Gogolka and Anor v Queensland Building Services Authority
[2012] QCAT 308
•17 July 2012
| CITATION: | Gogolka and Anor v Queensland Building Services Authority [2012] QCAT 308 |
| PARTIES: | Kevin Tennesse Gogolka James Raptis |
| v | |
| Queensland Building Services Authority |
| APPLICATION NUMBER: | OCRO71-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 13 December 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Paul Favell, Member |
| DELIVERED ON: | 17 July 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | The objections to the Amended Notice to produce are dismissed. |
| CATCHWORDS: | Notice to produce – objections – whether relevant – whether oppressive – whether within jurisdiction |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr J B Sweeney – for the Applicant |
| RESPONDENT: | Mr P Looney (instructed by Robinson Locke) – for the Respondent PD Hay – Counsel for Capital Finance Australia Limited (instructed by Corrs Chambers) |
REASONS FOR DECISION
Kevin Gogolka and James Raptis applied to the Tribunal to review deemed refusal by the Building Services Authority, pursuant to s 56AD(6) of the Queensland Building Services Authority Act 1991 not to approve applications made by them to be categorised as a “Permitted Individual”. Each of them was categorised as an excluded individual pursuant to s 56AC of the Act. The applications made by them were consolidated into application OCR071-10.
Each of the applicants were directors of various corporations to which receivers and managers were appointed. The various corporations were fully owned subsidiaries of the Raptis Group Ltd (“the Group”). The Group acquired development sites and funding was arranged from a variety of lending sources so that the projects could be developed.
One such project was the Southport Central Project. The project comprised of three towers. Tower One had been constructed and the units sold. Tower Two had been constructed. Tower Three was part way through construction. Towers Two and Three were primarily funded by Capital Finance Australia Ltd (“CFAL”).
Raptis Group Ltd entered into external administration and a scheme of arrangement from October 1992 to August 1993. Subsequently, an administrator was appointed to various other corporations with which the applicants were associated.
These events were relevant events about which the applicants applied to be categorised as a Permitted Individual. Those applications were refused because of deficiencies identified by the respondent and it considered section 51AD(8) had not been satisfied.
After a series of directions and orders the applicants served an Amended Notice to produce a document or thing pursuant to section 63 of the Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”) on CFAL. The notice required CFAL to produce various documents or things contained in a schedule attached to the Notice. CFAL objected to the notice. The Tribunal ordered submissions on the objections to be filed and exchanged and a hearing was listed for 13 December 2011.
Part of the contentions advanced on behalf of the applicants is that the global financial crisis caused turbulence in international financial markets and it became difficult to borrow funds for development projects. Borrowing arrangements were put into place with CFAL. The applicants seek to contend that CFAL did not provide working capital as it promised and wrongfully appointed receivers.
The applicants contend that on a proper interpretation of s 56AC of the Act only a lawful appointment of a controller can be a relevant company event. They contend that, to the extent that the respondent has declared each applicant to be an excluded individual each declaration is a nullity and accordingly each applicant is not a permanently excluded individual under s 58 of the Act.
The objections to the amended notice are made on grounds of oppression, irrelevance and lack of jurisdiction.
[10] At the directions hearing I was asked to determine “whether the objections by CFAL in the amended table of objections of 14 November 2011 are valid in whole or in part.”
[11] Soon after the hearing commenced and after written submissions were identified or supplied, Mr Sweeney, appearing for the respondents, said:
“It was pointed out that on the view of the QBSA for my side to agitate a contention that we were never an excluded individual because no valid receivership had ever occurred, further material need to be filed; and for whatever reason, I perhaps wrongly took the view that the document that you ordered be done, the statement of facts and contention, would be sufficient to join issue on that point. Now, Mr Looney has told me this morning that as far as the QBSA’s concerned, that’s not their view about it, but I would not object to my intended filing of a further application for review of what I called the E.I. declaration which was on the 13 September 2008 and will need leave to agitate out of time that issue and I’m also told by Mr Looney that he would not object to that and that they take the view that they should be heard first because it will be much shorter than the PI application and if the EI application is allowed, there will be no need for a PI application. I’ve said that at some extra long length probably but Mr Hay’s position is, I think, until such time as an EI application is filed, then the relevance point will be maintained that is to say, all the documents just aren’t relevant for the jurisdictional ground and Mr Looney supports me on that. We want to argue about that and say that, as a matter of fact, in this case, that’s not right but it’s got that extra dimension that there’s this looming application Mr Hay doesn’t know has happened; it’s happened in the background for Mr Hay; Mr Hay hasn’t brought his mind to: what if, any difference would there be to my submissions if there was an EI application on foot?”
…
“Our contention is that, on a PI application, whether a relevant company [event] had then occurred, is a permissible area of inquiry. I think Mr Looney’s position and Mr Hay’s position is no, it’s not. It’s not absent a leave, an EI application being on foot. We don’t want to fall between two stools on that, we think it’s a good point but if it’s bad, we seek to overcome it by just making an application which as you’ve heard, won’t be opposed, but that’s the point and that’s why it’s an important point.”
