Menegazzo v PricewaterhouseCoopers - [2019] QSC 296

SUPREME COURT OF QUEENSLAND

CITATION:

Menegazzo v PricewaterhouseCoopers & Ors [2019] QSC 296

PARTIES:
MARK JOHN MENEGAZZO

(plaintiff)

v
PRICEWATERHOUSECOOPERS (A FIRM)
ABN 52 780 433 757

(first defendant)

BRENDAN PETER MENEGAZZO

(second defendant)

DEBRA LOUISE MENEGAZZO

(third defendant)

DAVID ANGELO MENEGAZZO

(fourth defendant)

MCCULLOUGH ROBERTSON LAWYERS (A FIRM)
ABN 42 721 345 951

(seventh defendant)

JUTLAND PTY LIMITED
ACN 010 813 322

(third party)

FILE NO/S:

BS No 10502 of 2013

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

2 December 2019

DELIVERED AT:

Brisbane

HEARING DATE:

5 March 2019, 22 March 2019, written submissions received on various dates up to 12 April 2019

JUDGE:

Davis J

ORDERS:

1. The plaintiff’s application to appoint Geoffrey Eales, Richard Cameron and James Cudmore as experts pursuant to r 429N(3) of the Uniform Civil Procedure Rules 1999 is dismissed.

2. The plaintiff has leave pursuant to r 429N(2) of the Uniform Civil Procedure Rules 1999 to lead at trial evidence of experts Geoffrey Eales, Richard Cameron and James Cudmore.

3.    Geoffrey Eales is authorised to enter upon and inspect the properties which he valued by his report dated 15 October 2018, but such authorisation to be subject to further directions and conditions.

4.    The question of the directions and conditions upon which Mr Eales is authorised to enter and inspect the properties is adjourned to a date to be fixed.

5.    The parties shall be heard on the question of costs.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PROCEDURAL ASPECTS OF EVIDENCE – EXPERT REPORTS AND EXPERT EVIDENCE – OTHER MATTERS – where the plaintiff and each of the second, third and fourth defendants are siblings – where upon the death of the siblings’ parents, the siblings became directors of the corporate trustees and effectively controlled all of the trusts which had been controlled by their father – where it was agreed in 2007 to restructure the trusts to separate out certain assets and pass them to the plaintiff – where in the course of reaching the agreement, valuations of various assets were prepared by the third party including valuations of cattle stations – where the plaintiff alleges that the second, third and fourth defendants have acquired his interests below value and in breach of trust – where the court appointed experts to value the assets – where the plaintiff wishes to challenge the valuations ‒ where the plaintiff has obtained further valuation evidence ‒ whether the plaintiff’s valuers ought to be appointed as experts by the court ‒ whether leave should be given to the plaintiff to rely upon his experts

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PROCEDURAL ASPECTS OF EVIDENCE – where the plaintiff seeks an order that one of its experts inspect the properties ‒ where that application is opposed on grounds including safety, undue interference with the defendant’s business and risk of contamination of the properties ‒ whether authorisation to inspect should be granted subject…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] QSC 296
Decision Date: 2 December 2019

CaseChat Overview and Summary

The plaintiff, a beneficiary of family trusts, initiated legal proceedings against his siblings, who were also beneficiaries and had become directors of the corporate trustees of the trusts following their father's death. The plaintiff alleged that the defendant siblings had acquired his interests in the trusts below value and in breach of trust. The court had appointed experts to value the assets, but the plaintiff challenged these valuations and sought to rely on his own experts. The plaintiff sought orders to appoint his experts as court experts, to lead their evidence, and for one of them to inspect the properties. The defendants opposed the inspection on safety and business interference grounds.

The legal issues before the court included whether the plaintiff's experts should be appointed as court experts, whether the plaintiff should be allowed to rely on their evidence, and whether the plaintiff's expert should be authorised to inspect the properties, subject to conditions. The court had to balance the plaintiff's right to challenge the valuations with the defendants' concerns about safety, business interference, and potential contamination of the properties.

The court dismissed the plaintiff's application to appoint his experts as court experts but granted leave for him to lead their evidence at trial. The court authorised the plaintiff's expert to inspect the properties but subject to further directions and conditions to address the defendants' concerns. The court adjourned the question of the directions and conditions for the inspection to a later date and directed the parties to be heard on the question of costs.

