Fregnan v Stanizzo; Stanizzo v Badarne; Stanizzo v State of New South Wales

[2019] NSWSC 628

Supreme Court

New South Wales

Medium Neutral Citation:	Fregnan v Stanizzo; Stanizzo v Badarne; Stanizzo v State of New South Wales [2019] NSWSC 628
Hearing dates:	28 and 29 May 2019
Date of orders:	31 May 2019
Decision date:	31 May 2019
Jurisdiction:	Common Law
Before:	Harrison J
Decision:	See judgment
Catchwords:	PROCEDURE – civil procedure – where plaintiff claims damages for malicious prosecution – whether plaintiff should be granted leave to tender statement previously rejected – whether statement is relevant to a fact in issue – whether tender of statement would cause unfair prejudice to defendant – where plaintiff also seeks leave to tender series of tax invoices – whether tax invoices qualify as evidence in reply – whether tender of tax invoices would cause unfair prejudice to defendant – tender of statement and tax invoices rejected   PROCEDURE – civil procedure – where defendant seeks to set aside plaintiff’s notices to produce – whether notices to produce have legitimate forensic purpose – notices to produce set aside
Cases Cited:	Stanizzo v Badarne [2019] NSWSC 74
Category:	Procedural and other rulings
Parties:	Karina Vivianna Fregnan Vincent Francis Stanizzo Muhammad Badarne State of New South Wales
Representation:	Counsel: C Waterstreet and M Rollinson (V Stanizzo) A Macauley (M Badarne) N Newton and T Buterin (State of NSW)
File Number(s):	2012/129649; 2014/92425; 2016/296293
Publication restriction:	Nil

Judgment

1. HIS HONOUR: Mr Stanizzo has sought leave to read a statement made by him dated 21 February 2019. I previously rejected an application to read the statement upon the basis that it was not relevant to any issue in the proceedings. Mr Stanizzo has revived the application in his case in reply.

2. The statement is in the following terms:

“In 2008, I was acting for my then client Mr George Dimitrovski, the principal of Bevans Real Estate agency, in the matter of the misappropriation of funds by a former employee of the agency, Ms Robyn Boyd-Jones. Rental bonds had been collected from tenants by Boyd-Jones on behalf of the agency but she had failed to remit them to the Rental Bonds Board but had misappropriated them to her own use.

2. I contacted Wollongong Police about the matter. Detective Sergeant Jason Hogan, and another officer whose name I do not remember, visited my office. I explained the situation to them and said that a report would be obtained from an accountant. Hogan said that when such report was available I should contact Police again.

3. A report was obtained by Mr Melvin Bell, accountant, and I arranged to visit Hogan at Wollongong Police Station. I did so with my client Mr Dimitrovski. I handed a copy of the report to Hogan and the conversation was to the following effect.

Stanizzo: ‘This is the report prepared by Mel Bell, the accountant. It contains evidence of many misappropriations of the rental bonds that have been received by Boyd-Jones but not sent on to the Rental Bonds Board as required by law. This lady has now absconded to Queensland. There have been some telephone discussions between Bell and her about returning the money. My client believes she should be charged and extradited to New South Wales.’

Hogan flicked through the pages of the report, sat back and said:

‘I’m not prepared to waste Police resources on this matter. We are not a debt collector for your client.’

Stanizzo: ‘But it is your duty to charge this lady for embezzlement and misappropriation. As you know, they are criminal offences.’

Hogan: ‘Well, Police will not be doing anything about this. Your client can take civil action to recover the money.’

Stanizzo: ‘I don’t need to be told what to do. I’m saying to you what you should be doing about the criminal offences committed by this lady.’

Hogan looked at me silently.

Stanizzo: ‘Are you going to do anything about it?’

Hogan: ‘No.’

I stood up and said: ‘Your attitude would have been different if my client was an Australian and the perpetrator was a Macedonian.’

Hogan: ‘Get out of here, before I have you thrown out.’

4. My client and I walked out of Hogan’s office. On my way out I turned around and said to Hogan:

‘You’ll be hearing from me about this is [sic] due time.’

5. My client was then in dire financial situation and had no desire to get into another dispute with the Police.

6. About two years ago, I went into the showroom at Corbin Motors, Flinders Street, Wollongong. I saw that Hogan was there looking at a car on display. I spoke to him.

Stanizzo: ‘Hogan, don’t hide behind the car. You put that idiot Murdock on to me to get me, didn’t you?’

Hogan looked at me, said nothing and walked away.

I have not seen or heard from Hogan since then.”

