MEIBURN Pty Ltd v MLC Ltd
[2000] WASC 138
•9 JUNE 2000
MEIBURN PTY LTD & ORS -v- MLC LTD [2000] WASC 138
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 138 | |
| Case No: | CIV:2368/1997 | 17 APRIL 2000 | |
| Coram: | MASTER BREDMEYER | 9/06/00 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| PDF Version |
| Parties: | MEIBURN PTY LTD FELICE ANDRIANI SARETTA ANDRIANI BRETON HOLDINGS PTY LTD SPINA SANTINI MICHELE SANTINI BROOKLYN NOMINEES PTY LTD RADOVAN MESTRIC MLC LTD |
Catchwords: | Discovery of particular document Statements given by plaintiffs to ASC and police discoverable and not privileged |
Legislation: | Australian Securities and Investments Commission Act 1989 (Cth), s 25 Corporations Law, s 1324, s 1065(1) Rules of the Supreme Court, O 26A |
Case References: | Attorney General (NT) v Morris (1986) 161 CLR 475 Carboni & Anor v National Crime Authority & Ors (1994) 126 ALR 79 Complete Technology Pty Ltd v Toshiba Australia Pty Ltd (1994) 124 ALR 493 ESSO Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67 Grant v Downs (1976) 135 CLR 674 La Rosa v The Queen, unreported; CCA SCt of WA; Library No 970733; 12 December 1997 Sommerville & Ors v ASC & Ors (1995) 13 ACLC 467 Beecham Group Ltd v Bristol Myers Co Ltd [1979] 272 Bushtown Holdings Pty Ltd v Conlan [1999] WASC 123 Buttes Bas & Oil Co v Hammer (No 3) [1981] 1 QB 223 Taylor v Batten [1878] 4 QBD 85 Taylor v Commissioner for Railways [1974] Qd R 137 TPC v Ampol Petroleum (Victoria) Pty Ltd (1994) 126 ALR 111 Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd (1980) 44 FLR 149 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
FELICE ANDRIANI
SARETTA ANDRIANI
Second Plaintiff
BRETON HOLDINGS PTY LTD
Third Plaintiff
SPINA SANTINI
Fourth Plaintiff
MICHELE SANTINI
Fifth Plaintiff
BROOKLYN NOMINEES PTY LTD
Sixth Plaintiff
RADOVAN MESTRIC
Seventh Plaintiff
AND
MLC LTD
Defendant
(Page 2)
Catchwords:
Discovery of particular document - Statements given by plaintiffs to ASC and police discoverable and not privileged
Legislation:
Australian Securities and Investments Commission Act 1989 (Cth), s 25
Corporations Law, s 1324, s 1065(1)
Rules of the Supreme Court, O 26A
Result:
Application allowed
Representation:
Counsel:
First Plaintiff : Mr T H Brickhill
Second Plaintiff : Mr T H Brickhill
Third Plaintiff : Mr T H Brickhill
Fourth Plaintiff : Mr T H Brickhill
Fifth Plaintiff : Mr T H Brickhill
Sixth Plaintiff : Mr T H Brickhill
Seventh Plaintiff : Mr T H Brickhill
Defendant : Mr M J Feutrill
Solicitors:
First Plaintiff : Brickhill Banaszak
Second Plaintiff : Brickhill Banaszak
Third Plaintiff : Brickhill Banaszak
Fourth Plaintiff : Brickhill Banaszak
Fifth Plaintiff : Brickhill Banaszak
Sixth Plaintiff : Brickhill Banaszak
Seventh Plaintiff : Brickhill Banaszak
Defendant : Freehill Hollingdale & Page
(Page 3)
Case(s) referred to in judgment(s):
Attorney General (NT) v Morris (1986) 161 CLR 475
Carboni & Anor v National Crime Authority & Ors (1994) 126 ALR 79
Complete Technology Pty Ltd v Toshiba Australia Pty Ltd (1994) 124 ALR 493
ESSO Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67
Grant v Downs (1976) 135 CLR 674
La Rosa v The Queen, unreported; CCA SCt of WA; Library No 970733; 12 December 1997
Sommerville & Ors v ASC & Ors (1995) 13 ACLC 467
Case(s) also cited:
Beecham Group Ltd v Bristol Myers Co Ltd [1979] 272
Bushtown Holdings Pty Ltd v Conlan [1999] WASC 123
Buttes Bas & Oil Co v Hammer (No 3) [1981] 1 QB 223
Taylor v Batten [1878] 4 QBD 85
Taylor v Commissioner for Railways [1974] Qd R 137
TPC v Ampol Petroleum (Victoria) Pty Ltd (1994) 126 ALR 111
Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd (1980) 44 FLR 149
(Page 4)
1 MASTER BREDMEYER: The defendant has applied for further and better discovery from the plaintiffs of the following documents:
"1 Statements or copies of statements given to or taken by the Australian Securities Commission or the Police in or about 1996.
