Phoenix Eagle Company Pty Ltd v Ardrey [No 2]
[2016] WASC 417
•21 DECEMBER 2016
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: PHOENIX EAGLE COMPANY PTY LTD -v- ARDREY [No 2] [2016] WASC 417
CORAM: KENNETH MARTIN J
HEARD: 8 NOVEMBER 2016 & ON THE PAPERS
DELIVERED : 21 DECEMBER 2016
FILE NO/S: CIV 3072 of 2011
BETWEEN: PHOENIX EAGLE COMPANY PTY LTD
Plaintiff
AND
WILLIAM JAMES ARDREY
Defendant
Catchwords:
Practice and procedure - CMC List action - Directions - Freezing order - Related criminal proceedings - Criminal convictions in District Court matter set aside on appeal - Retrial ordered - Request for categories of documents by plaintiff - Defendant acting in person - Retrial pending - Deferment of discovery until retrial outcome known - Turns on own facts
Legislation:
Nil
Result:
Orders given
Category: B
Representation:
Counsel:
Plaintiff: Mr P Ward
Defendant: In person via interstate telephone link
Solicitors:
Plaintiff: Williams + Hughes
Defendant: In person
Case(s) referred to in judgment(s):
Andrew Koh Nominees Pty Ltd (as trustee for KL Unit Trust) v Pacific Corporation Ltd [No 3] [2010] WASC 248
Ardrey v The State of Western Australia [2016] WASCA 154
McMahon v Gould (1982) 7 ACLR 202
Phoenix Eagle Company Pty Ltd v Ardrey [2016] WASC 175
KENNETH MARTIN J: A directions hearing was convened in this long-running matter on 8 November 2016.
For the purposes of the hearing, the plaintiff provided a minute of proposed orders (filed 7 November 2016) supported by an affidavit of Clara Elisabeth Hagan sworn 7 November 2016. The defendant, Dr Ardrey, acting in person, participated in the directions hearing via a telephone link to Queensland, where he is currently based. He also provided his own version of a minute of proposed orders for the directions hearing, part of which seeks a discharge or variation of freezing orders which I had previously issued in August 2015 against him and which orders have continued after then. See, generally, Phoenix Eagle Company Pty Ltd v Ardrey [2016] WASC 175 [6] - [13].
The freezing orders still in place were issued at a time when Dr Ardrey had the benefit of legal representation. Arguments occurred seeking those freezing orders in the wake of Dr Ardrey's conviction on 3 March 2015 before a jury in the District Court of Western Australia in respect of various fraud offences associated with his former position as a director of the plaintiff.
Since the issuance of the freezing orders Dr Ardrey has, in effect, represented himself before me in numerous directions hearings, frequently appearing over a telephone link to Acacia Prison.
I have case managed this matter since August 2015 and the matter has progressed upon a basis that Dr Ardrey had been pursuing an appeal to the Court of Appeal against his District Court convictions. On 1 September 2016 the Court of Appeal of Western Australia (Buss P, Mazza and Mitchell JJA) delivered their reasons for decision in Ardrey v The State of Western Australia [2016] WASCA 154, effectively allowing Dr Ardrey's appeal against his convictions but, significantly, ordering a retrial. Buss P said at [139] - [140]:
In my opinion, the appropriate orders in relation to counts 2 to 19, consequent upon the ground of appeal having been made out, are to grant leave to appeal on the ground of appeal, allow the appeal, set aside the judgments of conviction on counts 2 to 19 and require that there be a new trial on those counts. I would hear from the parties in relation to the setting aside of the compensation order in favour of Phoenix.
The interests of justice favour an order for a new trial and not an order that there be judgments of acquittal. The appellant did not submit otherwise. I am not satisfied, on my examination of the trial record, in the context of the proposed additional evidence, that the State has no reasonable prospect of success at a new trial. On my assessment, the State has at least reasonable prospects of successfully persuading a properly instructed jury that, on the evidence adduced at trial in the context of the proposed additional evidence, the jury should be satisfied beyond reasonable doubt as to the appellant's guilt on each of counts 2 to 19. The facts and circumstances of the case do not render it unjust to make the appellant stand trial again on counts 2 to 19.
Mitchell JA's reasons were to the same effect. Mazza JA agreed with the reasons of both appeal justices and proposed orders.
Essentially then, the upshot of Dr Ardrey's appeal was that his appeal was allowed upon ground 1 and a new trial was ordered in respect of counts 2 to 19, where he had been convicted.