The court made the following orders: (1) dismissing the plaintiff's application to appoint his experts as court experts; (2) granting the plaintiff leave to lead evidence from his experts; (3) authorising the plaintiff's expert to inspect the properties subject to further directions and conditions; (4) adjourning the question of the directions and conditions for the inspection; and (5) directing the parties to be heard on the question of costs.

Orders

Orders of the court

1. The plaintiff’s application to appoint Geoffrey Eales, Richard Cameron and James Cudmore as experts pursuant to r 429N(3) of the Uniform Civil Procedure Rules 1999 is dismissed.

2. The plaintiff has leave pursuant to r 429N(2) of the Uniform Civil Procedure Rules 1999 to lead at trial evidence of experts Geoffrey Eales, Richard Cameron and James Cudmore.

3. Geoffrey Eales is authorised to enter upon and inspect the properties which he valued by his report dated 15 October 2018, but such authorisation to be subject to further directions and conditions.

4. The question of the directions and conditions upon which Mr Eales is authorised to enter and inspect the properties is adjourned to a date to be fixed.

5. The parties shall be heard on the question of costs.

Background

Background to the litigation

The experts duly delivered reports but the opinions are challenged by the plaintiff who applies for orders under r 429N of the UCPR that:(i)experts from whom he has obtained reports be appointed as experts by the court;[1] alternatively(ii)the plaintiff have leave to rely on the evidence of other experts from whom he has obtained reports;[2] and(iii)one of the experts now proposed by the plaintiff have access to the properties to inspect them for the purposes of him giving evidence.[3] [1] Uniform Civil Procedure Rules 1999 r 429N(3).[2] Uniform Civil Procedure Rules 1999 r 429N(2).[3] Uniform Civil Procedure Rules 1999 r 250.Background The plaintiff and each of the second, third and fourth defendants are siblings. When referring to them collectively, I will call them “the siblings” and when referring to the second, third and fourth defendants collectively, I will call them “the defendant siblings”. Their father (Mr Menegazzo Senior) was a successful grazier but he and the siblings’ mother were both killed in a light plane crash on 2 December 2005. A large and valuable estate was left. Pastoral and other properties controlled by Mr Menegazzo Senior were held through a number of trusts. Some of the trusts had corporate trustees which were in turn controlled by Mr Menegazzo Senior. It is unnecessary to analyse all of those arrangements. Upon the death of Mr Menegazzo Senior and his wife, the siblings became directors of the corporate trustees and together effectively controlled all of the trusts. Each of them were beneficiaries of the trusts. By 2007, disagreement had arisen between the siblings but in November of that year, an agreement was struck to restructure the trusts to separate out certain assets and pass them to the plaintiff. A resolution was passed at a meeting of 7 November 2007, and on 31 December 2007 a deed (the deed) was executed between the siblings, the estate of Mr Menegazzo Senior and the various companies and trusts which held the assets. The deed put the resolution into effect. By the terms of the deed, the plaintiff received benefits being:(i)transfer to him of a pastoral station called “Vanrook Station”;(ii)transfer to him of a herd of cattle grazing on “Vanrook Station”;(iii)transfer to him of a property in Ballina; and(iv)forgiveness of a debt of $18,500.000 owed by him to various of the trusts. By the deed, the plaintiff gave up any interests in, or claim to, the trusts and other entities and the assets held by or through them. Those assets included various cattle stations, the cattle grazing thereon, a feedlot and a meatworks at Grantham in the Lockyer Valley. In reaching the bargain, the plaintiff says that he relied upon valuations of various assets prepared by the third party, and documents referred to in his Amended Statement of Claim[4] as “valuation spreadsheets”. The valuation spreadsheets were prepared by the first defendant. [4] Filed on 22 June 2016; which I will call “the Statement of Claim”.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