2 For the financial years ending 30 June 1994 to 30 June 1999 inclusive and for the period from 1 July 1999 to present:-
(a) all bank statements and other financial records;
(b) all tax returns and Australian Taxation Office tax assessments;"
3 I will consider first the statements said to have been given by the plaintiff to the ASC and/or the police in or about 1996. Mr Feutrill has filed an affidavit in support in which he attaches a copy of application WAG 3008 of 1995 made in the Federal Court in Perth. That is an application by ASC under s 1324 of the Corporations Law against Noel Andrew Bell, Steven Antonio La Rosa and three companies. The application is 13 pages long and it lists the various investors said to have been swindled by Bell and La Rosa and the amounts of money they invested with those men and whether they were introduced to this investment scheme by Bell or La Rosa. I infer from this detailed application that ASC did an investigation, including getting statements from each investor, setting out how he became involved in this investment, who he spoke with, and the sum of money he invested. I consider it unthinkable that ASC would bring such an action without first investigating it and as part of that obtaining statements from the victims of the scheme. The application lists 24 investors defrauded by this scheme and they include the first, second and third plaintiffs in this action. I consider the ASC would not have launched the Federal Court application without a prior investigation. If it had not investigated the scheme it would have left the individual investors to their own legal remedies.
4 Mr Feutrill's affidavit also attaches a decision of the Court of Criminal Appeal, La Rosa v The Queen, unreported; CCA SCt of WA; Library No 970733; 12 December 1997. La Rosa pleaded guilty in the District Court to 13 counts of contravening s 1065(1) of the Corporations
(Page 5)
- Law - which is the offence of inviting people to subscribe to a prescribed interest without an approved deed (somewhat akin to inviting people to subscribe for shares without a prospectus). He was convicted and sentenced to 4 years' imprisonment. He appealed and on appeal the sentence was reduced. I have searched the indictment upon which he was convicted, as I consider I am entitled to do, and learned from that that the first, second and third plaintiffs were victims of his crimes. La Rosa pleaded guilty in relation to offences against them. I am entitled to take judicial notice of the fact that when a plea of guilty is accepted in the District Court or Supreme Court on a criminal matter, the brief normally includes statements from the prosecution witnesses. I therefore am fairly certain that statements were taken by the police from the victims of those crimes, including the first, second and third plaintiffs.
5 The plaintiffs say that, if the statements taken by ASC and the police do exist, then they are protected from inspection by the defendant by legal professional privilege: Grant v Downs (1976) 135 CLR 674, Attorney General (NT) v Morris (1986) 161 CLR 475, Complete Technology Pty Ltd v Toshiba Australia Pty Ltd (1994) 124 ALR 493, Carboni & Anor v National Crime Authority & Ors (1994) 126 ALR 79 and ESSO Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67. The doctrine is that communications made confidentially between a client and his legal adviser for the purpose of obtaining or giving legal advice or assistance are privileged. The privilege extends to witnesses' statements brought into existence by the client or the solicitor for use in litigation or proposed litigation. The rationale for the rule is that it fosters a relationship of trust and candour between lawyer and client, which is good for the administration of justice. The plaintiffs' statements to the ASC and to the police were, of course, not given to their lawyer. They were not given to the ASC and police for the purposes of getting advice or for use in future legal proceedings brought by the plaintiffs. They were given to those agencies for the purposes of those agencies. I consider that the plaintiffs cannot claim legal professional privilege for these statements.
6 The plaintiffs also say, and I think it is an alternative submission, that the privilege rests with the agencies for whom the documents were prepared. The plaintiffs rely on Sommerville & Ors v ASC & Ors (1995) 13 ACLC 467 (Northrop J) and (1995) 13 ACLC 1527 (FCt of the Federal Court), upholding Northrop J. That case can be distinguished. In that case the application for discovery was against the ASC. In the present case the defendant is not seeking discovery against ASC. If and when it does - and it could seek such discovery against ASC, a non-party, under
(Page 6)
- O 26A of the Rules of the Supreme Court - then let ASC take the privilege objection if it wants to.
