Soyza v Adolphus
[2007] VSC 549
•20 December 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 9137 of 2007
| ELIYADURA THILAK NANDANA SOYZA and SUZETTE SOYZA | Plaintiffs |
| v | |
| BARBARA ADOLPHUS | Defendant |
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JUDGE: | Lasry J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 December 2007 | |
DATE OF RULING: | 20 December 2007 | |
CASE MAY BE CITED AS: | Soyza & Anor v Adolphus | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 549 | |
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PRELIMINARY DISCOVERY – Rule 32.05 of the Supreme Court (General Civil Procedure) Rules 2005 – Fraud – Principle of finality – Proceedings completed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C B Thomson | Challenge Legal |
| For the Defendant | Mr M McNamara | Ferraro & Company Pty Ltd |
TABLE OF CONTENTS
Background......................................................................................................................................... 2
County Court Proceedings............................................................................................................... 2
Court of Appeal and Terms of Settlement.................................................................................... 4
Preliminary Discovery....................................................................................................................... 5
Order 32................................................................................................................................................ 7
Fresh Evidence?.................................................................................................................................. 8
Conclusion......................................................................................................................................... 12
HIS HONOUR:
Background
This is another step in most unfortunate litigation between members of the same family which commenced with certain events in 2002. The defendant, Mrs Barbara Adolphus, is the mother of the second-named plaintiff, Mrs Suzette Soyza. On 30 October 2007, the plaintiffs – being Mrs Soyza and her husband – filed an Originating Motion and Summons for preliminary discovery seeking the following relief:
1.An order that the defendant produce to the plaintiffs at such time and place as shall be determined by the Court any document or thing in her possession, custody or power relating to and or evidencing the receipt by her of an Age Pension or other payment under the provisions of the Social Security Act 1991 (Commonwealth) between the dates 21 September 2002 to the date of the making of the order by the Court.
2.The order is sought against the defendant pursuant to r 32.05 of the Supreme Court Rules in order to determine whether the plaintiffs have a potential causes [sic] of action against the defendant as follows:
(a) To seek leave to appeal against the judgment of His Honour Judge Shelton of the County Court given 28 February 2006 on the basis that the judgment was obtained as a consequence of false evidence given by the defendant;
(b) To set aside Terms of Settlement entered into between the plaintiffs and the defendant dated 20 June 2007 on the basis that the terms of settlement are founded upon the said judgment of His Honour Judge Shelton.
Unusually, these orders were sought not in respect of prospective litigation, but in respect of litigation between the parties which had already been finalised. The Originating Motion and Summons came before Master Daly on 14 and 28 November 2007, who dismissed the plaintiffs’ application with costs. The plaintiffs filed a Notice of Appeal from Master Daly’s orders on 30 November 2007 and with what can only be described as remarkable expedition the matter came before me via the Practice Court.
County Court Proceedings
On 16 September 2004 the present defendant, as well as Mr Anton Adolphus, brought proceedings in the County Court against the present plaintiffs. The Statement of Claim referred to various dealings with a property at 15 Cilento Crescent, Lynbrook, including a claimed sale of an undefined interest in the property, improvements to the property, and the claimed repayment of certain sums of money. The plaintiffs’ claim was for monies had and received and for monies lent. Those proceedings came before his Honour Judge Shelton in October and November 2005 and his Honour delivered judgment in the matter on 28 February 2006. The detail of the dispute between the parties is described in that judgment, which was exhibited to the affidavit material before me.
Mrs Adolphus is married to Mr Anton Adolphus who is incapacitated by a stroke and, as his Honour Judge Shelton noted in his judgment, she holds an enduring Power of Attorney from him. Mr and Mrs Adolphus are the parents of Mrs Soyza (who was the second-named defendant in that action) and the parents-in-law of Mr Soyza.
Relevant to these proceedings was the fact that on 21 September 2002, the sum of $407,041.60 was won in Tattslotto by the holders of a card in the names of “Mrs B. M. Adolphus, Suzette, Damien and Debbie”. Damien is the son of Anton and Barbara Adolphus, and Debbie is his wife. After this occurred there were a series of payments made between the parties, although primarily by Mrs Adolphus to members of her family. A dispute over the nature of these payments (whether they were gifts or otherwise) and their precise effect is what led to the proceedings before his Honour Judge Shelton.
