Pandolfo v Finadri
[2018] VSC 211
•3 May 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2017 01985
| ANNA MARIA PANDOLFO (in her capacity as Administratrix of the estate of Adrian Paul Fiore Finadri) | Plaintiff |
| v | |
| WALTER FINADRI AND OTHERS (according to the schedule attached) | Defendants |
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JUDGE: | DERHAM AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 14 September 2017, 19 September 2017 and 15 March 2018 |
DATE OF JUDGMENT: | 3 May 2018 |
CASE MAY BE CITED AS: | Pandolfo v Finadri & Ors |
MEDIUM NEUTRAL CITATION: | [2018] VSC 211 First Revision: 20 June 2018 |
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PRACTICE AND PROCEDURE – Preliminary discovery – Whether reasonable grounds to believe that plaintiff may have right to obtain relief against defendants – Whether sufficient information to enable plaintiff to decide whether to commence proceeding – Preliminary discovery ordered – Supreme Court (General Civil Procedure) Rules 2015, r 32.05.
EVIDENCE – Admissibility of hearsay evidence in interlocutory applications – Supreme Court (General Civil Procedure) Rules2015, rr 32.05, 43.03; Evidence Act2008, ss 60 and 75.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms R G Morison and Mr C R Brown | R B Legal Pty Ltd |
| For the First to Eighth Defendants | Mr C R Northrop | Ella Gorenstein |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
Affidavits............................................................................................................................................. 2
Background facts................................................................................................................................ 2
Discovery sought................................................................................................................................ 3
Majority of documents obtained................................................................................................ 5
Applicable Law................................................................................................................................... 6
Discovery not now pressed............................................................................................................ 10
Rhoden Investments................................................................................................................... 10
The Rye Property........................................................................................................................ 10
Aquaflex....................................................................................................................................... 11
The informal will.............................................................................................................................. 11
Employment and Superannuation............................................................................................... 15
Submissions and consideration.................................................................................................... 17
Employment benefits................................................................................................................. 17
The first, second and fourth questions........................................................................... 17
The third question – plaintiff’s submissions................................................................. 18
The third question – Finadri defendants submissions................................................ 21
Consideration – the third question................................................................................. 23
Salary Sacrifice to Superannuation........................................................................................... 25
The first question – plaintiff’ submissions.................................................................... 26
First question – Finadri defendant’s submissions........................................................ 27
Consideration – the first question................................................................................... 28
Conclusion......................................................................................................................................... 29
SCHEDULE......................................................................................................................................... 1
SCHEDULE OF PARTIES................................................................................................................ 3
HIS HONOUR:
Introduction
Adrian Paul Fiore Finadri died intestate on 27 August 2016 (‘Adrian’ or the ‘deceased’). The plaintiff, his widow, was granted Letters of Administration on 9 March 2017. By originating motion filed on 25 May 2017 she sought documents from the first to eighth defendants (‘Finadri defendants’) in order to determine the interests of the deceased in various companies and trusts and what property is in the estate of the deceased.
The application was made in reliance upon ss 13, 14, 37 and 44 of the Administration and Probate Act 1958 (Vic), order 54 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’), and s 247A of the Corporations Act 2001 (Cth) (‘the Act’). By a proposed Amended Originating Motion first advanced in May 2017, but not formally filed until 15 March 2018, the basis of the relief was expanded to include application under r 32.05 of the Rules.
The trial of the originating motion came on before me pursuant to a referral from Justice McMillan on 14 September 2017. The trial did not complete because counsel for the Finadri defendants objected to a change in the direction of the proceeding and needed time to respond. The change in the direction of the proceeding was to introduce claims pursuant to r 32.05 of the Rules and to rely upon an informal will of the deceased.
The further hearing was then scheduled for 19 September 2017. On that day the parties had commenced discussions to resolve the application. Orders were made adjourning the trial, initially to 21 November 2017, and later to 15 March 2018.[1] The orders and directions made provided for the deponent of an affidavit sought to be relied on by the plaintiff, Dr Monk, to be available for cross-examination. He had made an affidavit about witnessing Adrian’s informal will. The Finadri defendants objected to the admission of the informal will into evidence.
[1]Order of Derham AsJ made 20 November 2017.
The discussions between the parties, and the affidavits filed on behalf of the defendants, reduced the scope of the application considerably, as I shall relate.
Affidavits
The plaintiff relied on three affidavits made by her on 25 May 2017 (‘First Pandolfo affidavit’), 7 August 2017 (‘Second Pandolfo affidavit’) and 17 January 2018 (‘Third Pandolfo affidavit’), an affidavit made by the witness to the informal will, Andrew John Monk sworn 18 September 2017 (‘Monk affidavit’) and an affidavit of her solicitor regarding receipt of the informal will, Peter Don Pryles made 21 March 2018 (‘Pryles affidavit’).
The defendants relied upon three affidavits of their solicitor Con Kiatos sworn 15 June 2017 (‘First Kiatos affidavit’), 7 July 2017 (‘Second Kiatos affidavit’) and 11 November 2017 (‘Third Kiatos affidavit’), and an affidavit of Marco Finadri sworn 27 February 2018 (‘Finadri affidavit’).
Background facts
Since Adrian died, the plaintiff and her lawyer have been attempting to determine the full extent of the assets and liabilities of his estate. Between November 2016 and May 2017, the plaintiff’s solicitor engaged in various correspondence with Adrian’s family or lawyers acting for them. Some information was provided but the plaintiff required substantially more in order to determine the assets of the estate and to decide whether or not to commence proceedings in the Court.
Adrian worked in the family business which was made up of a group of various companies and trusts. The main trading business operated a window supply and installation business – Finadri Windows. The main operators of the family group were Adrian, his brother Walter, and their father Marco. Adrian was previously married but separated in 2012 and the divorce was finalised in November 2015. He had one child of that marriage, a daughter named Angelina, aged 9.
Discovery sought
The documents sought in the amended application are:
(a) that the first defendant (‘Walter’) provide all the documents sought from the other defendants. For obvious reasons, this category was not pressed by the plaintiff and I will say no more about it;
(b) that the second and third defendants (‘Marco’ and ‘Maria’) provide copies of documents evidencing any trust in relation to the property located at 7 Edgar Street, Rye, Victoria (‘the Rye Property’) and documents executed by the deceased in relation to the Rye Property. This matter was adequately addressed by affidavits filed by or on behalf of the Finadri defendants, as I will relate;
(c) that the fourth defendant (‘Finadri Windows’) provide copies of the following documents:
(i) documents relating to the employment of the deceased in the business and stating the benefits and entitlements that the deceased was entitled to receive, specifically payroll records relating to the deceased for the period from July 2011 to August 2016 recording wages paid, accrued entitlements and superannuation benefits;
(ii) documents evidencing all unpaid employee entitlements that the deceased had accrued at the time of his death;
(iii) documents evidencing all payments made to or on behalf of the deceased in relation to superannuation between July 2011 and August 2016;
(iv)documents evidencing the source of the cash float held by Finadri Windows including any ledgers kept in relation to the cash float;[2]
[2]This matter was not pursued further in the application.
