cannot be entirely excluded, the risk of Julie facing criminal proceedings has significantly diminished. Eunice enjoys a prima facie entitlement to have her civil proceedings tried in the ordinary course. A court will not grant, or continue, a stay of civil proceedings merely because related charges have been brought against an accused and criminal proceedings are pending. A stay of civil proceedings may be warranted if it is apparent that the accused is at risk of prejudice in the conduct of his or her defence in a criminal trial.[15] The risk of prejudice must be real, and in construing what the interests of justice require, that risk is to be weighed against the prejudice that a stay of the civil proceedings would occasion.[16]
[15] Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [35], (2015) 255 CLR 46 at 58; CFMU v ACCC [2016] FCAFC 97 at [22], (2016) 242 FCR 153 at 160.
[16] Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 at [47], (2015) 255 CLR 46 at 60-61; CFMU v ACCC [2016] FCAFC 97 at [22], (2016) 242 FCR 153 at 160; Ransley v Commissioner of Taxation [2016] FCA 778 at [22].
Julie contends that notwithstanding the filing of the police investigation, the change in circumstances since the making of the original stay order is not material. The filing of the investigation in the circumstances that exist, does not support an exercise of the Court’s discretion to discharge the stay. If the stay were to be discharged and the civil proceedings resume, Julie would be left in a position of having to file affidavits and other documents setting out her version of what happened and thereby making statements which could be used as admissions against her interest. In addition, if and when the matter came to trial she would have to make an election whether to give evidence which again could be used as admissions by her if the police were to reactivate the investigation.
I accept the potential exists that if the stay is discharged Julie would confront this dilemma. But the significant fact remains that there is no longer an investigation into her conduct by the police. The only risk that exists if the stay is discharged is that Julie may do or say something in these civil proceedings, which may persuade the police that some proper basis then exists to reactivate the criminal investigation into her conduct. I accept the submission of Eunice that this risk is no different from that faced by any litigant in civil proceedings where the allegations in those proceedings might constitute allegations of criminal conduct. In the circumstances that now exist, where an investigation is no longer on foot and charges are no longer “on the cards”, a decision by Julie to give or not give evidence in the criminal proceedings is not a risk sufficient to warrant the continuation of the current stay. Otherwise, most civil proceedings that allege conduct that might constitute criminal offending would be at risk of being stayed, notwithstanding that a criminal investigation is not being undertaken, and charges have not been laid and are not “on the cards”.
The potential that the civil proceedings might be amended on Eunice’s application to include allegations concerning the contents of the deposit boxes does not alter the evaluative judgment that weighing the respective prejudices the interests of justice no longer warrant a continuation of the stay.
Eunice is now 88 years of age. At issue in the civil proceedings is the entitlement to various amounts of money totalling nearly $1.1 million, land held by the Titan Family Trust at Gepps Cross, and shareholdings in the family businesses, Titan Fan Products Australia Pty Ltd and Titan Poultry Equipment Ltd. Until these civil proceedings are finalised, Eunice’s claim to an entitlement to those assets remains unresolved. She is entitled to have those proceedings heard and determined in the ordinary course.
Conclusion
I would grant the application to discharge the stay order originally made by me on 17 September 2020 and subsequently extended by further orders made by me. I would hear the parties as to costs and other orders they seek consequent upon the discharge of the stay order.

[2021] SASC 124

3 November 2021