Robinswood Pty Ltd v Deputy Commissioner of Taxation for the Commonwealth of Australia - [2002] WASCA 141

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: ROBINSWOOD PTY LTD & ORS -v- DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA [2002] WASCA 141

CORAM: SCOTT J
MILLER J

HEARD: 9 MAY 2002

DELIVERED : 9 MAY 2002

PUBLISHED : 22 MAY 2002

FILE NO/S: FUL 183 of 2001

BETWEEN: ROBINSWOOD PTY LTD
MADDELIENE CARATTI
ZEL NOMINEES PTY LTD
VENETIAN NOMINEES PTY LTD
GRANGEFIELD HOLDINGS PTY LTD
EXELCO MINING PTY LTD
MINE EXC PTY LTD
Applicants (Defendants)
AND
DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA
Respondent (Plaintiff)

Catchwords:

Appeal - Practice and procedure - Ruling to which appeal relates does not preclude submissions as to the admissibility of those witness statements where witness is not proposed to be called - Plaintiff's claim has been comprehensively particularised - Leave to appeal refused

Legislation:

Supreme Court Rules, O 63A

Result:

Leave to appeal refused

Category: B

Representation:

Counsel:

Applicants (Defendants) : Mr J A Davies
Respondent (Plaintiff) : Mr S Owen-Conway QC & Mr R E Lindsay

Solicitors:

Applicants (Defendants) : Davies & Co
Respondent (Plaintiff) : Australian Government Solicitor

Case(s) referred to in judgment(s):

Deputy Commissioner of Taxation for the Commonwealth of Australia v Robinswood Pty Ltd [2001] WASC 191

Case(s) also cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] 148 CLR 170
Australian Securities & Investments Commission v Doyle & Anor [2001] 28 ACSR 606; [2001] WASC 187 SCWA (20 July 2001)
Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214
Bristile Holdings Ltd & Ors v Giacci Brothers Pty Ltd [2000] WASCA 48
British Thomson-Houston Company Ltd v British Insulated and Helsby Cables Ltd (1924) 2 Ch 160
Carr v Finance Corporation of Australia (1) [1981] 147 CLR 246
Downs Irrigation Co-operative Association Ltd v National Bank of Australasia Ltd (No 2) [1983] 1 Qd R 475
East-West Airlines (Operations) Ltd v Cwth of Australia & Ors (1983) 49 ALR 323
Freehill Hollingdale & Page v Bandwill Pty Ltd & Anor [2000] WASCA 150 (2 June 2000)
G E and C E Havas v Drucker 91894) 2 QB 801
H v Schering Chemicals Ltd [1983] 1 All ER 849; 1 WLR 143
In Re Will of Gilbert (1946) 46 SR (NSW) 318
Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167 (20 June 2000)
Murine Eye Remedy Co v Eldred [1926] VLR 425
Pallante v Stadiums Pty Ltd (No 2) [1976] VR 363
Pearce v Button (1986) 8 FCR 408
Rejfek v McElroy (1965) 112 CLR 517
Rohde v Director of Public Prosecutions (1986) 161 CLR 119
Wentworth v Robers (No 12) (1987) 9 NSWLR 400
Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40
Willis v Earl Beauchamp (1886) 11 PD 59
Wilson v Metaxas [1989] WAR 285
Wing Luck Foods v Lay Choo Lim [1989] WAR 358
Wright v Doe d Tatham [1834] 1 Ad & E1, 1108