(v) documents evidencing distributions and other entitlements either paid or unpaid to the deceased for the period from July 2011 to August 2016;[3]
[3]This matter was not pursued further in the application.
(d) that the sixth defendant (‘Aquaflex’) provide copies of the following documents:
(i) documents evidencing distributions and other entitlement either paid or unpaid to the deceased for the period from July 2011 to August 2016;
(ii) documents evidencing the asset position of the Finadri Investment Trust as at August 2016, including but not limited to financial accounts for that trust, tax returns and general ledgers;
(iii) documents evidencing the purpose and/or basis of interest payments made by Aquaflex to the deceased in the period 1 July 2009 to 30 June 2013;
(iv) documents evidencing any loan agreement between Aquaflex and the deceased or related entity of the deceased in relation to payment of approximately $300,000.00 in 2015;
This aspect of the application was not pursued further having regard to the material provided in the course of the proceeding;
(e) that the seventh defendant (‘Rhoden Investments’) provide copies of the following documents:
(i) tax returns for the period from July 2011 to August 2016, other than for the financial year ended 30 June 2015;
(ii) financial statements for the period from July 2011 to August 2016, other than for the financial year ended 30 June 2015;
(iii) bank statements for the period from July 2011 to August 2016;
(iv) documents listed in the letter from the plaintiff’s solicitor dated 9 February 2017;
This aspect of the application was not pursued further having regard to the material provided in the course of the proceeding.
Majority of documents obtained
In the Originating Motion and affidavit in support, the plaintiff disclosed the nature of the relief she would seek on the basis of the insufficient information available to her at the time.[4] The plaintiff set out a list of documents that would enable her to ascertain whether the deceased or the estate had a right to the stated relief in correspondence as well as in this proceeding.[5]
[4]First Pandolfo affidavit [28], [32], [38], [43], [52], [60], [64].
[5]First Pandolfo affidavit [65]-[67], exhibit AMP-2.
In consequence of bringing this proceeding, some documents have been provided to the plaintiff. There was correspondence before the proceeding was commenced between the plaintiff’s solicitors and the several firms representing the Finadri defendants and few documents were provided until these proceedings were issued.[6] In respect of some of the categories of documents, the plaintiff is now in a position to know that she does have rights against various entities and those proceedings will be brought in due course. That is in respect of Rhoden Investments, Aquaflex and the Rye property. The plaintiff now only presses documents relating to the deceased’s employment entitlements.
[6]First Pandolfo affidavit, exhibit AMP-2.
The Finadri defendants disputed that documents provided by them were the reason for the plaintiff not pressing various parts of her application. There has not been full disclosure of the material relevant to, or argument as to, this aspect of the matter. Nevertheless, it is desirable to give some account of the matters now not pressed as they, together with other material to be advanced, will be relevant to the costs of the application. I will mention some of these matters after addressing the law applicable to preliminary discovery.
Applicable Law
Notwithstanding the various bases upon which the application was originally made, as a result of documents provided in the lead up to the trial, and after its adjournment, the remaining documents were sought pursuant to the preliminary discovery power in r 32.05 of the Rules. I will therefore only address the law applicable under that rule.
A Court may order preliminary discovery from prospective defendants to an applicant where the three criteria in r 32.05 of the Rules are met:
(a) there is reasonable cause to believe the applicant has or may have the right to obtain relief in the Court against the named respondent;
(b) after making all reasonable enquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding to obtain that relief; and
(c) there is reasonable cause to believe that the respondent has or is likely to have had in their possession any document relating to the question whether the applicant has the right to obtain the relief, and inspection of the document by the applicant would assist the applicant to make the decision.
The primary object of r 32.05 is to advance the administration of justice, by enabling a prospective plaintiff to make an informed decision based on proper materials about whether to issue proceedings.[7]
[7]Plzen Pty Ltd v P&O Wharf Management Pty Ltd [2007] VSC 318 [17(b)] (Habersberger J) (‘Plzen v Wharf Management’); United Energy Ltd v Energy Risk Management Pty Ltd [1998] VSC 133 [30], [31], [35]-[37] (Gillard J) (‘United Energy’).
In Schmidt v Won,[8] Ormiston JA, with whom Charles and Batt JA agreed, explained the purpose of and the court’s approach to the rule (citations omitted):
The rule, first introduced in 1986, should be construed benevolently because its intention was both to assist claimants without sufficient, precise information to launch an action and to prevent the bringing of speculative suits. Applications, however, must not be based upon “mere hunches” or such flimsy foundations as will not satisfy the requirement that “reasonable cause” should be shown for the necessary belief. That is not to say, however, that some form of “fishing” enquiry is not justified under the rule; indeed it is the very purpose of the rule to permit an enquiry of this kind, if the required conditions are made out.
[8][1998] 3 VR 435, 445.
The rule must be given the fullest scope its language will reasonably allow.[9]
[9]Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728, 733 (Burchett J); Beston Parks Management Pty Ltd v Sexton [2008] VSC 392 [52] (Hollingworth J) (‘Beston Parks’).
An applicant does not have to prove that there will be a real benefit in making the order, but simply that there may be some benefit. The benefit may be the preparation of an appropriate pleading and the avoidance of substantial amendments following discovery. Alternatively, the avoidance of unnecessary litigation.[10]
[10]Beston Parks [2008] VSC 392 [53]; see also Australian Football League v Stadium Operations Ltd [2009] VSC 264 [3] (Warren CJ) (‘AFL v SOL’).
The principles relevant to the first criterion are as follows:
(a) the applicant is not required to show it that has a prima facie case that it has a right to relief;[11]
[11]Plzen v Wharf Management [2007] VSC 318 [17(e)]
(b) it is also not necessary to show precisely what cause of action the applicant may have; such a requirement would defeat the object of the rule;[12]
[12]Schmidt v Won [1998] 3 VR 435, 465; Beston Parks [2008] VSC 392 [53]; United Energy [1998] VSC 133 [32].
(c) rather, it merely needs be shown that the facts are such that it may reasonably be believed that the applicant may have a right to obtain relief;[13]
(d) the test for determining whether the applicant has ‘reasonable cause to believe’ is an objective test;[14]
(e) the word “may” indicates that the applicant’s belief does not have to amount to a firm view that there is a right to relief.[15]
[13]Schmidt v Won [1998] 3 VR 435, 465; Beston Parks [2008] VSC 392 [53].
[14]Plzen v Wharf Management [2007] VSC 318 [17(c)].
[15]Beston Parks [2008] VSC 392 [53].
The second criterion is governed by the following principles:
(a) the requirement is primarily concerned with whether, as an objective fact, an applicant has sufficient information to determine whether to commence proceedings.[16] The fact that an applicant for preliminary discovery already has enough evidence to establish a prima facie case against a proposed defendant does not mean that the applicant has sufficient information to enable it to decide whether to commence a proceeding.[17] An applicant in that position may nevertheless ‘need information to know whether the cost and risk of litigation is worthwhile.’[18] For example, an applicant with sufficient information to plead a prima facie case may prudently wish to obtain preliminary discovery about ‘what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent’s breach and the likely quantum of any damages award’.[19]
[16]Beston Parks [2008] VSC 392 [55].