Importantly, the status of a compensation order which had been issued by Levy DCJ in the aftermath of Dr Ardrey's first jury trial and his convictions was to be the subject of further arguments before the Court of Appeal. The compensation order issued after trial required Dr Ardrey to pay $394,000 in compensation to Phoenix Eagle, as a consequence of asserted losses sustained by the plaintiff corporation, consequent upon the corporate misconduct of which he had then been convicted.
Dr Ardrey has been allowed bail upon prescribed conditions pending his retrial. Given, however, the setting aside of Dr Ardrey's convictions on his appeal, the basis for the compensation order was thereby called into question.
At the hearing of the present directions application I was advised that the Court of Appeal had recently heard argument upon Dr Ardrey's application for, effectively, a refund to him of the $394,000 compensation order plus interest and had reserved its decision following arguments. Consequently, that decision is awaited. Likewise, I was advised that Dr Ardrey's retrial has been relisted for hearing in the District Court commencing 22 May 2017 for a period of four weeks.
These pending and unusual circumstances all bear upon the present application. After arguments at the directions hearing it was necessary to adjourn to allow receipt of further evidentiary material from Dr Ardrey. His position, in essentially opposing the plaintiff's proposed orders seeking discovery from him in the present action of categories of documents (under pars 3.1 to 3.12) of the plaintiff's minute of proposed orders, was that such orders were inappropriate, oppressive and/or prejudicial to him, bearing in mind the pending looming retrial of his criminal charges in the District Court of Western Australia during 2017.
There were some other relatively less contentious aspects of the directions hearing that can be dealt with immediately before turning to the more controversial and contested issue of discovery from Dr Ardrey. The first of these lesser issues is the proposed discharge of the current freezing orders which is now sought by Dr Ardrey or, alternatively, his application that funds currently held in court and the subject of my previous order (see Phoenix Eagle Company Pty Ltd v Ardrey [10] - [13]) be adjusted, in order to allow him to divert some or all of those moneys to meet the school fees incurred by one or more of his children in Queensland.
Discharge or variation of current freezing orders and/or direction towards payment of moneys currently in court to Dr Ardrey's direction
In the first place, it is not presently appropriate, as I indicated at the directions hearing to Dr Ardrey, to even contemplate a discharge or variation of the presently subsisting freezing orders which currently apply to constrain his dealings with assets. That is the case notwithstanding the decision of the Court of Appeal allowing Dr Ardrey's appeal against his convictions and ordering a retrial. In short, there have been, and continue to be, ongoing issues of disputation in this action over whether or not Dr Ardrey has fully complied with and properly met prior orders which I have issued requiring him to make a full and comprehensive disclosure of his assets and liabilities. The position of Dr Ardrey is that, in effect, he has complied with and done all that is required to satisfy those prior orders and that some materials which he had placed before Centrelink in order to receive Newstart benefits would make this clear. In fact, it does not, as later emerged.
The material was not before the court at the directions hearing and was one of the reasons why I thought it appropriate to reserve and allow for the further materials to be provided.
Subsequently, the court received Dr Ardrey's 16 paragraph affidavit and annexures sworn 9 November 2016. However, the plaintiff's solicitors, by their submissions of 15 November 2016, submit that Dr Ardrey's further affidavit addressing his Centrelink asset disclosure was still inadequate, for reasons which they elaborate upon.
It is not possible to resolve this continuing dispute over whether or not Dr Ardrey has given full and proper disclosure concerning his assets. On the face of the materials placed before me, the prima facie position looks to be that he has not, for the reasons explained in the 15 November 2016 correspondence from the plaintiff's lawyers. Dr Ardrey, of course, disputes that in his further responsive email to my associate of 21 November 2016, pointing to allegedly severe constraints which bear upon him in terms of access and documentation and a problematic state of health, issues coincident with what he also raises as his stringent reporting and signing in current bail conditions pending his retrial.
I repeat that, as I indicated to Dr Ardrey at the directions hearing held over the telephone, I will not contemplate any discharge or adjustment to the current freezing orders which are in place until I am fully satisfied that he has rendered a complete and fulsome account of all his assets and liabilities. Currently, the position is that I have not reached that standard of satisfaction concerning his asset position.