JUDGMENT OF THE COURT: The applicants in the above actions are the defendants in relation to civil proceedings brought by the respondent (plaintiff) alleging the under‑payment or non‑payment of group tax in relation to a substantial number of employees.
The proceedings have been case‑managed by Wheeler J. This appeal brought under O 63A of the Supreme Court Rules is in relation to an interlocutory decision of Wheeler J delivered on 3 August 2001 in the matter of Deputy Commissioner of Taxation for the Commonwealth of Australia v Robinswood Pty Ltd [2001] WASC 191.
Wheeler J was dealing with an application to strike out portions or, alternatively, the whole of the statement of claim and for orders under O 29 of the Rules of the Supreme Court in relation to certain evidence. The latter part of the application under O 29 related to evidence given at a criminal trial in which a number of accused persons were charged on indictment with a conspiracy to defraud the Commonwealth. The conspiracy alleged was that there was a continuing agreement to deprive the Commissioner of Taxation of tax instalment deductions from a large number of employees of various Caratti group entities (including the applicants). It is not necessary to descend into particulars of the conspiracies or the various persons and companies said to have been involved in the conspiracy.
The grounds of appeal against the decision of Wheeler J are:
"1.The Court erred in concluding that evidence admitted into the 'criminal proceedings' be admitted into the civil proceedings in that:
(a)The parties to the civil proceedings are not the same as the parties to the criminal proceedings;
(b)The issues in the criminal proceedings are not the same as the issues in the civil proceedings in particular the issue of actual direction of contractors or employees was not in issue in the criminal proceedings;
(c)The opportunity to cross‑examine witnesses in the criminal proceedings was not available to the Appellants (Defendants) (save Maddeliene Caratti) and thus, the Court erred in concluding that the opportunity for cross‑examination was a sufficient reason to admit into the civil proceedings the evidence admitted into the criminal proceedings;
(d)The decision to admit into the civil proceedings the evidence admitted into the criminal proceedings is inconsistent with the Court's earlier conclusion that it was not the Court's function 'on this application' to determine questions of admissibility.
2.The Court erred in not hearing oral argument on the Respondent's (Plaintiff's) application to admit into the civil proceedings the evidence admitted into the criminal proceedings.
3.The Court erred in not striking out the amended Statement of Claim or alternatively permitting the Minute of Proposed Amended Statement of Claim dated 30 November 2000 to stand (in that or a further amended form) as the Statement of Claim ("The SOC") in that:
(a)The SOC pleads conclusions and assertions of law rather than material facts;
(b)The SOC assumes the fact of employment by named persons without pleading the material facts upon which that assumption is based;
(c)The decision to allow the SOC to stand is inconsistent with the Court's recognition that were [sic] contracts of employment are alleged relevant material facts include the date, place and substance of conversations which give rise to the alleged contract;
(d)The precise terms of the alleged contract of employment are central to determining the critical question of whether there was or were relevant employment contracts in existence.
(e)If the alleged contract of employment is to be proved by conduct the material facts alleging that conduct must be pleaded."
Essentially the grounds of appeal fall into two areas:
1.Whether her Honour erred in concluding that the evidence given at the criminal trial could be used as evidence in the civil proceedings; and
2.Whether her Honour erred in not striking out the amended statement of claim or alternatively permitting the minute of proposed amended statement of claim dated 30 November 2000 to stand.
These two aspects of the appeal should be dealt with separately. In relation to the first matter, Wheeler J, in her reasons published on 3 August 2001, said at [27 - 29]:
"The interests of justice must be borne steadily in mind in deciding whether to make an order pursuant to that rule, and any questions of prejudice to any party must be carefully considered. However, where, as here, the evidence would have been admissible in these proceedings if the witness were "not capable" of being called, it is appropriate to depart from the common law rule to the extent of permitting the admission of the evidence where the witness may be capable of being called but where it appears that undue expense and inconvenience (to the parties, to the court, and - not least - to all those witnesses who would otherwise be called to give the same evidence a second time) would be caused by a requirement to call the witnesses. I have not been pointed to any prejudice which would be caused to the defendants by such an order in this case.
I should add that it appears to me that if I were wrong in the view that I have formed of O 29, it would nevertheless be possible to achieve the same effect by at least one, and possibly two, other routes. The first route would be to treat the evidence at the criminal trial as indeed "glorified witness statements" and to direct that the evidence at the criminal trial identified by the plaintiff stand as the written witness statements of proposed evidence-in-chief pursuant to O 29 r 2(1)(m) and (n) together with par 8 of Practice Direction No 4 of 1995. I would also in that case be prepared to make an order pursuant to the rules and the practice direction dispensing with the usual practice of calling the witness and requiring the witness to read the statement. Alternatively, it may be that the evidence could be read in any event pursuant to O 36 r 10. The commentary in "Seaman" on that rule suggests that it will only be applicable where the two causes were between the same parties or their privies, but it may well be that for reasons which I have already expressed, the parties in these two matters could be regarded as relevantly "the same".
I would therefore make orders in terms of par 1 and par 2 of the plaintiff's chamber summons for orders dated 16 May 2001. So far as par 3 and par 4 are concerned, I am of the view that orders broadly to this effect would be desirable. However, rather than working backwards from the date of the hearing, it seems to me that it is more desirable to order that the relevant notifications take place within a specified period from the date of this decision. The reason for this view is that it seems to me that it will be easier to estimate the length of the trial with some accuracy, and thus to set trial dates, once it is known how many witnesses are likely to be called for cross-examination and how many witnesses there may be in respect of whom the plaintiff wishes to adduce further evidence. I would therefore direct that the plaintiff draw up a proposed minute of orders reflecting these observations, and confer with the defendant's solicitors. The minute can then either be the subject of a consent order, or any difference in relation to the proposed times can be the subject of brief oral or written submissions."