[17]B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(2)].
[18]Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435, 443; B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(2)].
[19]St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147, 154 [26(f)] (citations omitted); B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(2)].
(b) it is for the court to determine whether an applicant has sufficient information available to it; the applicant’s own assertion that it does not is neither determinative nor strictly necessary;[20]
[20]Beston Parks [2008] VSC 392 [81].
(c) accordingly, an application cannot succeed if the applicant has sufficient information (objectively assessed) but is unable to determine whether to commence proceedings due to subjective factors, for example, an overly cautious nature;[21]
[21]Beston Parks [2008] VSC 392 [55].
(d) courts have, however, approved litigants taking a cautious, conservative or prudent approach by applying for preliminary discovery under the rule.[22] This approach is consistent with the policy underlying the rule.[23] It is also consistent with the policy underlying the Civil Procedure Act 2010 (Vic) (‘CPA’) generally, and the ‘proper basis certification’ requirements in s 42 of the CPA in particular.[24]
(e) if there is evidence that an applicant has in fact decided to commence proceedings, the application must fail.[25] In determining whether an applicant has in fact already decided to commence a proceeding, irrespective of the outcome of the application, the Court should not give too much weight to posturing in correspondence prior to the making of the application, particularly correspondence alleging the existence of a strong case but nevertheless seeking preliminary discovery by letter prior to making a formal application to the Court;[26]
(f) what constitutes ‘reasonable inquiries’ is a question of fact, to be considered in all the circumstances of the particular case.[27]
[22]AFL v SOL [2009] VSC 264 [59]-[61]; United Energy [1998] VSC 133 [103].
[23]AFL v SOL [2009] VSC 264 [61]; B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(3)].
[24]B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(3)].
[25]Beston Parks [2008] VSC 392 [56].
[26]AFL v SOL [2009] VSC 264 [59]–[62]; B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(4)].
[27]Hatfield v TCN Channel Nine Pty Ltd (2010) 77 NSWLR 506, 528 [86]; B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(5)].
For the purpose of the third criteria, ‘possession’ means ‘possession, custody or power’.[28] Little more need be said about the third criteria, which sets out express requirements, the satisfaction of which will turn on the particular facts.
[28]Rule 32.01 of the Rules.
Where each element of the rule is satisfied, the Court will ordinarily exercise its discretion in favour of the applicant.[29]
[29]AFL v SOL [2009] VSC 264 [76].
Discovery not now pressed
Rhoden Investments
On 14 June 2017, after the commencement of this proceeding, the Finadri Defendants acknowledged that the plaintiff has the right to exercise any rights the deceased had as a member of Rhoden Investments under the Act, notwithstanding the previous failure to provide documents and information sought pursuant to s 247A of the Act.[30]
[30]First Kiatos affidavit, exhibit CK-3. Letter from Kiatos & Co to RB Legal Pty Ltd dated 14 June 2017. See also, Defendants’ Supplementary Outline of Argument filed 18 September 2017.
Mr Kiatos confirmed that the accountants for the Finadri defendants provided the plaintiff with the financial records for Rhoden Investments Pty Ltd as well as the loan accounts pertaining to the company.[31] The provision of these documents to the plaintiff has given her sufficient information to decide to commence a proceeding in Court pursuant to the Act in respect of the deceased’s shareholding in that company.[32]
[31]Third Kiatos affidavit.
[32]Plaintiff’s Supplementary Submissions filed 13 March 2018 [14].
The Rye Property
Adrian and his two siblings owned an interest in the Rye Property. Adrian’s interest was claimed to be 20 per cent. Marco and Maria arranged the sale of that property in 2014. The sale settled in September 2014 and the proceeds of sale, after costs and adjustments, was approximately $438,000.00.[33] Adrian did not receive any of the proceeds of the sale of the Rye Property and members of the Finadri family have stated to the plaintiff that Adrian and his siblings held the Rye Property on trust for Marco and Maria and that Adrian had authorised release of his share of the proceeds of the sale of the Rye Property to his parents.
[33]First Pandolfo affidavit [33]–[34], exhibit ANP–12.
In the Second Kiatos affidavit, Mr Kiatos deposed on information and belief that one of the documents provided to him by the solicitors acting for the Finadri interests in the sale was an authority signed by Walter, Adrian and their sister Denise pursuant to which they authorised the solicitors ‘to pay our share of the balance of the sale proceeds … to Marco and Marina Finadri equally…’.[34]
[34]Second Kiatos affidavit [21], exhibit CK-9. The First Pandolfo affidavit confirms that Marina Finadri is Maria [23].
Marco Finadri gave evidence that he and his wife, Maria, were the joint proprietors of three of a total of six equal shares of the Rye Property. Their three children, one of which was the deceased, were registered as proprietors of a one sixth interest each. They did not contribute to the purchase price however.[35] He deposed that there were no documents which evidence any trusts and he did not instruct his accountant or his solicitors to establish a trust with respect to the Rye Property.[36] A copy of the file relating to the sale of the Rye Property was provided to the plaintiff’s solicitors.[37] In relation to the sale of the Rye Property, there was a family arrangement that all funds received from its sale would be paid to Marco and Maria because none of the children contributed to the purchase of it. The deceased agreed to this.[38] This statement is in conflict with the deceased’s statement in the informal will.[39]
[35]Finadri affidavit [3].
[36]Finadri affidavit [5].
[37]Finadri affidavit [6].
[38]Finadri affidavit [7].
[39]Monk affidavit, exhibit AJM-1. See also, First Pandolfo affidavit, exhibit AMP-4.
Aquaflex
The plaintiff has obtained sufficient documents and information as a result of filing this proceeding to commence proceedings against Aquaflex in respect of the loan owed to the deceased.[40]
[40]Further documents are still sought, however: see the Third Pandolfo affidavit, [4]–[7].
The informal will
The plaintiff gave evidence that about one year before he died she assisted Adrian in preparing a will. In her first affidavit she stated:
I am unsure whether the will was ever finalised or executed by the Deceased and I have been unable to locate a copy of any executed will. Accordingly, I have proceeded on the basis that there is no will. However, I believe that the draft will clearly indicated the Deceased’s assets at that time and his intentions. Now produced and shown to be and marked ‘ANP–4’ is a copy of the draft will.[41]
[41]First Pandolfo affidavit [15].
The informal will of the deceased was, according to Dr Andrew Monk, signed by the deceased on 11 September 2015 in Dr Monk’s presence.[42] When the application first came before the Court it was not one ostensibly made under r 32.05 of the Rules. It was the trial of the originating motion as originally formulated. That meant it was not an interlocutory application, as an application under r 32.05 undoubtedly is. That led to the parties proceeding as if the informal will, containing hearsay as it clearly does, had to be proved under an exception to the hearsay rule in s 59 of the Evidence Act 2008 (Vic) (‘Evidence Act’), the prime candidate being s 63. This led to the Finadri defendants being given leave, before any amendment of the Originating Motion to include an application under r 32.05, to cross-examine Dr Monk and to challenge the admissibility of the informal will. Regardless of the fact that the application had become, almost at the last moment, solely based on r 32.05 and therefore an interlocutory one to which s 75 of the Evidence Act applied, the cross-examination proceeded.
