Gupta & Anor v Singh & Anor (Ruling as to discovery)
[2023] VCC 1982
•3 November 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
DEFAMATION LIST
Case No. CI-21-03860
| Yogesh Gupta | Plaintiff |
| and | |
| Tax Planners Pty Ltd (ACN 124 732 805 | Second Plaintiff |
| v | |
| Pal Singh | Defendant |
| and | |
| AMEX AUSTRALIA PTY LTD (ACN 118 166 000) | Second Defendant |
---
JUDGE: | HER HONOUR JUDGE CLAYTON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 October 2023 | |
DATE OF RULING: | 3 November 2023 | |
CASE MAY BE CITED AS: | Gupta & Anor v Singh & Anor (Ruling as to discovery) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 1982 | |
RULING
---
Subject:CIVIL PROCEDURE – DEFAMATION
Catchwords: Discovery – application for specific discovery – whether documents are relevant to issues in dispute – fishing expedition
Legislation Cited: County Court Civil Procedure Rules 2018
Cases Cited:Liesfield v SPI Electricity Pty Ltd (Ruling No 1) (2013) 43 VR 493
Volunteer Fire Brigades Victoria v CFA [2016] VSC 573
Ruling: The plaintiffs’ discovery application granted in part.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | J Levine | Matrix Legal Pty Ltd |
| For the Defendant | The first defendant appeared in person |
HER HONOUR:
1The defendant has applied for specific discovery pursuant to r29.08 of the County Court Civil Procedure Rules 2018 (‘the Rules’).
Background
2The first plaintiff alleges the defendant has defamed him by publishing emails in which the following imputations are conveyed:
(a) The first plaintiff has committed tax fraud against the first defendant;
(b) The first plaintiff is not fit to be a chartered accountant by having acted unethically by having committed tax fraud;
(c) The first plaintiff has stolen client funds and is therefore a thief;
(d) The first plaintiff has committed fraud against his clients.
3The second plaintiff alleges that the first defendant has made misleading and deceptive representations, or representations likely to mislead or deceive in contravention of s18 of the Australian Consumer Law and which have caused it loss and damage. The second plaintiff alleges the false and misleading representations are:
(a) The first and second plaintiffs have engaged in multi-million dollar fraud;
(b) The first and second plaintiffs pleaded guilty to multi-million dollar fraud;
(c) The first and second plaintiffs stole money from their clients;
(d) The first plaintiff used money he stole from clients to purchase properties;
(e) The first and second plaintiffs committed tax fraud against the first defendant.
4The plaintiffs also allege a breach of confidence by the first defendant and second defendant which has resulted in loss and damage to the second plaintiff. The plaintiffs claim entitlement to an order for equitable compensation for the profits made by the first and second defendants.
5The first defendant pleads defences of truth and justification pursuant to s25 of the Defamation Act 2005 in relation to the imputations and false and misleading imputations said to be conveyed by the publications.
6In the plaintiffs’ reply, they deny the allegation of substantial truth in the defence and deny committing any act of tax fraud against the defendants or any of the persons identified in the particulars pleaded. The plaintiffs deny any claim of misrepresentation or fraudulent activity associated with the preparation of tax returns for the identified clients.