3. Mr Stanizzo contends that this statement is capable of supporting an inference that former Detective Murdock acted maliciously in prosecuting him. That is said to be so inasmuch as Detective Hogan was Mr Murdock’s superior at the Wollongong Police Station when the first incident described in the statement occurred and that an inference arises that Mr Murdock was or may have been influenced against Mr Stanizzo by Detective Hogan whose animus for Mr Stanizzo is said to be evident from the manner in which he dealt with Mr Stanizzo’s report about his client. Mr Stanizzo contends that this inference is strengthened by the fact that Detective Hogan was Mr Murdock’s superior officer in Wollongong when Mr Murdock investigated the complaints against Mr Stanizzo made by Ms Fregnan and Mr Badarne and eventually charged him with the relevant offences.

4. The State of New South Wales objects to the tender. First, the statement was never included in the court book in accordance with the directions of Rothman J and Mr Stanizzo should not now be entitled to rely upon it in his case in chief if an application to reopen his case for that purpose is made. Secondly, the statement does not qualify as evidence in reply because the fleeting references to Detective Hogan in some COPS reports that have been tendered do not provide a sufficient basis for its tender as such.

5. In my opinion, there is a significantly more fundamental basis for rejecting the statement. Mr Stanizzo suspects that Mr Murdock was or might have been influenced against him by Detective Hogan’s apparent disaffection for Mr Stanizzo. In my opinion, the statement does not even closely approach the type of evidence that would warrant the drawing of an inference of that type. There is no evidence that Detective Hogan ever said anything to Mr Murdock about this incident or that he expressed any opinion, favourable or otherwise, about Mr Stanizzo that he might have held. The fact that both men worked in the same police station and that they were both concerned with police action taken with respect to the charges brought against Mr Stanizzo does not in my opinion mean that his statement thereby becomes relevant to the proof of a fact in issue in these proceedings.

6. I accept that proof by Mr Stanizzo of the existence of some anterior or pre-existing malice towards Mr Stanizzo on the part of Mr Murdock may be relevant to the question of whether or not he maliciously instituted or maintained the proceedings against him. The somewhat unremarkable fact that Mr Murdock worked as a junior officer to Detective Hogan who acted dismissively, and on one view inappropriately, when dealing with Mr Stanizzo’s report, does not easily translate to proof, even by inference, that Mr Murdock might or must also have shared the same attitude arguably held or evinced by Detective Hogan merely as the result of the apparently close professional relationship that they shared.

7. I am also of the view that it is now too late in the day to permit this statement to be utilised by Mr Stanizzo. It would be unfair to the State to receive it in circumstances where Detective Hogan’s response has not been sought and where further investigation of the circumstances referred to in the statement has not been undertaken. Moreover, the circumstances described in the statement are not offered as particulars of malice in the current statement of claim. Having regard to the somewhat tenuous relationship between the events described and the malice alleged, the absence of particularisation of these events is arguably quite significant.

8. I reject the tender of the statement.

9. Mr Stanizzo next tenders a series of tax invoices issued to what the parties have described or referred to as the Ayoub interests. That description encompasses a selection of clients of the firm V F Stanizzo of which at all relevant times Mr Stanizzo was the principal and for whom Mr Badarne worked at one time as an employed solicitor. The tender is made having regard to the following (briefly described) circumstances.

10. Mr Stanizzo alleges that Mr Badarne prosecuted him maliciously on charges of intimidation upon the basis of things said during conversations between Mr Stanizzo and Mr Badarne. These conversations are recorded and transcribed. Mr Stanizzo contends that Mr Badarne was motivated to complain to the police about these matters because of a breakdown in their professional relationship, including significant disputes over the terms and implementation of costs sharing arrangements, in particular in accordance with a Deed of Settlement made 30 July 2010 and the making of complaints by each man against the other to the Law Society or the Office of the Legal Services Commissioner. One of the areas of dispute between the men concerns the validity or otherwise of a deed pursuant to which Mr Badarne was paid the sum of $200,000 on certain conditions in order to assist him with the purchase of a house. Mr Stanizzo alleges in these proceedings that the money so paid was in fact a payment by the Ayoub interests of costs due to the firm, which were or would have become subject to the costs sharing arrangement but which were improperly diverted by Mr Badarne to his own personal use under the cloak of an allegedly sham transaction.

11. The tax invoices that Mr Stanizzo now wishes to tender are said to be memoranda of fees due to V F Stanizzo from the Ayoub interests in respect of monies owing to the firm as professional fees which the Ayoub interests instead paid, at least in part, allegedly to Mr Badarne. Mr Stanizzo wishes to tender the invoices to prove not merely that they were issued but also to establish that Mr Stanizzo maintained that the amounts claimed were in fact due and payable to the firm. Mr Stanizzo proposes to rely upon the invoices in order to give content to his allegation that Mr Badarne improperly diverted fees owing to the firm by the Ayoub interests and to negative the suggestion that there was nothing owing for Mr Badarne to deal with in the way alleged.

