Magarditch, Gerier Agop v Australia & New Zealand Banking Group Ltd

[1998] FCA 245

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1065  of  1997

BETWEEN:

GERIER AGOP MAGARDITCH
First Applicant

JAKE SOURIAN
Second Applicant

MAGIC AUSTRALIA PTY LIMITED
Third Applicant

AND:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
(ACN 005 357 522)
First Respondent

IAN LAWRENCE STRUTHERS "THE APPOINTED LIQUIDATOR FOR MAGIC AUSTRALIA PTY LIMITED"
Second Respondent

JUDGE:	EMMETT J
DATE:	6 MARCH 1998
PLACE:	SYDNEY

THE COURT ORDERS:

1. That the subpoena addressed to Malcolm McLelland, the subpoena addressed to John P. Hamilton, the subpoena addressed to Ian Knight and the subpoena addressed to William Windeyer each be set aside.

1. That the applicants in these proceedings pay the costs of each of those parties of his notice of motion.

1. That each of the notices of motion be otherwise dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1065  of  1997

BETWEEN:

GERIER AGOP MAGARDITCH
First Applicant

JAKE SOURIAN
Second Applicant

MAGIC AUSTRALIA PTY LIMITED
Third Applicant

AND:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
(ACN 005 357 522)
First Respondent

IAN LAWRENCE STRUTHERS "THE APPOINTED LIQUIDATOR FOR MAGIC AUSTRALIA PTY LIMITED"
Second Respondent

JUDGE:	EMMETT J
DATE:	6 MARCH 1998
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR:   In these proceedings allegations are made against Australia New Zealand Banking Group Limited (“the Bank”) and Ian Lawrence Struthers, the liquidator of a company called Magic Australia Pty Limited (“the Company”).

The applicants are the Company and two former directors of the Company.  The general tenor of the allegations made against the Bank is that the Bank owed a duty of care to the Company and the directors and that it acted in breach of that duty of care in maintaining a caveat and in maintaining that the Company was indebted to it.  It is also alleged that the Bank acted in breach of some duty to the applicants in failing to give credit for a payment made to the Bank and which should have been credited to the account of the Company.

The claim against the liquidator is that he did not faithfully perform his duties as liquidator of the Company in that he failed to get in assets comprising causes of action which it is said the Company had and in selling assets of the Company for a price that was regarded as below what could reasonably have been obtained.

In connection with the proceedings the applicants have caused subpoenas to be issued to Malcolm McLelland, the former Chief Judge in Equity of the Supreme Court of New South Wales, William Windeyer, a former Master and present Judge of the Supreme Court of New South Wales, John P. Hamilton, who previously acted as counsel for some of the applicants and is presently a Judge of the Supreme Court of New South Wales, and Ian Knight who is presently the Crown Solicitor of New South Wales.

Each of them has moved to have the subpoenas addressed to him set aside on the ground that each of them is an abuse of the process of the Court.  In support of those applications an affidavit has been filed in which each of them is said to have told the deponent that he knows of no relevant evidence which he might give in relation to the proceedings.  Each also says that he has received no approach from the applicants as to his ability to give relevant evidence in respect of the proceedings.

Section 16(1) of the Evidence Act 1995 (Cth) (“the Act”) provides that a person who is a judge is not competent to give evidence in a proceeding in which he is a judge. Section 16(2) of the Act provides that a person who is or was a Judge in an Australian proceeding is not compellable to give evidence about that proceeding unless the court gives leave. Mr McLelland wishes to rely on that provision insofar as it was available to him.

I have invited Mr Sourian, one of the applicants, who appeared in person, to indicate which paragraphs of the amended statement of claim make allegations in respect of which any of the subpoenaed parties could give relevant evidence.  He took me specifically to paragraphs 5, 11(c) and (d) and 23(d).

Paragraph 5 is an allegation that the Bank alleged that it was a creditor of the Company and as such purported to participate in the winding up of the Company.  Paragraph 11(c) and (d) is an allegation that the Bank was in breach of its duty to the applicants in that it failed to heed or respond to written advice from the Company's solicitor that a sum of $131,812 had not been credited to the debts of the Company and that it failed to credit the accounts of the Company until 17 months after a cheque representing the proceeds of the sale of Mr Sourian's home unit had been given to the Bank and after orders for the winding up of the Company had been made.  Paragraph 23(d) is an allegation that the liquidator was in breach of his duty in that the Bank and the liquidator conspired for the liquidator to mislead the Supreme Court to obtain approval for the liquidator to withdraw from common law proceedings to which the Company and the Bank were parties.

Mr Sourian has been unable to persuade me that any of the four subpoenaed parties can give any admissible evidence as to the matters which are the subject of the proceedings in the Federal Court. The general thrust of his complaint is that he and his family have been hardly done by the Bank and the liquidator. Whether there is any substance in the allegations I cannot know. It is clear that Mr Sourian has a deep sense of grievance in relation to the matters. However, there is no evidence which Mr McLelland or Windeyer J could give in relation to the performance by them of their duties as judicial officers of the Supreme Court. I do not consider that there is any evidence which Windeyer J or Mr McLelland could give in relation to proceedings before them, quite apart from the provision of section 16 of the Act.

Windeyer J, as Master, made orders in relation to the Company and McLelland J also heard proceedings to which the Company was a party.  The involvement of Mr Knight as Crown Solicitor appears to be even more remote.  There was an intimation given to me that Mr Knight, as the solicitor on the record for the State of New South Wales, may have some knowledge of proceedings in which Mr Sourian was prosecuted for alleged fraudulent conduct in relation to insurance claims.  However, there was no suggestion that Mr Knight had any personal involvement in any of the matters.

The first applicant is Mr Sourian’s father.  Mr Hamilton appeared for both of Mr Sourian's parents in relation to the proceedings involving the caveat and the winding up of the Company.  Mr Sourian has been unable to indicate to me any evidence which would be admissible and which Hamilton J, as he now is, would be able to give.  The matters to which reference was made in the course of argument were matters which were much more likely to be within the knowledge of Mr Sourian and his family or matters which would be more properly proved by documents such as accounts, certificates of title and the like.

In all of the circumstances I consider that it is inappropriate that the four individuals should be subpoenaed to give evidence in these proceedings and on the material before me it appears to me that the issue of the subpoenas has been quite misconceived.  Accordingly, I order that the subpoenas be set aside and that the applicants pay the costs of the motion that they be set aside.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett

Associate:

Dated:            6 March 1998

Counsel for the Respondent:	G.A. Laughton
Solicitor for the Respondent:	State Crown Solicitor
Date of Hearing:	6 March 1998
Date of Judgment:	6 March 1998