[42]Monk affidavit [5]–[7].
Dr Monk was cross-examined at some length about the circumstances surrounding the signing of the will by the deceased and its production by Dr Monk to the plaintiff and by the plaintiff to her solicitors. The plaintiff was also cross-examined. There were suggestions to her of recent invention, forgery and perjury. There are certainly inconsistencies in the evidence of the plaintiff regarding the informal will, but I am in no doubt, notwithstanding the inconsistencies, that in this interlocutory application the evidence of Dr Monk should be accepted as to the signing by Adrian of the will in his presence on 11 September 2015. That is because:
(a) he is a medical practitioner with no personal interest in the subject matter of the proceeding or in the estate of the deceased;
(b) his evidence was unshaken in cross-examination and he seemed to me to be giving evidence honestly and forthrightly;
(c) the inconsistencies are in the evidence of the plaintiff, not in the evidence of Dr Monk;
(d) the solicitor for the plaintiff requested Walter in November 2016 to give access to the premises of Finadri Windows in order to search for a will made by Adrian in September 2015. That is consistent with the copy of the informal will coming to the attention of the plaintiff around that time;
(e) the request to search for the will is also consistent with the evidence in an affidavit sworn by the plaintiff’s solicitor pursuant to leave given on 15 March 2018. That evidence is an email from the plaintiff to the solicitor attaching a scanned copy of the informal will dated 24 October 2016. The email stated:
Dr Andrew Monk has returned from holidays, and this evening he gave me the attached document which was in his file. The attached is a signed and witnessed copy of Adrian’s last will by Andrew Monk.
Again I reiterate I do not have the original will, I believe that Adrian left the original document in his office at Finadri Windows Pty Ltd or in his car.
Please proceed with the Administration orders.
In my view, the cross-examination really only affects the weight to be given to the references in the informal will to what Adrian believed his assets were in September 2015. That is because the copy of the informal will sets out a summary of what the deceased believed were his assets, what he was owed in unpaid and underpaid wages and superannuation entitlements and his belief that he had rights to relief against each of the Finadri defendants. That summary was dictated or related by the deceased to the plaintiff who typed the document. The text of the relevant part of the informal will is set out in the schedule to these reasons.
The informal will is relevant to the plaintiff’s application as a foundation for her belief that she has or may have the right to obtain relief in the Court against the Finadri defendants, in particular Finadri Windows. The plaintiff relied on s 75 of the Evidence Act as providing an exception to the rule against hearsay in this case. Section 75 provides:
In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.
Section 75 reflects a common law exception that has existed for some time. The purpose of the provision is to facilitate the conduct of interlocutory proceedings in circumstances where it is often difficult to adduce evidence in direct and admissible form. For that reason, evidence on information and belief is accepted.[43]
[43]Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 949.
Rule 43.03 of the Rules is to similar effect. That rule provides:
(1)Except where otherwise provided by or under these Rules, an affidavit shall be confined to facts which the deponent is able to state of the deponent’s own knowledge.
(2)On an interlocutory application an affidavit may contain a statement of fact based on information and belief if the grounds are set out.
By virtue of s 9 (particularly s 9(2)(c)) of the Evidence Act, s 75 does not affect the operation of the Rules.[44]
[44]J. D. Heydon, LexisNexis, Cross on Evidence ( 1 May 2018)[35595]; see Director of Public Prosecutions (ACT) v Le (1998) 86 FCR 33, 46.
The question whether an application for preliminary discovery is interlocutory in nature has been considered in a number of matters, both in Victoria and elsewhere. Both FAI Home Security Pty Ltd v Price[45] and Liu v The Age Company[46] contain an extensive discussion of the authorities in this respect. In Victoria, the relevant authority is that of the Full Court of the Supreme Court of Victoria in The Herald and Weekly Times Ltd v The Guide Dog Owners’ and Friends’ Association.[47]
[45][1999] VSC 274 (Byrne J).
[46][2010] NSWSC 1176 (McCallum J).
[47][1990] VR 451, 455 (O’Bryan J), 461 (Marks J). Murphy J agreed generally with the decisions of both O’Bryan J and Marks J.
In order for the evidence to be admissible in an interlocutory proceeding under s 75 of the Evidence Act, or under r 43.03 of the Rules, the plaintiff must also adduce evidence of the ‘source’ of the representation or ‘grounds’ of the information and belief. This was not the subject of any contention at the hearing of the application. It was obvious from the evidence that the source of the statements in the informal will was Adrian, that he had dictated the terms of the will to the plaintiff and she typed it on her computer. Adrian took it to Dr Monk before whom he executed it. It is plainly admissible both as to the truth of its contents (a hearsay purpose) and as to the fact that it was made (a non-hearsay purpose). Its admissibility as to the fact that it was made has another consequence: the representations in the informal will are admissible for both hearsay and non-hearsay purposes.[48]
[48]Evidence Act s 60.
Employment and Superannuation
I now turn to the matters pressed in the application. The plaintiff seeks relief in respect of the following categories of documents:[49]
[49]Plaintiff’s Supplementary Outline of Submissions dated 5 April 2018 [19].
(a) documents relating to the employment of the deceased in the business that state any benefits and entitlements to which the deceased was entitled, specifically payroll records relating to the deceased for the period July 2011 to August 2016 recording wages paid, accrued entitlements and superannuation benefits;
(b) documents evidencing all payments made to or on behalf of the deceased in relation to superannuation between July 2011 and August 2016; and
(c) documents evidencing distributions and other entitlements either paid or unpaid to the deceased for the period July 2011 to August 2016.
The directors of Finadri Windows are Marco and Walter. The deceased was a director until 1 August 2013. The shareholders are Marco and Maria.
The factual bases advanced in support of the application for these documents to be discovered, in summary, are as follows:
(a) between 1988 and 2016, Adrian was employed by Finadri Windows in the role of Manager/Supervisor. In the four years up to his death, he was paid $30,000.00. The plaintiff states her belief that this was less than the industry rates for this role based on Fair Work Australia Wage Rates. She exhibited copies of his PAYG summaries for the previous four years.[50]
[50]First Pandolfo affidavit [24], exhibit ANP–10; Second Pandolfo affidavit [19].