[12] On that topic Mr Looney for the respondent said:
“We don’t have an objection to the seeking of leave to file an application and the appropriate extension of time to file an application in relation to the excluded individual point, and we also don’t have an objection to the determination today of the question of the documents that should be produced in respect of each of those applications about which we don’t say anything.”
[13] Mr Hay for CFAL said:
“Well we can’t say anything against my friend’s clients obviously filing whatever applications they see as appropriate. We do object to any dealing with those applications today. My client is entitled to, because my client’s interests are vested in this because they’re seeking disclosure, is entitled to be heard in respect of the applications and I simply, this has been foreshadowed; a draft application for leave has been passed across the Bar table this morning to me notwithstanding the history of this matter and I would need obviously to see the material that they’re proposing to put on and take instructions from my client and have proper time to review our client’s position.”
[14] On the lack of jurisdiction ground, CFAL contends that an application pursuant to s 56AD of the BSA Act is premised “on an acceptance, as a matter of fact, of the applicants being excluded individuals” and if the applicants contend otherwise “there is no basis for them (the applicants) to even have commenced their application under s 256AD.” It contends “there simply can not be any jurisdiction for the Tribunal …to go behind and look at whether someone is an excluded individual or not”.
[15] The objections on the basis of relevance are essentially based on the assumption of an “excluded individual” as it is contended for in the lack of jurisdiction argument.
[16] CFAL also raised a question of whether any challenge to the validity of appointment of a receiver would need to be determined under the Corporations Act 2001 (Cth) in the Supreme Court or the Federal Court. In my view CFAL would have an interest in such a determination.
[17] On the question of relevance CFAL submit that documents in its possession not previously seen by the applicants can not be relevant or probative of anything the applicants should have done.
[18] It has been accepted, applying the decision in Younan v Queensland Building Services Authority (2010) QDC 158 as confirmed by the Court of Appeal [2011] QCA 1, that the steps to be taken under s 56AD(8) required “first the identification of the relevant event; second, the identification of the circumstances that resulted in the happening of a relevant event; third, a consideration whether the relevant individual took all reasonable steps to avoid those circumstances coming into existence; and if satisfied of that, fourth, a decision whether to categorise the individual as a permitted individual.”
[19] In my view, documents which may not have been viewed previously by the applicants may be relevant to the identification of the circumstances that resulted in the happening of the relevant event. If such documents show the circumstances that resulted in the appointment of a receiver, then in my view they are relevant.
[20] That is not to say that documents which only show whether the appointment of a receiver was a valid appointment are relevant documents. However, if they do show the circumstances that resulted in the relevant appointment they are relevant and they are within the jurisdiction of an inquiry to be made under s 56AD(8).
[21] Such documents are relevant even if the applicants did not know of them. If they show a relevant circumstance then that act is relevant in considering whether the relevant individual took all reasonable steps to avoid those circumstances coming into existence.
[22] CFAL asserts that an answer to the notice would be a breach of their confidential information, and invasion of their privacy and a massive imposition on them because of the size of the file.
[23] Section 63 of the QCAT Act provides for the obtaining of a document or thing from third parties. The Tribunal may require a person not a party to the proceeding who has or is likely to have in that person’s possession or control a document or other thing relevant to the proceeding to produce the document or thing to the Tribunal or a party to the proceeding.
[24] A person does not have to comply with an order if there is a valid claim to privilege from disclosure. Such a claim is not made here.
[25] In making an order on the application of a party the Tribunal must consider whether it is appropriate to make an order requesting the party to pay the costs of producing the document or they to which the order relates.
[26] In my view the concerns with respect to costs should, if the objections do not succeed be subject to the applicants paying the reasonable costs of CFAL incurred in producing the documents.
[27] I was referred to the decision of Lee J in Uthmann v Ipswich City Council [1998] 1 Qd R 435 in which he said:
“It is not possible to lay down a procedure or guidelines for all cases as Miss Osborne submitted. Various requirements were outlined in Lebon v. Lake Placid Resort Pty Ltd and in other authorities therein referred to. However, from this case the following general principles have emerged:
(1) The procedure cannot be used if its only purpose is to engage in a purely fishing expedition.
(2) Documents sought must be shown by the issuer of the writ to probably relate to a matter in question in the cause. This “matter” is usually demonstrated by the pleadings and/or particulars but may in some cases be shown in some other way.
(3) The issuer of a writ must demand production only of specific documents which would be the subject of a subpoena duces tecum at the trial, which he can show are probably in the possession or control of the third party and which probably relate to a matter in question in the cause. If this is not done, the issuer of the writ may be at risk as to costs if an application is brought to the Court by either party.
(4) The issuer of the writ must formally give sufficient information in writing to enable the third party to make an informed decision. If this is not done, the issuer of the writ may again be at risk as to costs if an application is brought to the Court.
(5) The third party must independently be satisfied that the documents relate to a matter in question in the cause, before they are produced.
(6) If the third party produces demanded documents which relate to a matter in question in the cause, the third party is probably protected although this should be clarified by amendment.