The details of those matters are set out in the judgment of Judge Shelton and it is clear that one of the issues that arose before his Honour was whether or not Mrs Adolphus was the sole beneficiary in the Tattslotto win. His Honour concluded that she was. Having dealt with that issue, his Honour’s analysis of the evidence was that the sum of $11,000.00 was owed by Mr Soyza to Mrs Adolphus and that the sum of $70,000.00 was owed by Mrs Soyza to Mrs Adolphus.
Court of Appeal and Terms of Settlement
Mr and Mrs Soyza then filed a Notice of Appeal to the Court of Appeal on 5 February 2007.
The appeal required an application for leave which the Court of Appeal granted on 6 February 2007, with the Notice of Appeal being filed thereafter. On 20 June 2007 interlocutory applications were listed for hearing before the Court of Appeal and during the course of the proceedings observations were made by the learned President indicating a potential difficulty with ground of appeal number 7. That ground of appeal sought to persuade the Court of Appeal that the learned trial judge’s findings that the plaintiff, Mrs Adolphus, had won the Tattslotto prize in her own name and not in the name of a syndicate, and that she did not gift to Mr Soyza certain sums of money, were findings which were against the evidence and the weight of the evidence. I am informed that the President reminded the parties of the difficulties of challenging findings of fact made by a trial judge based on his assessment of the credit of witnesses.
As a result of the President’s comments, discussions occurred between the parties which led to terms of settlement being entered into and the appeal did not proceed. The terms of settlement were as follows:
1.The Appellants shall pay the Respondents $100,000 as follows:
(a)$10,000 on or before 20 July 2007
(b)$10,000 on or before 20 August 2007
(c)$30,000 on or before 20 December 2007
(d)$50,000 on or before 19 December 2008
2.Each of the payments to be made by bank cheque, or bank transfer or as agreed to Barbara Adolphus, care of Ferraro & Co, 27A Sun Crescent, Sunshine.
3.In default of payment of the $100,000 the Respondents shall be entitled to enter judgment in the County Court proceedings for $100,000 less any payments made together with costs and the Appellants irrevocably consent to the entry of judgment and consent to production of these terms as their consent and judgment in substitution of the judgment in the County Court proceedings.
4.Further, in the event of default of payment the Appellants charge their property at 15 Cilento Drive, Lynbrook more particularly described in Certificate of Title Volume 10648 Folio 878 or subsequent principal property with payment of any outstanding sum and grant a power of sale should the payment remain in default and agree a caveat be lodged over the property, upon default.
5.Upon payment of $100,000 the parties completely release each other from all things in relation to and in connection with the subject matter of the County Court proceedings.
6.The parties agree that the Appeal and applications before the Court of Appeal this day be dismissed with no order as to costs.
Those terms of settlement were dated 20 June 2007 and were signed by all parties.
Preliminary Discovery
The Originating Motion and Summons for preliminary discovery arises because the first-named plaintiff, Mr Soyza, has deposed before the Master and before me that he has made general enquiries with Centrelink as to the effect of a “windfall” in a sum exceeding $400,000.00 on an age pension. In his affidavit in support of the Originating Motion, Mr Soyza deposes that:
· One of the primary issues in dispute in the County Court proceedings was the ownership of the Tattslotto amount of $407,041.60, and that payment made to his wife was more than payment of her share of the winnings.
· The present defendant was, at the time of the lottery win, and continues to be, in receipt of an age pension. This was the subject of evidence during the County Court proceedings to which the first-named plaintiff refers in his affidavit (I will refer to this in more detail shortly).
· The first-named plaintiff has made enquiries with Centrelink and has been told that such a lottery win would have an adverse effect on age pension payments, particularly if the present defendant had informed Centrelink that the winnings were all hers (as she said in evidence during the County Court proceedings).
According to the first-named plaintiff, the information he seeks is likely to demonstrate that the present defendant made statements to Centrelink which were contrary to the evidence given in the County Court and, it is submitted, reveal that she has perjured herself in those proceedings. However, as will become significant below, the timing of these enquiries is not the subject of any evidence before the Master or before me.