(b) in correspondence leading up to the making of the application, the plaintiff exchanged emails with Marie Mosca, the Personal Assistant/Office Manager of Finadri Windows, in which Marie confirmed that as at April 2016 Finadri Windows owed Adrian $41,083.00 in unpaid entitlements and that this amount had not been paid before Adrian died.[51] This is inconsistent with the report from the Finadri family accountant, Acorn Consulting Group, produced as an exhibit to the Second Kiatos affidavit (‘Acorn Report’) which details the unpaid entitlements as at the date of death of Adrian in the sum of $6,554.72;[52]
(c) superannuation contributions have not been paid for several years, including an amount that the deceased arranged as a salary sacrifice in the amount of $50,000.00 annually.[53] The plaintiff states her belief that Finadri Windows had not paid any superannuation benefits for 5 years before Adrian’s death. The 2015, 2016 and 2017 income tax returns of the Adrian Finadri & Family Superannuation Fund show no employer contributions were received.[54] On the other hand, the Acorn Report states unpaid superannuation contributions in the amount of $5,795.00;
(d) the plaintiff’s solicitor has, since February 2017, made numerous requests of the Finadri defendants for information relating to the entitlements of the deceased, but the Acorn Report provided in the Second Kiatos affidavit is the first information that has been provided;[55]
[51]First Pandolfo affidavit [25]; exhibit AMP-11
[52]Second Kiatos affidavit [10], exhibit CK-4.
[53]First Pandolfo affidavit [26].
[54]Third Pandolfo affidavit [8]-[9], exhibit AMP-29. The Adrian Finadri & Family Superannuation Fund is a self-managed superannuation fund (SMSF) pursuant to s 17A of the Superannuation Industry (Supervision) Act 1993 (Cth).
[55]Second Pandolfo affidavit [23].
Submissions and consideration
Each of the requirements described in paragraphs (a) to (c) of r 32.05 of the Rules must be made out by the plaintiff in order to establish the basis for an order for preliminary discovery. That is, the following four questions must be answered in the plaintiff’s favour in order for the application to be granted:
(1) Does the plaintiff have reasonable cause to believe that she may have a right to relief in the Court from Finadri Windows? (‘the first question’)
(2) Has the plaintiff made all reasonable enquiries? (‘the second question’)
(3) Does the plaintiff have sufficient information to enable her to decide whether to commence proceedings? (‘the third question’)
(4) Is it reasonable for the plaintiff to believe that Finadri Windows has or has had or is likely to have had possession of the documents sought? (’the fourth question’)
There is no dispute that by s 29 of the Administration and Probate Act, ‘subject to the provisions of this section’, all causes of action subsisting against or vested in the deceased survive against or (as the case may be) for the benefit of his estate. There are no exceptions in that provision relevant to the current application.
Employment benefits[56]
[56]I will use this expression to refer to all employment benefits other than the salary sacrifice claim to superannuation.
The first, second and fourth questions
There was no dispute that the first two questions are answered favourably to the plaintiff in relation to employment entitlements, other than the salary sacrifice claim to superannuation. Indeed the Finadri defendant’s in correspondence after the commencement of the proceeding acknowledge that employee entitlements are owed by Finadri Windows to the deceased estate in respect of annual leave, long service leave and superannuation.[57]
[57]Second Kiatos affidavit, exhibit CK-5.
I also consider that, in relation to employment benefits:
(a) the plaintiff has made all reasonable enquiries to enable her to decide whether to commence proceedings. This follows from the correspondence that preceded the commencement of this proceeding;[58]
(b) it is reasonable for the plaintiff to believe that Finadri Windows has or has had or is likely to have had possession of the employment related documents sought. After all, it was the deceased’s employer and it should have kept proper records relating to his employment, his annual leave, long service leave and superannuation.
[58]First Pandolfo affidavit, exhibit AMP-2.
The outcome of the application will therefore be determined on a consideration of whether, under the terms of r 32.05(b) of the Rules, the plaintiff has established that she does not have sufficient information to enable her to decide whether or not to commence a proceeding in the Court.
The third question – plaintiff’s submissions
The plaintiff submitted that what is not known is whether there is more owed than is acknowledged by Finadri Windows. In the Acorn Report it is stated that Adrian’s remuneration for 2016 was $30,000.00. The report goes on to state that this is consistent with the payment summaries issued and also his income tax return filed with the Australian Taxation Office. The report goes on:
From 1 July 2016 onwards, Adrian Finadri had instructed Marie Mosca (Bookkeeper) to process his remuneration in a form of Drawings, not Wages. Please note that Adrian is a beneficiary of a trust and entitled to receive Drawings from Finadri Family Trust. However, please be advised that Employee Entitlements do not apply to Drawings. Hence, Superannuation Guarantee and other leave entitlements do not apply.
Then, under the heading ‘Annual Leave Entitlements’, the report states that based ‘on our correspondence with Marie Mosca, Adrian’s accrued annual leave entitlement is 98.48 hours’. Similarly, in relation to long service leave, the report states that based ‘on our correspondence with Marie Mosca, Adrian’s long service leave is 8.9 weeks’.
The report then goes on to apply the $30,000.00 annual remuneration to calculate the gross annual leave entitlement payout, his long service leave entitlements and his Superannuation Guarantee payment (the latter for the 2015 and 2016 financial years) at the rate of 9.5%. The evidence advanced by the plaintiff is that in the four years up to his death, the deceased was paid $30,000.00 per annum.[59] She produced the email exchange with Marie Mosca to show what was said by Finadri Windows to be owing.[60]
[59]First Pandolfo affidavit [24], exhibit AMP–10. The exhibits in fact reveal remuneration of less than that figure for earlier years.
[60]First Pandolfo affidavit [25], exhibit AMP–11.
The plaintiff submitted, and the Finadri defendants did not dispute, that the deceased, as an employee of Finadri Windows was entitled to long service leave pursuant to the Long Service Leave Act 1992 (Vic) (‘LSLA’). On the information available to the plaintiff, the deceased was employed by Finadri Windows from 1988 to the time of his death. The LSLA provides that an employee is entitled to long service leave after 10 years of continuous employment with an employer.[61] The LSLA provides that ‘employee’ includes a former employee for the purposes of bringing a claim pursuant to s 160 of the LSLA, which must be issued within 6 years after the employee’s entitlement to the money arises.[62] A claim may be made by a legal personal representative of a deceased employee and any restrictions contained within s 29 of the Administration and Probate Act 1958 do not apply.[63]
[61]LSLA s 52A.
[62]LSLA s 160(3).
[63]LSLA s 160(7).
The plaintiff submitted that it is not known how the sums referred to in the Acorn Report are made up and calculated by reference to the correspondence with Marie Mosca. So, for example, the Acorn Report refers to a calculation of long service leave ‘based on our correspondence with Marie Mosca’.[64] It is not known what correspondence between Marie Mosca of Finadri Windows and Acorn Consulting Group forms the basis of the calculations put in the Acorn Report. Similarly, the calculation of annual leave entitlements is based on correspondence with Marie Mosca, which has not been revealed. In relation to the email from Marie Mosca,[65] it is also not known how the sum said to be owed to the deceased as set out in the spread sheet attached to that email ($41,083.00) is to be reconciled with what the Acorn Report states is owing.
[64]Second Kiatos affidavit, exhibit CK-4.
[65]First Pandolfo affidavit, exhibit AMP-11.