12. Mr Badarne does not oppose the tender of one of the invoices dated 10 March 2010 upon the basis that it is admitted as proof only of the fact that it was issued for the amount that it claims. All of the invoices are objected to by Mr Badarne to the extent that Mr Stanizzo tenders them for unlimited purposes.

13. The invoices are in fact evidence that Mr Stanizzo wishes to rely upon as part of his case in chief. They do not and, having regard to the evidence tendered by Mr Badarne, could not qualify as evidence in reply.

14. In my opinion the tender should be rejected. This material was not included in the court book and should have been. If the tender is pressed upon the basis that the amounts claimed are owing in fact, Mr Badarne should have been given notice of the proposed tender in order to take such steps, or conduct such investigations, as he may have desired in order to verify their authenticity. He would not have such an opportunity to do so if the documents were admitted into evidence at this very late stage of the proceedings.

15. I note in passing, however, that the schedule to the Deed of Settlement dated 30 July 2010 contains a series of references to files in respect of which Mr Badarne and Mr Stanizzo had agreed to share fees. Several of the files were files that could be described as being in respect of work undertaken on behalf of the Ayoub interests. There is no suggestion that these files were not genuine matters conducted by the firm and that work in progress or completed on these files would be a valuable asset of the firm. The inference that Mr Stanizzo wishes to promote, that there were real monies owing which Mr Badarne might have been able to divert to his own use, is already available on the evidence tendered so far. I hasten to add in that context that Mr Badarne, through his counsel, denies the allegations of impropriety of any sort.

16. I reject the tender of these tax invoices.

17. Mr Stanizzo finally has issued a series of notices to produce. There are eight such notices in all. Not all of the requests for production are either current or controversial. By notice of motion dated 20 May 2019, Mr Badarne seeks to set aside, or to restrain Mr Stanizzo from calling upon, all of the notices in whole or in part. He relies upon his own affidavit sworn 20 May 2019.

First notice to produce

18. This notice seeks production by Mr Badarne of the following documents:

“1. Originals and any copies of pay slips, group certificates, invoices, receipts, tax returns and notices of assessment and all other documents recording receipt of wages or other money from any employment in the period 1 January 2006 to 31 August 2009, including, without limitation, work in any capacity for the University of Wollongong and work distributing advertising pamphlets and doing mailbox drops.

2. Originals of any letter, email or other communication whereby you contend that the plaintiff has made a threat to or used threatening language towards you.

3. Originals of any diary notes or other records of any communication whereby you contend that the plaintiff has made a threat to or used threatening language towards you.

4. Originals of any electronic recording of words spoken by the plaintiff at any time, whether in your presence or by telephone, including without limitation (1) any such recording made on 14 November 2009, and (2) any such recording made pursuant to your decision to record the plaintiff, as alleged by you in paragraph 116 of your Evidentiary Statement in these proceedings dated 8 March 2018.”

19. Mr Stanizzo seeks production of pay slips, group certificates and the like in respect of Mr Badarne’s employment by the University of Wollongong. I have already considered these documents in an earlier judgment: see Stanizzo v Badarne [2019] NSWSC 74 at [15]. I do not consider that Mr Stanizzo has demonstrated that there is any legitimate basis to reconsider that decision.

Second and third notices to produce   

20. The second notice is addressed to Ahmad Abu Ria, care of Mr Badarne, and seeks production of the following documents:

“1. All documents relating to the injury suffered by you in Australia in or about 2007 at a work site operated by Michael Hanna Ayoub or an entity or entities related to him, including but not limited to records of hospital, medical or other treatment received by you at any time, whether in Australia or outside Australia, in connection with such injury.

2. All documents, including but not limited to invoices, statements, receipts and other payment records, relating to charges made for any such treatment by any person, or to chemist, accommodation or travel expense incurred by you in relation to such injury, or to payment of such charges or expenses by any person at any time and whether in Australia or outside Australia.

3. The original of any application for a passport, visa or other official document, whether made in Australia or outside Australia, that bears your signature and is dated before 31 July 2007.

4. If any original document referred to in paragraph 3 cannot be produced, a copy of each such document certified as a true copy by a Notary Public or equivalent official.

5. If any original or copy document referred to in paragraph 3 or 4 is not in English, a certified translation of such document into English by an accredited translator.”