The first-named plaintiff also deposes that he is informed by both Centrelink and his solicitor that if the defendant had in fact stated to Centrelink that the Tattslotto winnings were fully hers (as she gave in evidence in the County Court proceedings), there would have been an adverse impact on her pension. The only reason, it is contended, that there would be no adverse impact would be if she had, prior to giving evidence in court, made statements to Centrelink regarding the Tattslotto moneys contrary to the evidence she had given in court.
In addition, reliance is placed on the correspondence between the solicitors , after the solicitors for the plaintiffs determined to request discovery from the solicitors for the defendant. Those letters are also exhibited to the first-named plaintiff’s affidavit.
Mr Thomson of counsel for the plaintiffs submits that it is relevant that the correspondence from the solicitor for the defendant suggests there is some form of ongoing investigation into her arrangements with Centrelink.
Therefore, the plaintiffs contend, it is possible by an order under Rule 32.05 to obtain information which would demonstrate that when Mrs Adolphus gave evidence before Judge Shelton she committed perjury, and on that evidence the appeal against his Honour’s judgment could be re‑established with significantly improved prospects of success.
Thus orders were sought for preliminary discovery. That application was dismissed by the Master on 28 November 2007 and costs were ordered to be paid by the plaintiffs.
This being an appeal pursuant to Rule 77.05 of the Supreme Court (General Civil Procedure) Rules 2005, the appeal has proceeded by way of hearing de novo.
Order 32
Order 32 of the Supreme Court (General Civil Procedure) Rules 2005 provides for preliminary discovery and discovery from a non-party. Rule 32.05 (“Discovery from a prospective defendant”) states that:
Where –
(a)there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description the applicant has ascertained;
(b)after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain that relief; and
(c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had in that person’s possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision –
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).
I am not at all sure that Rule 32.05 is available for the purpose for which the plaintiffs wish to use it. The purpose of the Rule is to provide a prospective plaintiff with information about whether the cause of action against the prospective defendant is a good cause of action and to make an informed decision on that question before a proceeding has commenced. The principles applying to such an application are well established.[1] I remain to be convinced that this rule is available for the purpose of re-opening litigation between the parties where the issue which the subject of the proposed discovery was the subject of contention in those proceedings.
[1]See Plzen v P & O Wharf Management Pty Ltd [2007] VSC 318 (per Habersberger J); Schmidt v Won [1993] 3 VR 435 at 445.
But whether or not that is so, there is the principle of finality to be considered. That principle is expressed, for example, by the High Court in D’Orta-Ekenaike v Victoria Legal Aid[2] in the following terms:
A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances. That tenet finds reflection in the restriction upon the reopening of final orders after entry and in the rules concerning the bringing of an action to set aside a final judgment on the ground that it was procured by fraud. The tenet also finds reflection in the doctrines of res judicata and issue estoppel. Those doctrines prevent a party to a proceeding raising, in a new proceeding against a party to the original proceeding, a cause of action or issue that was finally decided in the original proceeding. It is a tenet that underpins the extension of principles of preclusion to some circumstances where the issues raised in the later proceeding could have been raised in an earlier proceeding.[3]
[2](2006) 223 CLR 1.
[3]Ibid at 17 (per Gleeson CJ, Gummow, Hayne and Heydon JJ).
Unlike any of the cases that were cited to me in argument, this is a situation where the plaintiff seeks discovery under Rule 32.05 in circumstances where the purpose of the procedure would be to elicit further evidence in relation to re-opening a proceeding which has been finalised. Here, there was a trial in the County Court, a judgment from that Court, an appeal, and then a settlement of the proceedings before the appeal had been fully argued and a judgment given.
As the defendant submits, “[a]t the heart of the plaintiffs’ application is a belief that the defendant gave ‘false evidence’ at the trial in the County Court.”[4] The plaintiffs now wish to be able to submit to the Court of Appeal that their application should succeed because they would have fresh evidence to indicate that what the defendant said during proceedings about what she told Centrelink was perjured evidence.
[4]Outline of Defendant’s Submission, at [3].
Fresh Evidence?