The plaintiff also submitted that without understanding the quantum of the claim for unpaid wages and entitlements, and on what basis the deceased may have had an entitlement, the plaintiff is not in a position to assess whether or not there is a proper basis to bring any proceeding. This brings into play the requirement of the CPA, including ss 18, 24 and 42. In this regard, the plaintiff submitted that the authorities on applications for preliminary discovery under r 32.05 of the Rules that preceded the introduction of the CPA must be treated with caution having regard to the requirements of the CPA.[66]
[66]Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 [51]-[57].
Section 18 of the CPA provides, so far as relevant, that a person to whom the overarching obligations apply (that includes the plaintiff and her legal representatives in respect of any proceeding to be commenced[67]) must not make any claim or make a response to any claim in a civil proceeding that does not, on the factual and legal material available to the person at the time of making the claim or responding to the claim, as the case requires, have a proper basis.
[67]CPA s 10.
Section 24 provides, so far as relevant, that a person to whom the overarching obligations apply must use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate to the complexity or importance of the issues in dispute and the amount in dispute.
Section 42 requires a legal practitioner acting for or on behalf of a party to the proceeding to file a proper basis certification which complies with s 42 on the filing of a party's first substantive document in a civil proceeding and on other occasions. Sub-section 42(1A) requires, in the case of a civil proceeding which involves allegations of fact, that the legal practitioner making a proper basis certification must certify that on the factual and legal material available each allegation of fact in the document has a proper basis. Subsection 42(3) provides, amongst other things, that for the purposes of s 42, a determination by a legal practitioner as to whether any allegation of fact or any claim has a proper basis, on the factual and legal material available, must be based on a reasonable belief as to the truth of the allegation.
The third question – Finadri defendants submissions
The Finadri defendants submitted that the plaintiff has enough information to decide whether or not to commence a proceeding. The rule is designed to assist a prospective plaintiff who has a firm basis for thinking that a wrong has been committed but who lacks the hard evidence without which an undertaking as serious as litigation ought not to be commenced.[68] The rule is not directed to knowing whether the case is a strong one or a weak one, whether it is incidentally supported or what the full range of other material is. It is directed to knowing whether the plaintiff has sufficient information to enable her to decide whether to commence a proceeding.[69] The existence of the claims are established and known on the plaintiff’s material that has been filed. What the plaintiff seeks to obtain in this case is material that incidentally supports or provides information about the full range of material relating to unpaid employment benefits.
[68]National Formalwear Group Pty Ltd v Heldana Pty Ltd (Unreported, Supreme Court of Victoria, Harper J, 6 March 1998) [2] .
[69]Gibson v Australia and New Zealand Banking Group Ltd (Unreported, Supreme Court of NSW, Gobbo J, 30 August 1991, 4).
The plaintiff is not entitled to know, before commencing a proceeding, all of the documents that might be discovered when that proceeding is commenced or what the final reconciliation of all of the accounts will be, once the proceeding has commenced. The rule does not provide a means by which an applicant will be enabled to have available to it every document which would assist it in deciding whether to litigate. If that were the intention, r 32.05 (a) and (c) would stand alone and the additional condition set out in paragraph (b) would not be necessary.[70]
[70]Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 1500 [41] proposition 9.
Further, the description of the documents which are sought is so wide it is difficult to understand what is sought.
The Finadri defendants pointed to the fact that the deceased signed and lodged taxation returns each year stating what his wages were. The last of the returns was prepared on the day before he died, by the plaintiff herself. They submitted that there is no reasonable cause to think the deceased has any additional employee entitlements beyond those that have been paid or calculated by the company’s accountant and set out in the Acorn Report.[71] The affidavit material shows, the Finadri defendants contend, that the deceased was willing to accept a low level of wages in order to minimise child support payments.[72] In any event, the documents sought will simply record the wages and all other amounts paid, and those are already recorded in the taxation returns and group certificates that the plaintiff already has in her possession.[73]
[71]Second Kiatos affidavit [10], exhibit CK-4.
[72]First Pandolfo affidavit, exhibit AMP-2. This is disputed by the plaintiff in the Second Pandolfo affidavit [4]-[13].
[73]First Pandolfo affidavit, exhibits AMP-7 and AMP-10.
Initially, counsel for Finadri Windows submitted that this requirement does not include the quantum of the claim once the existence of the claim is established and known to the applicant.[74] Later, after reference to the authorities to which I have referred above at [21(a)], counsel submitted that the authorities, particularly Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (‘Quanta’)[75] upon which Hely J partly relied in his decision in St George Bank Ltd v Rabo Australia Ltd,[76] was directed to the amount of damages that might be recovered. But, it was submitted, in this case the potential claim is not for damages but for payment of a specific sum.[77] Thus, the authorities should be construed as limiting preliminary discovery of documents relevant to quantum to causes of action sounding in damages.
[74]Transcript of Proceedings, 15 March 2018, 90-91.
[75](2000) 175 ALR 536, particularly [33]-[34].
[76](2004) 211 ALR 147.
[77]Defendant’s Responsive Submissions dated 11 April 2018 [21]–[23].
Consideration – the third question
It is clear, in my view, that in this case the quantum of a claim is a matter about which preliminary discovery may be obtained because the applicant does not have sufficient information to enable her to decide whether or not to commence a proceeding in this Court. In my view, in order to have information sufficient to make that decision, the applicant is entitled to discovery to determine the extent of the respondent's breach and the likely quantum of any damages or claims and to determine what defences are available to the respondent and the possible strength of those defences. In this case, the information available to the applicant is conflicting, based on documents or materials not disclosed, and also based on statements attributable to the deceased of uncertain accuracy, being the statements made in the informal will.
The documents substantiating the representation made in the Marie Mosca email and substantiating or supporting the statements in the Acorn Report are highly material to the plaintiff's decision as to whether to commence a proceeding in this Court. Documents relating to his length of service, and whether long service leave had previously been taken or paid in lieu, will also be essential to a claim for long service leave under the LSLA.
This kind of documentary material does not just incidentally support or provide information about the full range of material relating to employment benefits unpaid. It is essential information regarding the basis of calculating the benefits said to be owed. If it turns out, for example, that the material used by the accountants in the Acorn Report is substantially correct, then that would be directly relevant to any decision to commence a proceeding in respect of the benefits referred to in that report. It would undermine the existence of a proper basis for the commencement of the proceeding. By the same token, when the basis of the calculations is revealed, and reconciled against the Marie Mosca email, it may show that Finadri Windows has proceeded on a false basis and that more is owing, or arguable so.
Finadri Windows is also trustee of the Finadri Family Trust, a discretionary trust.[78] The plaintiff has been told by an unidentified member of the Finadri family that at the time of his death the deceased was indebted to the trustee of the family trust in the sum of $241,000.00, and she has no further information about this.[79] In the course of the hearing, and in the context of an admitted liability by Finadri Windows to pay employee entitlements and superannuation, which had not been paid, counsel for the Finadri defendants referred to the existence of offsetting claims by Finadri Windows under loan accounts, presumably in the Finadri Family Trust and that therefore the Court -
should not assume that just because there's an amount owing on one item, therefore that item is payable regardless of offset in claims that would be made, once proceedings are commenced for the recovery of the items about which the plaintiff knows there are rights.[80]
[78]First Pandolfo affidavit [29]; Second Kiatos affidavit [11].