As regards Dr Ardrey's further submission concerning what I infer is to be a deployment of funds in court towards meeting school fees in satisfaction of what might be thought to be an invoice from a Queensland educational institution in respect of one of his children, this application is also misconceived. I reiterate the terms of my reasons in Phoenix Eagle Company Pty Ltd v Ardrey of 13 June 2016 in relation to the existence of an agreement which specifically applies to those funds now held in court. A deployment of those funds as is sought by Dr Ardrey to meet school fees is inconsistent with the terms of the agreement applicable to Dr Ardrey (see [12] of those reasons).
Subpoenas
The next lesser aspect of the directions hearing concerned the leave which was sought by the plaintiff to issue subpoenas to third parties. Leave was necessary because of previous orders which I had issued as something of a control measure within this Commercial and Managed Cases (CMC) list case managed matter, requiring the parties to obtain leave before subpoenas were issued to third parties for documents.
The essential reason why the plaintiff was pursuing leave in respect of the three foreshadowed subpoenas is tied to the dissatisfaction of the plaintiff with the level of disclosure concerning assets and liabilities provided by Dr Ardrey to date. Under par 1 of the plaintiff's proposed minute of orders leave was sought to issue subpoenas in the terms of the drafts attached to that minute annexed to Ms Hagan's affidavit of 7 November 2016. The entities to whom it was sought to issue the subpoenas were Dr Ardrey's ex-wife, Susan Chen Ardrey, the National Australia Bank, and to Dr Ardrey's former or current appeal legal representatives, Holborn Lenhoff Massey.
I am satisfied that leave should be granted for the issue of these document subpoenas as sought, on the basis of the explanation provided by the plaintiff, including the material in Ms Hagan's affidavit. However, as regards the proposed subpoena to Holborn Lenhoff Massey, I would simply observe that a grant of leave to issue such a subpoena does not undermine any legitimate claim of privilege which might constrain the production of the requested documents. However, whether or not the privilege is asserted is a matter that can be addressed in due course, if it arises. I note in particular a proposed category of documents, item 2, in respect of Holborn Lenhoff Massey's trust account statement for Dr Ardrey showing all trust account transactions relating to him, on the face of it, ought not to jeopardise the status of any underlying privileged advice material, although that is simply a prima facie observation. If there is any legitimate issue arising concerning privilege issues, then such questions can be addressed at the appropriate time and in the appropriate way by way of objection to the production of the documents requested, by reference to raising an appropriate ground of objection.
Within the course of the exchange of materials that followed after the directions hearing the plaintiff's solicitors, having regard to material now disclosed by Dr Ardrey, sought to seek leave to issue three further document subpoenas - namely, to St George Bank, to BankWest and to Ms Elizabeth Stannard, director of business and finance at the Queensland educational institution in respect of which Dr Ardrey had requested that funds be diverted from the moneys in court in order to meet school fees charged to or payable by the Ardrey family for the years 2015 and 2016.
In the circumstances, I am of the view that there should be leave to the plaintiff to issue the three further subpoenas, in the terms as articulated at pages 2 and 3 of the plaintiff's solicitors' correspondence (a letter) of 15 November 2016 and the draft subpoenas annexed to an email of that date, following the directions hearing. I am satisfied that the six draft subpoenas in aggregate pursue legitimate lines of enquiry by the plaintiff.
Last issue: the giving of discovery in this action by Dr Ardrey
As mentioned, par 3 of the plaintiff's minute seeks categories of discovery on a non‑exclusive basis from Dr Ardrey.
During the course of the directions hearing there was a considerable amount of discussion concerning the appropriateness of an order for discovery in such terms at the present time, bearing in mind the fact that Dr Ardrey is currently facing a looming retrial in respect of the counts 2 through 19 in respect of which he was successful on appeal. Dr Ardrey's materials filed subsequent to the directions hearing add little from an evidentiary perspective to what was before the court at that time.
In short, the plaintiff contends that the pending criminal trial is not a real concern and that the present action commenced in 2011 needs to progress, given that the pleadings are now closed, with the categories of discovery which are being sought are both appropriate and necessary and that there should be no further delays.
During argument my attention was drawn to Andrew Koh Nominees Pty Ltd (as trustee for KL Unit Trust) v Pacific Corporation Ltd [No 3] [2010] WASC 248 [55], where Allanson J conveniently collected the applicable principles in relation to stay applications arising in circumstances where there is an intersection or potential intersection between matters to be canvassed in a civil litigation and pending criminal proceedings. A disinclination of the court to interrupt the ordinary progression of a civil action to trial as had been expressed by Wootten J in McMahon v Gould (1982) 7 ACLR 202 was noted. I will refer to, without repeating, the 12 principles collected by Allanson J in the reasons at [55], including possibly relevant factors enumerated under guideline 10: the proximity of the criminal hearing; the possibility of a miscarriage of justice by disclosure of a defence; the burden upon a defendant of preparing for both sets of proceedings concurrently; and the conduct of the defendant in terms of whether he is an initiator or respondent in the civil action. Likewise, guideline 11 notes the effect on the plaintiff as a factor needing to be considered and weighed as against the effect upon the defendant.