(7) If the third party is of the view that the documents do not relate to a matter in question in the cause or if there is a doubt in relation to it or if there is any other proper basis for objection to produce the documents whether on the ground of privilege or on a discretionary basis or otherwise, the third party should prudently apply to the Court for an order.
(8) The Court has a discretion whether or not to order production or the extent of it, but if the rules are complied with, an order for production will usually be made having regard to the purpose of the procedure which is to assist the administration of justice by minimising costs and facilitating the disclosure of information which would advance fair determination of the issue as early as possible: O’Sullivan v.Herdmans Ltd [1987] 1 W.L.R. 1047 at 1055–6; Ansett Transport Industries Ltd v. The Commonwealth; Lebon v. Lake Placid Resort Pty Ltd at 28. If production is ordered, the Court may impose conditions and require undertakings to meet the individual circumstances.
(9) If the person who issues the writ is permitted to adduce further evidence at the hearing in order to sustain the order sought, and the third party has no prior notice of it, this may be relevant to the question of costs of the application.
(10) There is no reason why before any application is brought to the Court, there should not be dialogue between the third party and the person who issues the writ for clarification or to state grounds of objection. The person who issues the writ may then satisfy the third party in writing, or might desist if the objections raised are accepted.”
[28] In Xstrata Queensland Ltd v Santos Ltd [2005] QSC 323 McMurdo J said:
“[44] Apart from the impact of the UCPR, the general rule is that the documents the subject of a subpoena must be apparently relevant, and that it need not be demonstrated that the documents would be admissible in the proceeding at the stage when the court is considering whether inspection by the parties should be permitted: National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372; Apache Northwest at 368-379 especially at 376.
[45] The submission for Pelican Point Power Ltd, and adopted by some other applicants, is that the position in Queensland is now different because the UCPR “embody a conscious departure from the test of relevance under the general law”. Both as between parties and in relation to third parties, the UCPR require that only directly relevant documents must be disclosed. A document is directly relevant in this sense only if it tends to prove or disprove an allegation in issue in the proceedings: Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at 282-283. This requirement of direct relevance is said to affect the operation of s 17 of the Commercial Arbitration Act in two ways. It is argued that it limits the power under s 17 to a subpoena which requires the production of what is directly relevant. Alternatively, it is said to inform the exercise of the discretion under the section, so that ordinarily, the court would not issue a subpoena which sought more than directly relevant documents, or would set aside such a subpoena which had issued.
[46] In contrast with the rules for disclosure between parties or by non parties, the rules dealing with subpoenas do not, at least expressly, require that the documents be directly relevant. There is no particular basis for thinking that the difference is through a drafting error. The processes of disclosure and subpoena have many differences. One already mentioned is that disclosure, even by a non party, ordinarily involves no order by or other involvement of the court. To confine the process of disclosure to a more limited category of documents might be thought to be more appropriate where ordinarily the process is pursued without the involvement of the court.
[47] In my view the rules relating to subpoenas, and particularly r 414, should not be limited by implication, such that the court could issue only a subpoena requiring directly relevant documents. Nor should the power under the Commercial Arbitration Act be so limited. To an extent, the policy evident in limiting disclosure to directly relevant documents, might inform the exercise of the court’s discretion in relation to a subpoena. That policy recognises a proliferation of documents unheard of when previous rules were formulated, and the consequent need to confine the process of disclosure to avoid its being an oppressive burden. It does not follow that, in general, a subpoena should be set aside if it requires the production of more than is directly relevant. The documents must be apparently relevant in the sense explained by the authorities. But the relative likelihood of the documents being ultimately admitted in evidence is a factor to be considered in assessing whether the subpoena is oppressive.
[48] Accordingly the subpoenas should not be set aside simply for the reason that they require the production of documents not presently demonstrated to be directly relevant.”
[29] In my view the principles proposed in those two decisions are relevant here.
[30] CFAL in part submitted that the applicants had not shown that they did not have the documents the subject of the nature. Lists of documents have been filed. They disclose the documents the applicants have in their possession or control.
[31] As to the confidential nature of information held by CFAL the applicants say the information is protected by the protection afforded by the Courts.
[32] In Hearne v Street [2008] 235 CLR 125 the High Court dealt with implied undertakings with respect to documents provided to a party. It stated the implied undertaking at paragraph 96:
“Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, [69] documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits.”
[33] In my view the Amended Notice is a valid notice which should be complied with by CFAL. I am satisfied that the documents sought are relevant because they relate to the circumstances that resulted in the happening of the relevant event. That consideration is well in the jurisdiction of the Tribunal in considering an application under section 56AD.
[34] I am satisfied that it is appropriate that the applicants pay the reasonable costs of CFAL in responding to the Amended Notice. The applicants seek to resolve a system in that regard with CFAL. If a satisfactory system is not resolved the applicants and CFAL have leave to seek further orders.
[35] It is not necessary to make any finding concerning the proposed application, concerning the excluded individual status because the parties are likely to agree on the making of such an application and there is no actual application before the Tribunal.
[36] The objections to the Amended Notice are dismissed.
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