7 It was also argued for the plaintiffs that they would be committing an offence under s 25 of the Australian Securities and Investments Commission Act 1989 (Cth) if they disclosed the statements to the defendant. I quote:
"25(1) [Copy of record for person's lawyer] The Commission may give a copy of a written record of the examination, or such a copy together with a copy of any related book, to a person's lawyer if the lawyer satisfies the Commission that the person is carrying on, or is contemplating in good faith, a proceeding in respect of a matter to which the examination related.
25(2) [Offence relating to copies of record] If the Commission gives a copy to a person under subsection (1), the person, or any other person who has possession, custody or control of the copy or a copy of it, shall not, except in connection with preparing, beginning or carrying on, or in the course of, a proceeding:
(a) use the copy or a copy of it; or
(b) publish, or communicate to a person, the copy, a copy of it, or any part of the copy's contents.
Penalty: $1,000 or imprisonment for 3 months, or both.
25(3) [Copy of record to relevant person] The Commission may, subject to such conditions (if any) as it imposes, give to a person a copy of a written record of the examination, or such a copy together with a copy of any related book."
8 I consider that if I order the plaintiffs to produce the statements to the defendant for inspection, they will be absolved from prosecution under s 25(2) because those statements will be revealed "in connection with … carrying on … a proceeding". The purpose of inserting those words in s 25(2) is a recognition of the fact that the need for confidentiality passes once litigation commences. The investigation stage is over and is superseded by the litigation process.
(Page 7)
9 I do not consider that the plaintiffs have raised any proper claim for privilege and I will order the documents to be discovered and made available for inspection.
10 The second kind of documents sought are the plaintiff's bank statements and other financial records and tax returns and ATO assessments for the period 30 June 1994 to the present. These documents are said to be relevant to the plaintiffs' claim for loss and damage. The plaintiff's counsel has argued that the plaintiffs have given comprehensive discovery and that their affidavits of discovery should be treated as final.
11 The first, second and third plaintiffs have filed reasonably detailed affidavits of discovery and include bank statements, cheque stubs etc. They do not include any tax returns or assessments. The first plaintiff borrowed $229,000 from Citibank on 17 June 1994 to invest in La Rosa's scheme. It is claiming the costs of that borrowing as part of its loss and damage. It has produced Citibank statements from 17 June 1994 until 2 January 1997. Was the loan repaid by them? I do not know. If not repaid by then, further bank statements to date should be discovered. At present, because I do not know, I cannot be fairly certain that these statements exist so I decline to make any order in relation to them. If they do exist and loss of interest paid is claimed for that period, then they should be discovered by the first plaintiff voluntarily.
12 It is possible that the first plaintiff claimed the interest paid on this investment as a tax deduction. If so, that is a gain to reduce its claim for loss of interest. I am fairly certain the company has filed tax returns. I will therefore require it to discover its tax returns and assessments from 1 July 1994 until to date. I do not consider it need discover any other financial records.
13 The second plaintiffs did not borrow to make their investment. I do not consider their discovery has been deficient and I decline to order further discovery against them.
14 The third defendant borrowed $71,500 from Westpac on 23 December 1993 to make its investment in La Rosa's scheme. It claims the interest paid on that loan as a loss. It may have claimed a tax deduction for that loss. If so, the tax returns and assessments become relevant. They have not been discovered and I will order them to be discovered for the period 1 July 1993 until to date.
15 The third defendant has discovered Westpac bank statements from 29 December 1993 to mid-1995 for two accounts. Was the loan then
(Page 8)
repaid? I do not know. It may have been repaid, at least in part, as La Rosa repaid $52,988.64 (principal and interest). I am not fairly certain that these later statements exist so I decline to make any order in relation to them. If perchance the loan was not repaid by mid-1995, and this plaintiff is claiming interest paid after that time as a loss, then these bank statements are relevant and need to be discovered and this plaintiff should discover them voluntarily under its continuing obligation to give discovery. There are no other financial records which I consider this plaintiff should discover.
16 I do not consider that the defendant has made out a case for further and better discovery of any other financial records against these plaintiffs.
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