7The plaintiffs plead “The Plaintiffs are prepared to provide evidence refuting all allegations and asserting his (sic) professional integrity at trial”.[1]
[1]Plaintiff’s reply at paragraph 7
Documents sought
8By his application, Mr Singh seeks the following documents:
(a) Evidence of the first plaintiff’s PhD qualifications;
(b) Evidence of the first plaintiff’s employment with Monash University;
(c) Letter dated 27 July 2015 from Iris Cheng to the first plaintiff;
(d) Case details and documents for the first plaintiff and second plaintiff relating to Administrative Appeals Tribunal applications against the Tax Practitioner Board;
(e) The audit report from the Australian Taxation Office (ATO) or the Tax Practitioner Board cited by the first plaintiff in paragraph 9, 10 and 11 of his affidavit of 24 May 2023;
(f) The second plaintiff’s trust account transaction details from 2008 to 2014 and mandatory audit reports for those years;
(g) The second plaintiff’s integrated client account statement, ATO income tax statements, bank statements, GST returns, income tax returns, profit and loss statements and balance sheets for the financial years 2009 to 2017;
(h) Winjets Pty Ltd integrated client account statement, ATO income tax statement, bank statements, profit and loss statements and balance sheets for financial years 2009 to 2014;
(i) LoanPlanners Pty Ltd, Taxplanners Group Pty Ltd, Walls & Roof Developers Pty Ltd and South Yarras Landholding Pty Ltd GST returns, income tax returns, ATO integrated client account statements, ATO income tax statements, bank statements, profit and loss statements and balance sheets for financial years 2009 to 2014;
(j) G&M Superfund GST returns, bank account statements, profit and loss balance sheets and mandatory audit reports for the financial years 2008 to 2015;
(k) Yogesh Gupta Super Fund bank account statements, GST returns, profit and loss balance sheets and mandatory audit reports for the financial years 2008 – 2015; and
(l) Australian Realty Investment Solution Pty Ltd GST returns, income tax, ATO integrated client account statement, ATO income tax statement, bank statements, profit and loss statements and balance sheets for financial years 2009 to 2014.
Principles
9Discovery is an integral component of trial preparation and is part of the fact finding exercise in getting a case to trial. It is not concerned with admissibility.[2]
[2]Volunteer Fire Brigades Victoria v CFA [2016] VSC 573 at paragraph [40]
10Discovery must be made of all documents relevant to the issues in dispute. A document that goes to a real and not peripheral issue in the trial is relevant and ought be discovered, subject to arguments about proportionality.[3]
[3](Ibid) at paragraph [41]
11The Civil Procedure Act 2010 and the Rules mandate that any order concerning discovery should be directed to finding the most efficient, effective and economical management of the discovery exercise.[4]
[4]Liesfield v SPI Electricity Pty Ltd (Ruling No 1) (2013) 43 VR 493
12The “days of searching for the smoking gun are gone”.[5]
[5]Volunteer Fire Brigades Victoria v CFA (supra) at paragraph [36]
13At the hearing of the application, counsel for the plaintiff submitted that in relation to items (a) and (b), discovery had already been made and there were no further documents.
Documents (c), (d), (e), (g), (h), (i)
14Item (c) is a discoverable document and the plaintiff agreed to provide it.
15It is not apparent what relevance the documents in item (d) have to any issue in dispute. Mr Singh alleges that Mr Gupta “must have” lied in order to obtain tax accountant registration, however there is no evidence of this and this request is a fishing expedition.
16The documents sought at item (e) are relevant to an issue in dispute, that is Mr Gupta’s good name and character. Mr Gupta says in his affidavit that he and all his associated companies were comprehensively investigated and the “ATO did not find a single dollar misappropriation in the same”.[6] Audit reports from the ATO may be relevant to whether Mr Singh can make out his substantial truth defence. Mr Singh is entitled to those discovery of those documents.
[6]Affidavit of Yogesh Gupta at paragraph [10]
17In relation to documents sought at item (g), the second plaintiff claims it has suffered loss and damage as a result of false and misleading representations made by Mr Singh. Mr Singh is entitled to documents that show the income, profit and loss of the company prior to the allegedly false and misleading representations and after those representations. The second plaintiff must discover tax returns, profit and loss statements and balance sheets for the years 2015 to 2022.
18In relation to item (h), Mr Singh pleads that this is a company that is 100% owned by Mr Gupta. The company owns two properties in Little Collins Street. Mr Singh asserts that Winjets Pty Ltd is a shell company which was created to buy the properties and that discovery of the documents he seeks will “validate the defence of truth”.[7] No evidence is relied upon to found this submission. There is no evidence before the Court as to the source of the funds used to buy the properties Winjets owns. Mr Singh’s submission appears to be that the Court can infer that the money used to purchase the properties was stolen from Mr Gupta’s clients. This appears to be an attempt to find a “smoking gun” on the basis of nothing more than conjecture. It is a fishing expedition and will not be allowed.