It is appropriate to order inspections pursuant to r 250 of the UCPR, but reserve the question of what directions ought to be made in relation to the conduct of those inspections. The directions will accommodate the legitimate concerns raised by Mr Kelly QC on behalf of the defendant siblings and will be designed to minimise the impact of the inspections upon the conduct of the defendant siblings’ business. The only practical way to travel around the properties will be by helicopter. I have in mind that Mr Eales and a small number of assistants (if any are required) attend upon the properties on a specified day or days, and before the inspection, they would provide a flight plan, details of the sites where they would land and how long they would be on the ground, etcetera. Conclusions and orders It is appropriate to order that the plaintiff have leave at the trial to rely upon the evidence of Messrs Eales, Cameron and Cudmore. The defendants have not made application to lead evidence from their own experts. However, the structure of the trial has now changed from one where there are court appointed experts, to one where the plaintiff is leading a body of expert evidence which, no doubt, will have to be met by the defendants with their own expert evidence. Leave being given to the defendants under r 429N is virtually inevitable. I assume that a sensible approach will be taken by the plaintiff to any application brought by the defendants. I will make an order for inspection under r 250 but subject to directions being given as to the conduct of that inspection. I will set a date to hear that argument. I will hear the parties on the question of costs. I make the following orders:1.The plaintiff’s application to appoint Geoffrey Eales, Richard Cameron and James Cudmore as experts pursuant to r 429N(3) of the Uniform Civil Procedure Rules 1999 is dismissed.2.The plaintiff has leave pursuant to r 429N(2) of the Uniform Civil Procedure Rules 1999 to lead at trial evidence of experts Geoffrey Eales, Richard Cameron and James Cudmore.3.Geoffrey Eales is authorised to enter upon and inspect the properties which he valued by his report dated 15 October 2018, but such authorisation to be subject to further directions and conditions.4.The question of the directions and conditions upon which Mr Eales is authorised to enter and inspect the properties is adjourned to a date to be fixed.5.The parties shall be heard on the question of costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Menegazzo v PricewaterhouseCoopers & Ors [2019] QSC 296
PARTIES:	MARK JOHN MENEGAZZO (plaintiff) v PRICEWATERHOUSECOOPERS (A FIRM) ABN 52 780 433 757 (first defendant) BRENDAN PETER MENEGAZZO (second defendant) DEBRA LOUISE MENEGAZZO (third defendant) DAVID ANGELO MENEGAZZO (fourth defendant) MCCULLOUGH ROBERTSON LAWYERS (A FIRM) ABN 42 721 345 951 (seventh defendant) JUTLAND PTY LIMITED ACN 010 813 322 (third party)
FILE NO/S:	BS No 10502 of 2013
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	2 December 2019
DELIVERED AT:	Brisbane
HEARING DATE:	5 March 2019, 22 March 2019, written submissions received on various dates up to 12 April 2019
JUDGE:	Davis J
ORDERS:	*1. The plaintiff’s application to appoint Geoffrey Eales, Richard Cameron and James Cudmore as experts pursuant to r 429N(3) of the Uniform Civil Procedure Rules* 1999 is dismissed. 2. The plaintiff has leave pursuant to r 429N(2) of the Uniform Civil Procedure Rules 1999 to lead at trial evidence of experts Geoffrey Eales, Richard Cameron and James Cudmore. 3. Geoffrey Eales is authorised to enter upon and inspect the properties which he valued by his report dated 15 October 2018, but such authorisation to be subject to further directions and conditions. 4. The question of the directions and conditions upon which Mr Eales is authorised to enter and inspect the properties is adjourned to a date to be fixed. 5. The parties shall be heard on the question of costs.**
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PROCEDURAL ASPECTS OF EVIDENCE – EXPERT REPORTS AND EXPERT EVIDENCE – OTHER MATTERS – where the plaintiff and each of the second, third and fourth defendants are siblings – where upon the death of the siblings’ parents, the siblings became directors of the corporate trustees and effectively controlled all of the trusts which had been controlled by their father – where it was agreed in 2007 to restructure the trusts to separate out certain assets and pass them to the plaintiff – where in the course of reaching the agreement, valuations of various assets were prepared by the third party including valuations of cattle stations – where the plaintiff alleges that the second, third and fourth defendants have acquired his interests below value and in breach of trust – where the court appointed experts to value the assets – where the plaintiff wishes to challenge the valuations ‒ where the plaintiff has obtained further valuation evidence ‒ whether the plaintiff’s valuers ought to be appointed as experts by the court ‒ whether leave should be given to the plaintiff to rely upon his experts PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PROCEDURAL ASPECTS OF EVIDENCE – where the plaintiff seeks an order that one of its experts inspect the properties ‒ where that application is opposed on grounds including safety, undue interference with the defendant’s business and risk of contamination of the properties ‒ whether authorisation to inspect should be granted subject…