The fundamental basis for the plaintiffs’ attempt to obtain discovery to revive the appeal in this matter is that the present defendant committed perjury when she gave evidence in the County Court. As the defendant submits, it is only possible to impugn a judgment in those circumstances with fresh evidence which was not available at the time and could not have been discovered with reasonable diligence before the judgement was delivered. Assuming that the procedure under Rule 32.05 is available for the purpose of discovering material which would add verisimilitude to an attempt to re-open the application in the Court of Appeal, I am not all satisfied that any evidence discovered would come within the acceptable category of fresh evidence. As the Federal Court of Australia held in Monroe Schneider Associates (Inc) & Anor v No 1 Raberem Pty Ltd & Ors:[5]
The jurisdiction of the court to set aside an earlier judgment for fraud will be exercised only where a party is able to prove the fraud by evidence which:
(a) is newly discovered since the trial;
(b) could not have been found at the time of the trial by exercise of due diligence;
(c)is so material that its production a trial would probably have affected the outcome;
(d)where the fraud consists of perjury, is so strong that it would reasonably be expected to be decisive at a rehearing and if unanswered must have that result.[6]
[5](1992) 37 FCR 234 (hereinafter “Monroe”).
[6]Ibid at 234.
Other authorities to which I was referred highlight the extremely high burden carried by the party to proceedings who would now wish to impugn the outcome in the way the present plaintiffs do. In Monroe, the Federal Court also said:
upon an appeal seeking an order for a new trial on the ground of fresh evidence an appellant must discharge a heavier burden. The terms in which this has been defined have varied. On one view the appellant must show that upon such evidence in all probability, or almost certainly and opposite result would have been reached.[7]
[7](1992) 37 FCR 234 at 237.
The Court in Monroe then quoted from Wollongong Corporation v Cowan,[8] where the Court stated:
If cases are put aside where a trial has miscarried through misdirection, misreception of evidence, wrongful rejection of evidence or other error and if cases of surprise, malpractice or fraud are put on one side, it is essential to give effect to the rule that the verdict, regularly obtained, must not be disturbed without some insistent demand of justice. The discovery of fresh evidence in such circumstances could rarely, if ever, be a ground for a new trial unless certain well-known conditions are fulfilled. It must be reasonably clear that if the evidence had been available at the first trial and had been adduced, an opposite result would have been produced, or if it is not reasonably clear that it would have been produced, it must have been so highly likely as to make it unreasonable to suppose the contrary.[9]
[8](1955) 93 CLR 435.
[9]Ibid at 444 (per Dixon CJ, Williams, Webb, Kitto and Taylor JJ).
In Commonwealth Bank v Quade,[10] the High Court referred to these authorities as establishing that
the successful party should be deprived of the verdict in his favour only if the unsuccessfully party persuades the appellate court that there was no lack of reasonable diligence on his part and that it is reasonably clear that the fresh evidence would have produced an opposite verdict.[11]
Their Honours described this as a “stringent rule”.
[10](1991) 102 ALR 487.
[11]Ibid at 490 (per Mason CJ, Deane, Dawson, Toohey and Gaudron JJ).
In Wentworth v Rogers (No. 5),[12] Kirby P stated:
It is useful to state a number of principles which are established by law and which govern proceedings of the kind which the appellant wishes to bring. …
Secondly, it must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment. … It is based upon a number of grounds. There is a public interest in finality of litigation. Parties ought not, by proceeding to impugn a judgment, to be permitted to relitigate matters which were the subject of the earlier proceedings which gave rise to the judgment. Especially should they not be so permitted, if they move on nothing more than the evidence upon which they have previously failed. If they have evidence of fraud which may taint a judgment of the courts, they should not collude in such a consequence by refraining from raising their objection at the trial, thereby keeping the complaint in reserve. It is their responsibility to ensure that the taint of fraud is avoided and the integrity of the court’s process is preserved.
Thirdly, mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief … The claimant must establish that the new fact s are so evidenced and so material that it is reasonably probable that the action will succeed. This rule is founded squarely in the public interest in finality of public litigation and in upholding judgments duly entered at the termination of proceedings in the courts.
Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof, of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment … The other requirements must be fulfilled. In hard fought litigation, it is not at all uncommon for there to be a conflict of testimony which has to be resolved by a judge or jury. In many cases of contradictory evidence, one party must be mistaken. He or she may even be deceiving the court. The unsuccessful party in the litigation will often consider that failure in the litigation has been procured by false evidence on the part of the opponent and the witnesses called by the opponent. If every case in which such an opinion was held gave rise to proceedings of this kind, the courts would be even more burdened with the review of first instance decisions than they are. For this reason, and in defence of finality of judgments, a more stringent requirement than alleged perjury alone is required.[13]
[12](1986) 6 NSWLR 534.