I have reviewed the categories of discovered material sought under par 3 of the plaintiff's minute. On the face of it, the categories, which are said to be non‑exhaustive, present as identifying prima facie relevantly discoverable materials for a trial. During the course of his submissions Mr Ward, counsel for the plaintiff, helpfully directed me to various paragraphs of the pleadings which provide a foundations in relevance for the 12 categories of discovery currently sought.
In the ordinary course of events, I would have issued orders for the discovery of such material as is sought (which was on the basis of a list of documents verified on oath provided within 28 days). However, those factors need to be balanced against the imminence of Dr Ardrey's pending retrial, the fact that he acts in person at least in the present action, that he is currently receiving Centrelink benefits, that he suffers (I am satisfied) from a number of health issues, and the aggregate burdens which would be imposed upon him by requiring him to provide discovery at the same time as giving his attention to the matters necessary for him to be prepared to meet his retrial.
Those factors, on balance, presently lead me to the view that, bearing in mind the relatively pedestrian pace at which this action has moved since it was commenced in 2011, where an amended statement of claim from the plaintiff was only finalised as at 20 July 2016, that reluctant as I am to impede the progress of the action to a final resolution, in the interests of justice, I see no other fair course at present, taking account of Dr Ardey's circumstances, other than to defer issuing orders for discovery in respect of the categories currently sought until after the outcome of the presently pending retrial of Dr Ardrey in 2017. There will be liberty to apply to the plaintiff in that regard.
It may be that the reasons of the Court of Appeal, once published, in respect of the compensation order could bear upon this decision, as also might the state of Dr Ardrey's health. My impression at the present time, however, is that it would be oppressively burdensome to Dr Ardrey to expose him to what looks to be a significant amount of work in terms of assembling the materials requested under par 3 of the plaintiff's minute whilst his retrial is pending.
Other Issue
There is a further minor aspect to the present application concerning the payment of an amount of taxed costs ordered against Dr Ardrey previously. It is the application of the plaintiff that Dr Ardrey's indebtedness in this respect be met out of the funds presently held in court. I did not understand Dr Ardrey to oppose an order in such terms should I assess that to be appropriate. This is the subject of order 2 in respect of the plaintiff's proposed minute of orders of 7 November 2016 which seeks an order in terms that
The sum of $3,822.50 be paid to the plaintiff's solicitors out of funds currently held in trust by the Court in discharge of the debt arising by Certificate of Assessment of the plaintiff's bill of costs signed by Registrar S Boyle on 16 September 2016.
Bearing in mind the terms upon which those funds are currently held in court, I am of the view that an order in the terms of par 2 is appropriate in the aftermath of that taxation assessment and I will order accordingly.
End orders
Consequently then, the orders that will issue upon the publication of these reasons are in the following terms:
1.The plaintiff has leave to issue subpoenas to each of Susan Chen Ardrey, National Australia Bank, Holborn Lenhoff Massey, St George Bank, BankWest and to Ms Elizabeth Stannard, the director of business and finance at the [redacted] educational institution in Queensland.
2.An order in terms of par 2 of the plaintiff's proposed minute or orders of 7 November 2016:
The sum of $3,822.50 be paid to the plaintiff's solicitors out of funds currently held in trust by the Court in discharge of the debt arising by Certificate of Assessment of the plaintiff's bill of costs signed by Registrar S Boyle on 16 September 2016.
3.The obligation of the parties to provide discovery in this action in respect of the 12 categories of documents sought under par 3 of the plaintiff's proposed minute of orders of 7 November 2016 is stayed, pending the outcome of Dr Ardrey's retrial in the District Court. That stay will apply until further order in this action.
4.Dr Ardrey's applications in respect of a requested variation of the currently subsisting freezing orders and for payments of money out of court from moneys held in court to his requested recipients are refused.
5.There is liberty to apply.
6.The costs of the directions hearing of 8 November 2016 are to be costs in the overall cause of this present action.
2
4
1