The difficulty envisaged by counsel for the applicants arises not from the reasons of Wheeler J, but from the terms of a draft order which we were told is yet to be extracted and which, it is said, does not properly reflect the reasons. The first thing to be noted about that proposition is that when the order is ultimately settled and extracted, it may well be formulated in terms which properly reflect the reasons of Wheeler J and so obviate the problem.
The relevant provision of the proposed order as shown in the notice of appeal at page 2 of the appeal book is:
"3(a)That the transcript evidence of each witness identified in the witness spreadsheet annexed hereto and marked with the letter 'A' which was given in the Supreme Court of Western Australia before Murray J and jury on the trial of indictment number 1191 of 1996 between The Queen v John Michael Caratti, Alan Bruce Caratti and Maddeliene Caratti, and which is identified in the spreadsheet by transcript page number in each case, be received as the evidence of each specified witness in these proceedings."
It is not clear from the materials before us as to whether any order has in fact been made in those terms, but for the purposes of these reasons it is to be assumed that it has. If such an order was made, then it is clear that it does not properly reflect the reasons of Wheeler J because her Honour said at [29] of her reasons in relation to the terms of the application:
"So far as par 3 and par 4 are concerned, I am of the view that orders broadly to this effect would be desirable."
Order 3(a) which was sought by the plaintiff is set out above.
In the course of argument on this appeal it became apparent that the rulings of Wheeler J did not preclude submissions as to the admissibility of all, or any of, those witness statements in circumstances where the witness will not be called. Mr Owen‑Conway QC, senior counsel for the respondent in each matter, said:
"We would include the whole of the evidence‑in‑chief, in cross‑examination and re‑examination and that should be received subject to the qualification which her Honour expressed in her reasons for decision. We made it clear at all times that if any objection were to be taken on the basis of relevance or hearsay or some other basis, that could be taken but it should not be necessary for the witnesses to have to come back and confirm again under oath that the evidence they gave under oath was true. That was wholly unnecessary."
Senior counsel for the respondent made it clear that if any witness or witnesses were required for cross‑examination, the respondent would make them available if they were capable of being called.
In those circumstances, it seemed to us that this ground of appeal was misconceived. It is clear, in our view, from her Honour's reasons that she was not seeking to preclude any arguments as to the admissibility of witness statements that may arise at the trial. Those arguments may arise at common law or under the relevant provision of s 79C of the Evidence Act 1906 and can be ruled on by the trial Judge on a statement‑by‑statement basis. It is clear, in our view, from her Honour's reasons that she was not seeking to preclude counsel for the applicants at trial from advancing such arguments, nor pre‑empting any rulings which the trial Judge might make.
Once these propositions were accepted by counsel for the applicants, this issue was not pressed further.
As to the second matter, the subject of these appeals, it is apparent that the statement of claim in this action must be looked at along with the other materials provided by the respondent. That includes the spreadsheets which senior counsel for the respondent tendered in the course of this appeal, together with the particulars that we are told are contained on a number of CD‑ROMs which have also been provided to the applicants' solicitors in the course of discovery and which contained detailed particulars of all of the employees (or subcontractors) relevant in these proceedings. That material has been provided in substantial detail and cover in excess of 14,000 payments said to have been made to individual employees.
Having perused the particulars provided in the statement of claim, the particulars provided in the schedules tendered to us and having taken into account the particulars which are said to be on the CD‑ROMs to which we have referred, we came to the view that the plaintiff's claim has been particularised as comprehensively as it is possible to do. In that respect her Honour's reasons were not in error. Her Honour said at [46]:
"In relation to the question of whether the statement of claim sufficiently puts the defendant on notice of the case to be met, the statement of claim is of course not to be considered in isolation, but must be considered together with the schedules which are expressed to be schedules to it, and should I think also be considered to be amplified and supplemented by the additional spreadsheet schedule to which I have referred. It is submitted on behalf of the defendants that the schedules do not assist in curing what are said to be the defects of the statement of claim, in part because the material facts must be found in the statement of claim itself and second, as I understand it, because the schedules contain matters of evidence. In my view, it is appropriate in a case where there is considerable factual detail, as here, but where it is also said that the facts fall into a relatively limited number of categories, to deal with the issues by categorising the facts in a relatively broad way in the statement of claim and particularising the detail of the allegations either by particulars or, as here, by picking up in the schedules the names of the alleged employees and the relevant dates at which their employment is alleged to have taken place."
Having reviewed the reasons of her Honour and having taken into account the submissions and authorities advanced by counsel for the applicants, we were of the view that ground 3 of the grounds of appeal set out earlier in these reasons was not made out.
We would finally observe that, in our view, it was precipitate for the applicants to bring these appeals under O 63A, in circumstances where these matters should have been dealt with in some other way. If the solicitors for the applicants wish to have specific details identified, either from the CD‑ROMs or from the schedules, a request for particulars would, no doubt, assist. To have brought these applications to the Full Court at this stage of the proceedings was, in our view, unnecessary.
For these reasons we concluded that leave to appeal should be refused and that the applicants should pay the respondent's costs of the application to be taxed with a certificate for senior counsel.