[13]Ibid at 538-9 (per Kirby P).
With those principles in mind, the following matters seem to me to mitigate strongly against allowing this appeal. The issue of the “ownership” of the Tattslotto proceeds was an issue in the County Court proceedings which the trial judge resolved in favour of the present defendant. In those proceedings, the present plaintiffs’ had pursued the Tattslotto issue by the use of subpoenas, cross-examination and final submissions, as appears in the transcript of the proceedings to which I have been referred. However, documents of the present defendant which bore upon her relationship with Centrelink after her Tattslotto win were not called for during the proceedings. The plaintiff has deposed as to the fact that enquiries have been made with Centrelink about the effect of a substantial lottery win but the timing of those enquiries is not revealed. I therefore cannot say whether the result of those enquiries was or was not known at the time the parties entered into the terms of settlement at the conclusion of the application to the Court of Appeal.
Mr Soyza further deposes that he is “… unable to comment directly as to why discovery of the Centrelink file had not been pursued in the County Court proceeding except to say that the case as pleaded was quite different to the case as it ran at trial where determination by the court as to ownership of the Tattslotto winnings became very important”.[14] Mrs Adolphus was cross-examined about her Tattslotto winnings during the trial. I was referred to some fifteen pages[15] of
cross-examination which included references to the fact that she was on a pension; that she was trying to not inform Centrelink about the Tattslotto money; and that she put the money into an account which was not one Centrelink had access to. It was put to her that she did not disclose to Centrelink that she had won Tattslotto, telling them about it when she attended a meeting.
[14]Affidavit in Reply of Eliyadura Thilak Nandana Soyza, sworn 26 November 2007, at [8(d)].
[15]Transcript of Proceedings, Adolphus & Anor v Soyza & Anor (County Court, Judge Shelton, 27 October 2005) commencing at 45.
Curiously, it would appear that counsel then representing Mr and Mrs Soyza did not make the submission to the learned trial judge which was open to him to make that since Mrs Adolphus’ age pension had not changed after the Tattslotto win she must have told Centrelink the Tattslotto winnings were not all hers.
Despite the attention being paid to the lottery winnings and the pension that Mrs Adolphus continued to receive during the trial, Mr. Thomson for the plaintiffs, who did not appear in those proceedings, was unable to assist me as to whether consideration had been given to obtaining the actual documents relevant to that issue. As he was instructed, the dispute was, on the pleadings, primarily about the property and the issue about Tattslotto winnings came on suddenly.
Finally, it is not clear to me what the documents sought in the Endorsement of Claim in the Originating Motion would reveal. Paragraph 1 seeks:
… any document or thing in her possession, custody or power relating to and or evidencing the receipt by her of an Age Pension or other payment under the provisions of the Social Security Act 1991 (Commonwealth) between the dates 21 September 2002 to the date of the making of the order by the Court.
Bearing in mind the use to which the plaintiffs wish to put the material, such a result might only be able to be achieved if some record of conversations with the defendant and Centrelink officials were able to be obtained which had the potential to demonstrate the perjury the plaintiffs contend for.
Conclusion
This application under Rule 32.05 does not involve seeking discovery for the purpose of commencing proceedings. Indeed, we are at the other end of the “litigation cycle” and I consider that on the question of discretion that is significant. In my opinion, assuming the process under Rule 35.02 is in fact available for the purpose for which the plaintiffs wish to use it, it is here sought to be implemented for the purpose of endeavouring to re-litigate an issue which had arisen in the County Court proceedings which had been completed and resolved by terms of settlement on appeal. I consider that to exercise a discretion in favour of such a process in these circumstances would be wholly exceptional given the principle of finality. The minimum standard the plaintiffs would need to reach in order to succeed would be to demonstrate that the material sought would be likely to fall within a category of information which would comply with the principles concerning fresh evidence. Even on the assumption that material could be discovered which would enable the defendant’s evidence to be more effectively impugned so as to affect the outcome (and I consider that is very much in doubt), in my view this is almost certainly not material which is newly discovered since the trial. Further, the enquiries could have been made at the time of trial by the exercise of due diligence.
The appeal is therefore dismissed.
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