21. The third notice is similarly addressed and seeks production of the following documents:

“1. All documents relating to the injury suffered by you in Australia in or about 2007 at a work site operated by Michael Hanna Ayoub or an entity or entities related to him, including but not limited to records of hospital, medical or other treatment received by you at any time, whether in Australia or outside Australia, in connection with such injury.

2. All documents relating to any claims for compensation or other money made by you to any person (including without limitation Michael Hanna Ayoub and any entity related to him) in relation to the injury referred to in paragraph 1, and any payment of such compensation or money.

3. All documents, including but not limited to invoices, statements, receipts and other payment records, relating to charges made for any such treatment by any person, or to chemist, accommodation or travel expenses incurred by you in relation to such injury, or to payment of any such charges or expenses by any person at any time and whether in Australia or outside Australia.

4. The original of any application for a passport, visa or other official document, whether made in Australia or outside Australia, that bears your signature and is dated before 31 July 2007.

5. If any document referred to in paragraph 4 is not in English, a certified translation of such document into English by an accredited translator.”

22. These notices are directed to a former client of Mr Badarne rather than to Mr Badarne himself. Mr Badarne no longer acts for the client and the client is not, despite Mr Stanizzo’s submissions to the contrary, a party to these proceedings. The notices to produce should be set aside on that basis alone.

23. Mr Ahmad Abu Ria is a party to the deed to which I have earlier referred that Mr Stanizzo challenges as a sham. In accordance with that deed, Mr Abu Ria purports to assign the benefit of his entitlement to a compensation payment arising out of an injury that he is said to have suffered on a building site. Mr Stanizzo says, among other things, that Mr Abu Ria had only been in Australia for a short period before his accident and for a short period thereafter and that this reliably informs or further supports his contention that the deed is a sham.

24. I am unable to see how the dates when Mr Abu Ria came and left Australia could have any legitimate forensic purpose, even having regard to the submissions made by Mr Stanizzo concerning that information. The issue of the authenticity of the deed will not be aided by the travelling status of one of its parties if it cannot otherwise be successfully impugned.

Fourth notice to produce

25. This notice seeks production by Mr Badarne of the following documents:

“All complaints made by you to the Office of the Legal Service Commissioner (OLSC) or to the Law Society of New South Wales in relation to the plaintiff, all documents submitted by you to either of those bodies in connection with such complaints, and all correspondence between you and the OLSC or the Law Society in relation to such complaints.”

26. This notice is not pressed.

Fifth notice to produce

27. This notice seeks production by Mr Badarne of the following documents:

“All correspondence, including emails and records of meetings and telephone calls, between yourself (whether at the firm Donnelly & LBC Lawyers or the firm V F Stanizzo) and any firm of solicitors, including Heard McEwan Legal and Kells Lawyers, in the period 1 January 2005 to 24 August 2009, in regard to any of the following:

(a) Grange Hill Properties Pty Ltd (GHP);

(b) Any of the directors or shareholders of GHP;

(c) Nicholas Theoharidis;

(d) Michael Ayoub;

(e) Goulburn Valley Auction House Pty Ltd (GVAH);

(f) Any of the directors of (sic) shareholders of GVAH;

(g) Any litigation between any of the above persons or companies, including Supreme Court proceedings No. 4500 of 2006.”

28. This notice seeks the production of communications and correspondence over a period of approximately four and a half years between Mr Badarne and any firm of solicitors in relation to six nominated individuals and any litigation between them.

29. Mr Badarne complains that the notices are akin to discovery, are oppressive and are in any event too late in the context of the present proceedings. Mr Badarne has estimated that it would take him approximately 50 hours to examine all of the potentially relevant files in his office in order to be satisfied that he had complied strictly with the notice if required to do so.

30. In my opinion the material sought does not concern any legitimate forensic purpose. The terms and breadth of the notice at this late stage also make it oppressive. It should be set aside.

Sixth notice to produce

31. This notice seeks production by Mr Badarne of the following documents:

“1. All correspondence between you the Office of the Legal Services Commissioner (OLSC), the Law Society in relation to any matter arising from your period working as a solicitor in the office of the plaintiff’s firm.

2. All correspondence between you and the Australian Taxation Office in relation to any alleged income tax or superannuation entitlements arising from your period working as a solicitor in the plaintiff’s firm.

3. Copies of all income tax returns, notices of assessment and any related correspondence relating to yourself in each of the financial years ended 30 June 2006 to 30 June 2010 inclusive.

4. Copies of all applications by you to the Israel Bar Association or any other authority for admission to legal practice in Israel and any supporting material and correspondence relating to such applications.

5. Copies of your application to the Local Court at Sutherland for setting aside of the conviction recorded against you and all affidavits and other evidence and supporting material and all Court documents and correspondence relating thereto.