[79]First Pandolfo affidavit [31].
[80]Transcript of Proceedings, 15 March 2018, 97–98.
Given the statement in the Acorn Report referred to above at [48] regarding drawings by the deceased in preference to wages, and the absence of any such drawings being declared in the deceased’s income tax returns, there is reason to believe the plaintiff may be entitled to moneys standing to the credit of loan accounts in the Finadri Family Trust, of which Finadri Windows is trustee. Those loan accounts may, of course, show moneys are owed by the deceased.
The existence, basis for and quantum of such ‘loan accounts’ is directly relevant to any decision by the plaintiff whether or not to commence proceedings to recover unpaid employment benefits. It is a matter that relates to what defences are available to the defendant and the possible strength of those defences and the likely quantum of any damages award.[81]
[81]St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147, 154 [26(f)]; B J Bearings Pty Ltd v Whitehead [2016] VSC 44 [19(2)].
The quantum of the claims for employment benefits, the existence of off-setting claims and defences and documents that expose the strength or weakness of Finadri Windows’ claims that limited amounts are owing for wages, long service leave, holiday pay and the like are, in my view, documents which the plaintiff is entitled to have discovered so as to make a decision whether or not to commence a proceeding in this Court.
I disagree with the submission by the Finadri defendants that the quantum of the claim is, on the authorities, only available if the claim is one for damages. Each case must depend on its own facts and circumstances. The Quanta[82] decision concerned damages for breach of copyright. The extent to which copyright has been infringed may be highly material to a decision to commence a proceeding in respect of infringement of copyright. A trivial claim may not be worth pursuing and might prove to be a waste of the time and resources not only of the applicant but of the Court. In this case, to limit such a consideration to a damages claim, would be nonsensical. The same considerations as were relevant in the Quanta[83] decision are relevant here. Added to that, here there is the potential for off-setting claims arising under loan accounts which should be known and quantified for similar reasons.
[82](2000) 175 ALR 536.
[83](2000) 175 ALR 536.
Salary Sacrifice to Superannuation
The focus of the debate in relation to this category of discovery was on the first question, whether the plaintiff has reasonable cause to believe that she may have a right to relief in the Court from Finadri Windows?
If the plaintiff establishes an affirmative answer to that question, the second, third and fourth questions seem to me to follow. The plaintiff has made all reasonable enquiries in respect of this matter as with respect to the employee entitlements. She plainly has insufficient information to enable her to decide whether to commence proceedings in this Court to obtain the relief postulated, namely payment to the Adrian Finadri & Family Superannuation Fund, or damages for breach of a salary sacrifice agreement, or for some related relief. It is also reasonable for the plaintiff to believe that Finadri Windows, as the employer of Adrian over a long period, has or has had or is likely to have had possession of the documents sought, namely some record of the existence of a salary sacrifice agreement. Ordinarily speaking, it would be expected that Finadri Windows has some documentation relating to any salary sacrifice or other basis for contribution of such a sum to an employee’s superannuation fund.
The first question – plaintiff’ submissions
The plaintiff submitted that the statements made in the informal will provide a basis for the belief by the plaintiff that she has a cause of action for unpaid superannuation contributions. They show that Adrian had some reason to believe that superannuation contributions of $50,000.00 for each year from 2012 to 2016 would be payable to the Adrian Finadri & Family Superannuation Fund by Finadri Windows.
The plaintiff produced extracts from the tax returns of the Adrian Finadri & Family Superannuation fund, a self-managed superannuation fund, showing for the 2015, 2016 and 2017 years that there were no employer contributions paid.[84] The Acorn Report acknowledges there is a liability of $5,795.00 for the 2015 and 2016 years.[85] There will also be an amount for the 2017 financial year.
[84]Third Pandolfo affidavit [9], exhibit AMP–29.
[85]Second Kiatos affidavit, exhibit CK‑4.
The plaintiff contended, and the Finadri defendants did not dispute, that the entitlement of the plaintiff to sue for unpaid superannuation owing pursuant to a salary sacrifice agreement is supported by an analysis of the Fair Work Act2009 (Cth) (‘FWA’) undertaken by the plaintiff’s counsel.[86]
[86]Plaintiff’s Supplementary Outline of Submissions dated 5 April 2018 [7]–[24].
First question – Finadri defendant’s submissions
Finadri Windows submitted that there is no reasonable basis for asserting an agreement existed between Adrian and Finadri Windows to pay the additional superannuation. Other than a vague reference to something Adrian allegedly told the plaintiff at an unspecified time prior to his death,[87] and the disputed informal will, there is no material to suggest there was any agreement by Finadri Windows to pay $50,000.00 a year as superannuation.
[87]First Pandolfo affidavit [26].
By contrast, handwritten notations made by the plaintiff on the correspondence that preceded the commencement of this proceeding make no reference to superannuation as part of Adrian’s entitlements.[88] There is thus no reasonable cause to believe the plaintiff has a right to obtain relief regarding superannuation of $50,000.00 a year as required by r 32.05(a) of the Rules.
[88]First Pandolfo affidavit, exhibit AMP-2, emails following the Peter Darmos email of 10 May 2017.
It was also submitted by the Finadri defendants that:
(a) despite the allegation of a failure to pay superannuation for 4 years, and the assertion in the informal will of an unpaid entitlement, there were tax returns filed on behalf of Adrian[89] and superannuation returns prepared by his superannuation trustee,[90] which in effect acknowledge no such entitlement;
(b) the plaintiff is an accountant and had detailed knowledge of Adrian’s employment circumstances. Before Adrian’s death, neither he nor the plaintiff complained about non-payment of superannuation, so far as the evidence shows. Also, the alleged arrears of superannuation are not included in the inventory of assets used to obtain letters of administration[91].
[89]First Pandolfo affidavit, exhibit AMP‑7.
[90]First Pandolfo affidavit, exhibit AMP‑29.
[91]. First Pandolfo affidavit, exhibit AMP‑6.
The Finadri defendants submitted that the superannuation category of documents sought to be discovered is vague. It requires discovery of all documents evidencing all payments made to or on behalf of the deceased in relation to superannuation between July 2011 and August 2016. It was also submitted that the acknowledgment that there is superannuation payable is the end of that matter and no more information is needed.
Consideration – the first question
In my view the plaintiff has established to the appropriate standard that there is a reasonable cause to believe that she has or may have the right to obtain relief from Finadri Windows in relation to the alleged salary sacrifice agreement.
The assessment of whether the plaintiff has reasonable cause to believe that she may have a right to relief in the Court from Finadri Windows in respect of the non-payment of the alleged superannuation of $50,000.00 per annum needs to be only a superficial one. It does not require a conclusion that the plaintiff is likely to succeed. The material in support of the claim is all hearsay, both as to what the deceased told the plaintiff and what appears in the informal will. Nevertheless, objectively determined, it provides a real basis for the belief that the plaintiff has reasonable cause to believe that she may have a right to relief in the Court from Finadri Windows. The arguments advanced by Finadri Windows are more relevant to the final determination of whether the alleged agreement was made.