[7]Affidavit of Pal Singh at paragraph [12(c)]
19Similarly in relation to the items sought at (i), Mr Singh’s submission is that these are companies owned by the first or second plaintiff which hold assets. Mr Singh submits that South Yarra Landholding Pty Ltd previously included a major shareholder called Arctic International Pty Ltd which was registered in Mauritius. He submits Mauritius is a tax haven and this “fact” “points out that the company is/was involved in tax avoidance/evasion which is a criminal offence”.[8] There is no evidence to support this submission and is pure speculation. Mr Singh’s submission seems to be little more than identifying a number of companies associated with the plaintiffs and asking the Court to assume that their assets were purchased with stolen funds. It is not apparent how any of the documents sought are relevant or would substantiate the defence pleaded. This amounts to nothing more than a fishing expedition.
[8]Affidavit of Pal Singh at paragraph [13(c)]
Documents (f)
20In relation to item (f), the defendant says this goes to the very heart of his defence of truth and justification. The second plaintiff operates a trust account pursuant to strict rules of compliance. One of those rules is that client money must be held on trust and cannot be transferred without authorisation of the client.
21Mr Singh relies on an excel spreadsheet in his possession which shows transactions into and out of the second plaintiff’s trust account. Mr Singh says this spreadsheet shows amounts stolen by the first plaintiff and amounts to theft of $3.9 million between 2008 and 2013. Mr Singh says this spreadsheet establishes this theft because money was transferred from the trust account into bank accounts in Mr Gupta’s own name or in the names of entities associated with him. In his affidavit he identifies particular transactions in relation to Suresh Tripathy/ Geo Sun Pty Ltd, Nauman Saeed, Rita Devikishan, Arun Veer Singh Datta, Aparna Pandey and Di Yuxia Zhang.
22Mr Singh says the transfers breached accounting standards in relation to dealing with clients’ money and defrauded the ATO of tax revenue.
23Mr Singh pleads that:
(a) In 2007 the ATO paid into the trust account of the second plaintiff an amount of money on his behalf that was not returned to him by either the first or second plaintiff;
(b) In 2008 the ATO remitted a sum of money to the first plaintiff which was paid into the second plaintiff’s trust account. This amount of money was either payable to the second defendant or to the ATO but was not paid to the second defendant or the ATO;
(c) In 2008 the first plaintiff prepared a GST return for the second defendant and advised the first defendant of his tax liability. The second defendant deposited a sum for the tax liability into the ATO account. The first plaintiff then lodged a GST return for the second defendant which notified a GST liability of a substantially lower amount and the ATO refunded the difference in the amount paid by the second defendant and the amount notified by the first plaintiff into the second plaintiff’s trust account. This amount was owed to the ATO but was not paid;
(d) In 2008 the first plaintiff prepared the tax return for the second defendant and advised the first defendant of the second defendant’s tax liability. The first defendant paid the tax liability directly to the ATO. The first plaintiff then lodged the tax return which notified of a lesser tax liability. The ATO refunded an amount owing to the second defendant into the second plaintiff’s trust account. The first defendant alleges the sum was fraudulently obtained by the first plaintiff from the ATO. Mr Singh makes similar allegations in relation to a number of other years;
(e) When Mr Singh discovered the frauds were occurring Mr Gupta returned monies acquired to his clients who confronted him. Mr Singh alleges Mr Gupta returned $24,477.63 and $10,057.63 in 2013;
(f) Mr Gupta was found to have acted dishonestly and without integrity by the Tax Practitioner’s Board in relation to informing Shavita Kotak that she had a tax liability that was required to be paid when she did not have any, lodging an amended tax return without authorisation for Arun Datta, lodging tax returns without authority for Amex Australia Pty Ltd, and lodging tax returns without authority for Nauman Saeed.
(g) The plaintiffs have stolen money from Nauman Saeed, Rita Devikishan, Suresh Tripathi, Geosun Pty Ltd, Shavita Kotak, Arun Veer Singh Datta, Aparna Pandey, Yuxia Zhang;
(h) The plaintiffs have stolen other money from other clients, many of whom are unaware that tax fraud has been committed;
(i) Mr Gupta has used the money he stole from clients to purchase properties. Mr Singh particularises these allegations by pleading that Mr Gupta has a direct or indirect ownership interest in a number of named companies and other entities, and that these assets, properties and businesses were acquired between 2007 and 2013 when Mr Gupta had a modest annual income, averaging $35,087 per year.