6. All files and all original or copy documents, including diary or other notes and electronic recordings, relating to your acting on behalf of Vivianna Valvano (also known as Fregnan) in relation to a dispute with the Shellharbour Institute of TAFE, including the electronic recording and any other records of the meeting between yourself, Fregnan and Mr John Boss or other representative of the TAFE on 25 May 2009 and any other conference or attendance by you with any person in the matter on that day. (Paragraphs 91 – 102 of your Evidentiary Statement dated 8 March 2018 refer).”

32. The documents sought by this notice have already been produced in response to the fourth notice to produce. However, on Mr Badarne’s submission, the documents listed in categories 2 to 5 are arguably without any legitimate forensic purpose.

33. I am unable to discern how any of these documents could legitimately inform the proof of any issue that is alive for my determination in these proceedings. As I have noted on several occasions, I understand and accept that Mr Stanizzo wishes to establish that Mr Badarne disliked him and that there are several areas of conflict between them that is evident from Mr Badarne’s employment with Mr Stanizzo and the disputes that they had concerning the receipt and distribution of fees owing to the firm or to one or other of them individually. However, there is, and must necessarily be, a limit to the lengths to which a party to litigation can expect an opponent to go in order that the party might be given access to documents that on almost any reasonable view lie beyond, or at the very best, on the outer limits of, any possible relevance to the issues in the proceedings.

Seventh notice to produce

34. This notice seeks production by Mr Badarne of the following documents:

“1. The complete conveyancing file relating to the purchase by you of the property at ***.

2. All other documents relating to such purchase, including without limitation documents relating to:

(a) Any application by you to any person for finance to pay the purchase monies, stamp duty and any other expenses of purchase, and any approvals and agreements relating to such finance.

(b) Any funds obtained by you from any person to pay such purchase monies, stamp duty or other expenses of purchase.”

35. With respect to the documents sought in the first category, Mr Badarne says that he does not have the conveyancing file as this work was carried out by Mr Stanizzo. With respect to the balance of the documents, Mr Badarne contends that they have no legitimate forensic purpose.

36. The property referred to is the property that was purchased by Mr Badarne with what Mr Stanizzo alleges are fees owing to his legal practice that were illegitimately diverted to his own use by Mr Badarne pursuant to the impugned deed. Mr Stanizzo does not seek to establish that Mr Badarne obtained the funds from legitimate sources, to which issue the documents sought could only possibly be relevant.

Eighth notice to produce

37. This notice seeks production by Mr Badarne of the following documents:

“1. All Records relating to correspondence or other communications between you and Amir Harb or LBC Lawyers from 1 January 2006 until the date of this Notice.

2. All Records of communications between you and Ahmad Abu Ria from March 2005 until the date of this Notice.

3. All Records relating to the obtaining by you of funds to pay purchase money or other expenses to acquire the property at ***.

4. All Records relating to conferences, meetings or other communications between you and Vivianna Valvano (aka Vivianna Fregnan) in the period from 1 April 2009 to 28 February 2014.

5. All records relating to conferences, meetings or other communications with the former wife of the Plaintiff, at any time.

6. All Records relating to conferences, meetings or other correspondence or communications between you and Nabil Elhassan, at any time.

7. All Records relating to conferences, meetings or other correspondence or communications between you and each of the following persons in the period from 1 January 2006 to 28 February 2014:

(a) Michael Ayoub;

(b) Carlo Michael Habib;

(c) Paul Donnelly.

8. All Records relating to conferences, meetings or other communications between you and each of the following persons:

(a) Nicholas Theoharidis;

(b) Ali Mesrati;

(c) Tumay Sismanoglou;

(d) Dilaver Yildirim;

(e) Arthur Tannous;

(f) Nicodemo Mazzone;

(g) Abdulkarim Charmand;

(h) George Badour;

Relating to the matters the subject of the Complaints to the Legal Services Commissioner by the plaintiff against you, to which you replied by letter to the Law Society dated 24 November 2009.”

38. With respect to categories 1 to 7, Mr Badarne contends that the documents sought have no legitimate forensic purpose. He has no documents to produce with respect to category 8.

39. I am unable to detect any legitimate forensic purpose that would support the call for the production of the documents in the first seven categories. These documents on their face appear to be concerned with the legitimacy of the deed that Mr Stanizzo says is a sham, about which I have commented earlier in these reasons.

Conclusion

40. Except to the extent that documents have already been produced, or Mr Badarne does not oppose production, each of the notices to produce issued by Mr Stanizzo should be set aside.

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Decision last updated: 31 May 2019