It is important to recognise that this finding, particularly in respect of the jurisdiction of this Court under the FWA, is not a finding that this Court has jurisdiction in relation to that matter. It is merely that there is a reasonable basis for the belief that she may have the right to that relief. The jurisdiction of this Court has not been fully argued nor fully considered. However, in support of the finding it is relevant to observe that apart from the provisions of the FWA, or for that matter the provisions of the Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee Charge Act 1992 (Cth), there are allegations of a contract, agreement or arrangement between the deceased and Finadri Windows in relation to a salary sacrifice which, if breached, may sound in damages for breach of contract, and other causes of action and relief, because rights to such a cause of action vest in the plaintiff pursuant to s 29 of the Administration and Probate Act 1958.
In relation to the criticism that this category is vague, in my view, it is not vague, it is general. Its generality can be appropriately limited in the orders of the Court. The absence of any reference to superannuation in the inventory of assets filed in support of the grant of administration is likely to be because the superannuation did not fall into the estate, there being a binding nomination at death to a particular person.
In truth, documents relating to superannuation entitlements are covered by two categories advanced (see above at [40]). First, paragraph (a) concerns documents relating to the employment of the deceased in the business that state any ‘benefits and entitlements to which the deceased was entitled…’. This includes superannuation to which the deceased may have been entitled pursuant to a salary sacrifice. Second, documents evidencing all payments made to or on behalf of the deceased in relation to superannuation between July 2011 and August 2016. This will pick up only documents ‘evidencing’ payments made, rather than entitlements. It seems to me that greater precision is required in any order for preliminary discovery of documents in the ‘salary sacrifice to superannuation’ category.
Conclusion
In this case I am satisfied that the plaintiff has established that she is entitled to preliminary discovery from Finadri Windows. Preliminary discovery should be made of documents which relate to the general subject matters set out above at [40]. The parties should endeavour to agree on the formulation of such relief. If agreement cannot be reached as to the appropriate form of orders to give effect to my decision, each party should submit to my associate a draft of the orders which that party proposes should be made.
By way of guidance, I provide the following suggestion. Finadri Windows, the fourth defendant, should provide discovery under r 32.05 of the Rules in respect of the following classes of documents:
(a) documents relating to the employment of the deceased by Finadri Windows that state, record or relate to any benefits or entitlements to which the deceased was or may be entitled for the period July 2011 to August 2016 including documents:
(v) relating to the deceased’s entitlement to payment for annual leave;
(vi)relating to the deceased’s entitlement to long service leave;
(vii) relating to the deceased’s entitlement to superannuation, including any superannuation pursuant to any contract, agreement or arrangement pursuant to which the deceased sacrificed his salary for payment of superannuation;
(b) documents recording entitlements to payments by, and liabilities to, Finadri Windows as trustee of the Finadri Family Trust, for the period July 2011 to August 2016.
I will hear the parties in relation to the final form of the order if no agreement can be reached and in relation to the costs, both of the hearing and later costs of discovery.
SCHEDULE
Last Will and Testament of Adrian Paul Fiore Finadri (date of birth 14th September 1968) of 3006/9 Power Street, Southbank.
I, Adrian Paul Fiore Finadri hereby declare this to be my Will and Testament. I hereby revoke all previous wills and testaments made by me.
I nominate my wife Anna Maria Pandolfo (date of birth 15th May 1972) of 3006/9 Power Street, Southbank to be the Executor of my Estate. I nominate Anna because she is an Accountant and will be competent in her duties as Executor of my Estate.
In the event of my death I leave all of my estate to my wife Anna Maria Pandolfo. My estate includes the following assets:
15 Sturrock Street, Brunswick
Cash at Bank
$50,000 cash held on my behalf in the safe on the premises of Finadri Windows Pty Ltd
$300,000 to be repaid to me from Aquaflex Pty Ltd atf Aquaflex Trust. I want this deposited into the Adrian Finadri & Family Superannuation Fund as a personal non-deductible contribution
$250,000 of superannuation contributions ($50,000 each year for 2012, 2013, 2014, 2015 & 2016) owed to Adrian Finadri & Family Superannuation Fund from Finadri Windows Pty Ltd and associated entities
Adrian Finadri & Family Superannuation Fund including cash at bank, property and life insurances (I have a signed binding death nomination for this fund stating 100% to my wife Anna Pandolfo)
Shares in Rhoden Investments Pty Ltd. Rhoden Investments Pty Ltd has sold various properties in the past 3 years and I have not received any monies/dividends at all. My brother Walter Finadri has used and misappropriated all the funds in the NAB bank accounts held by Rhoden Investments Pty Ltd for his use. I estimate my share is $1,000,000 and I want all monies thoroughly accounted for and repaid to me.
Westpac Life Insurances, including life insurance policies paid by Finadri Windows Pty Ltd
1/5 share of sale proceeds of 7 Edgar Street, Rye ($92,000 is my share)
Beneficiary entitlements in various entities, companies and trusts that my parents Marco and Marina Finadri, and my brother Walter Finadri are directors and shareholders. These entities include, Aquaflex Pty Ltd atf Aquaflex Trust, Finadri Windows Pty Ltd, Finadri Properties Pty Ltd, FWICO Pty Ltd. I estimate my share of these as approx.. $2,000,000
Share of property held in Finadri Properties Pty Ltd, including 287-289 Victoria St Brunswick
$20,000+ owed to me for unpaid wages & distribution in the 2015 year
$1562.50 monthly interest from Aquaflex P/L to me for the period from August 2015 to present. This monthly interest will continue to be paid to me until Aquaflex Pty Ltd repays me the $300,000 that it owes me.
$1160 weekly distribution from Aquaflex Pty Ltd, this will continue to be paid to me until all my beneficiary entitlements are paid to me.
Personal chattels
…
[Parts not relevant to the current application not reproduced]
This will and testament is signed on the 11/9/2015
ADRIAN FINADRI [Witness stamp of Dr Andrew Monk] …
SCHEDULE OF PARTIES
ANNA MARIA PANDOLFO (in her capacity as Administratix of the Estate of Adrian Paul Fiore Finadri) Plaintiff - and - WALTER FINADRI First Defendant MARCO FINADRI (in his capacity as trustees of the Finadri Superannuation Fund) Second Defendant MARIA FINADRI (in her capacity as trustees of the Finadri Superannuation Fund) Third Defendant FINADRI WINDOWS PTY LTD (ACN 005 544 249) (in its own capacity and in its capacity as trustee for the Finadri Family Trust) Fourth Defendant FINADRI PROPERTIES PTY LTD (ACN 073 141 090) (in its capacity as trustee for the Finadri Properties Unit Trust) Fifth Defendant AQUAFLEX PTY LTD (ACN 006 888 400) (in its capacity as trustee for the Finadri Investment Trust) Sixth Defendant RHODEN INVESTMENTS PTY LTD (ACN 103 132 789) Seventh Defendant FWICO PTY LTD (ACN 069 984 256) Eighth Defendant TARTAGLIA LAWYERS PTY LTD (ACN 167 518 729)Ninth Defendant
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