24Mr Singh says the transactions from the trust accounts will demonstrate his truth defence, as there were funds transferred illegally and without authorisation.
25Mr Singh has pleaded unauthorised trust account transactions in relation to his account, Amex Australia and eight individual clients.
26Whether such transactions occurred and were fraudulent is a relevant issue in dispute. He is entitled to discovery of trust account documents and the mandatory audit reports for transactions relating to his own funds, the funds of Amex Australia and Nauman Saeed, Rita Devikishan, Suresh Tripathi, Geosun Pty Ltd, Shavita Kotak, Arun Veer Singh Datta, Aparna Pandey, Yuxia Zhang for 2008 to 2014.
27At this stage it is not apparent to me how details of trust accounts relating to other clients are discoverable documents. It is for Mr Singh to establish his defence, not for Mr Gupta to establish that he did not steal money or did not make unauthorised or fraudulent trust account transactions. Subject to the documents produced, it may be open to Mr Singh to make a further application demonstrating that additional trust account documents are relevant.
Documents (j), (k) and (l)
28Mr Singh submits that establishing that the funds allegedly fraudulently transferred from the trust account were transferred to Mr Gupta’s own super funds will establish that the sums were stolen.
29Mr Singh says the payments into these super funds could not have come from Mr Gupta or Tax Planner’s income given the tax returns. For example in an eight year period Mr Gupta made superannuation contributions to his own fund in the amount of $702,705 while earning a total income during that period of $280,693.
30However this does not establish that the funds in the super accounts were stolen from clients.
31Mr Singh also submits that Mr Gupta transferred $11,000 from the second plaintiff’s trust account to Australian Realty Investment Solutions Pty Ltd, a company he alleges is a company partially owned by the first plaintiff via his shell company, Tax Planners. Australian Realty Investment Solutions was deregistered in February 2015.
32It is similarly unclear how obtaining the documents in item (l) would show that there were funds stolen from clients.
33Mr Singh says Mr Gupta swore statutory declarations in 2013 attesting to his assets and total net worth which were false. He submits that Mr Gupta’s actual net worth at that time was significantly higher because he had funded the purchase of properties from money stolen from the Tax Planners’ trust account.
34It is not apparent from the material before the Court how the documents Mr Singh seeks will prove that properties were purchased with stolen funds. It appears Mr Singh already has land title searches and ASIC company searches relating to a number of entities owned by the plaintiffs and he can put that evidence to the plaintiffs at trial in relation to any credit issues he considers arise.
35Mr Singh is not entitled to documents in categories (j), (k) and (l).
36However I would be prepared to revisit this ruling if, on the basis of the documents disclosed pursuant to my orders, there is persuasive evidence that other documents are relevant to the issues in dispute and the defences Mr Singh pleads.
37For the avoidance of doubt, the evidence must be more than mere assertions, presumptions and speculation by Mr Singh.
Orders
38For the reasons set out above I will make orders that make discovery of the following by 1 December 2023:
1. Letter dated 27 July 2015 from Iris Cheng to the first plaintiff
2. Audit Reports of the first and second plaintiff from the Australian Taxation Office or the Tax Practitioner Board cited by the first plaintiff in paragraph 9, 10 and 11 of his affidavit of 24 May 2023.
3. The second plaintiff’s tax returns, profit and loss statements and balance sheets for the years 2015 to 2022.
4. The second plaintiff’s trust account transaction details and mandatory audit reports from 2008 to 2014 for:
a.First defendant;
b.Second defendant;
c.Nauman Saeed;
d.Rita Devikishan;
e.Suresh Tripathi;
f.Geosun Pty Ltd;
g.Shavita Kotak;
h.Arun Veer Singh Datta;
i.Aparna Pandey; and
j.Yuxia Zhang.
0
1
0