Sportingbet Australia Pty Ltd v K & S Corporation Ltd & Ors No. Scciv-02-614

SPORTINGBET AUSTRALIA PTY LTD (ACN 092 468 883) v
K & S CORPORATION LTD (ACN 007 581 837) AND
K & S GROUP PTY LTD (ACN 007 633 650) AND
DENNIS CRAIG TELFORD
[2003] SASC 244
Civil

BESANKO J: This action by the plaintiffs against the first defendant, Sportingbet Australia Pty Ltd (“Sportingbet”) resulted in a judgment in favour of the plaintiffs on 1 April 2003. The judgment is in the following terms:
“Declared that
1.The first defendant (appellant), as at 15 April 2002, held the sum of $3,000,000 on trust for the first plaintiff (first respondent);
Ordered that
2.Mr Franco Camatta and Mr Victor Daminato, as signatories to the joint account of the first defendant (appellant) and the first plaintiff (first respondent) with Bendigo Bank Limited (account no. 116777996) immediately cause the balance of that account to be paid to the first plaintiff (first respondent);
3.The first defendant (appellant) pay to the first plaintiff (first respondent) interest, at the rates set out in the Third Schedule to the Supreme Court Rules, upon the sum of $2,680,000 (being the amount referred to in the declaration above less the amount of $320,000 already paid to the first plaintiff (first respondent) from 15 April 2002 to 14 May 2002 (the date the sum was placed into the joint account of the first defendant (appellant) and the first plaintiff (first respondent) with Bendigo Bank Limited); such interest amounting to $12,775.90;
4. The first defendant pay the plaintiff’s costs as agreed or to be taxed.”
My reasons for judgment were delivered on 28 March 2003 (K & S Corporation Ltd & Anor v Sportingbet Australia Pty Ltd [2003] SASC 96).
Sportingbet has appealed to the Full Court of this Court against the judgment pursuant to s 50 of the Supreme Court Act 1935. The procedure for an appeal to the Full Court is contained in r 95 of the Supreme Court Rules 1987.
The Amended Notice of Appeal filed by Sportingbet contains two grounds which are in the following terms:
“5.The first respondent and the second respondent and each of them have breached their obligations of discovery and thereby deprived the appellant of a fair trial whereof the appeal should be allowed and a new trial ordered;
5.1 in particular the first respondent and/or second respondent failed to discover documents;
5.1.1copies of which were released to the police in relation to the criminal prosecution of the third respondent;
5.1.2relating to recovery of assets already obtained from the third respondent and his wife;
5.1.3 relating to proceedings 547 of 2002;
5.2 the appellant will provide further particulars prior to the hearing of the appeal by affidavit;
6.The first respondent and the second respondent and each of them have breached their obligations in equity to provide details of the recoveries made against the third respondent to the appellant whereof the appeal should be allowed;”
Sportingbet asserts that the plaintiffs did not provide all relevant documents and details of recoveries to it prior to the hearing of the action and, in particular, for the purposes of the present applications, that the plaintiffs breached their obligation under the Rules of Court to make proper discovery of documents. It is common ground that the action was governed by the obligation to make discovery contained in r 58A of the Supreme Court Rules 1987. Under that Rule, the plaintiffs were required to discover only “the documents which are or have been in their possession, custody or power which are directly relevant to any issue arising on the pleadings” (r 58A.03). Sportingbet asserts that the plaintiffs did not comply with that obligation in that there were a number of directly relevant documents which were not discovered. The documents which Sportingbet says were not discovered relate principally to the plaintiffs’ system of checks and balances in relation to the payment of monies by the plaintiffs to third parties.
Sportingbet does not have the documents which it says the plaintiffs should have discovered. It puts forward evidence by affidavit which it says establishes that the documents exist either in the hands of the plaintiffs or in the hands of various third parties.
Sportingbet issued two applications seeking various orders, namely, an Application for Specific Directions dated 20 June 2003 (Document No 49) and a Notice for Specific Directions dated 15 July 2003 (Document No 55). Sportingbet filed and served various affidavits in support of its applications. The applications were listed before me. My immediate concern was to identify the source of the power to make the orders sought by Sportingbet and to determine whether a single Judge or the Full Court was the appropriate Court to consider whether the orders should be made. After all, the action before me had resulted in a judgment and there was no application made by the appellant to set aside the judgment. There were a number of hearings before Sportingbet made clear its submission that a single Judge could make the orders it sought either under r 95.12 or the inherent jurisdiction of the Court. At an early stage, Sportingbet raised a question as to whether I should hear the applications bearing in mind that I had been the trial Judge. I specifically raised that issue with counsel for Sportingbet on 31 July 2003 and he said Sportingbet did not ask me to disqualify myself for apparent bias, although he submitted that it would be preferable if another Judge heard the applications.
Rule 95.12 of the Rules provides:
“95.12 In any proceeding pending before the Full Court, or about to be brought before the Full Court, any order or direction incidental thereto, not involving the decision of the proceeding, or of the proceeding about to be brought before the Full Court, may be made or given by the Court, but every such order or direction may be discharged or varied by the Full Court.”
On 31 July 2003 I heard argument on three issues, namely:
1. Did the words, “the Court” in r 95.12 include a single Judge of the Court?
2.Were the orders Sportingbet sought, orders or directions of a type within the terms of r 95.12?
3.Insofar as the second question may depend on the matters which must be established before the orders are made, what test or tests applied to the question of whether the orders are made?
It is unnecessary to set out the orders in the applications because on 31 July 2003 Sportingbet said it sought only the following orders:
1.An order for the issue of a subpoena against Deloitte Touche Tohmatsu to produce the evidentiary material identified in the draft subpoena exhibit “FC6” to the affidavit of Franco Camatta sworn on 15 July 2003.
2.An order for the issue of a subpoena against KPMG Adelaide to produce the evidentiary material identified in the draft subpoena exhibit “FC6” to the affidavit of Franco Camatta sworn on 15 July 2003.
3.An order for the issue of a subpoena against Paul John Laurence Rofe in his capacity as Director of Public Prosecutions, South Australia, to produce the evidentiary material identified in Exhibit “FC6” to the affidavit of Franco Camatta sworn on 21 July 2003.
I will refer to these three orders as “the orders”.
I mention at this point that Sportingbet submitted that the above orders could be made under the inherent jurisdiction of the Court. Sportingbet referred to various authorities. I have considered those authorities. Assuming orders are necessary (see below) I am not satisfied that in the present circumstances (ie an appeal is pending before the Full Court) a single Judge may exercise the inherent jurisdiction of the Court or that it would be appropriate for a single Judge to do so.
It was common ground between the parties that the words “the Court” in r 95.12 include a single Judge of the Court. I think that is right (see r 5 and the definition of “the Court” which includes a Judge of the Court) particularly in view of the fact that elsewhere in r 95.12 the words, “the Full Court” are used.
The plaintiffs submitted that before I considered the application for the orders under r 95.12, Sportingbet should be required to elect to proceed once and for all before a single Judge and if they did not so elect I should dismiss the application leaving Sportingbet to make an application to the Full Court, if so advised. Not surprisingly perhaps, Sportingbet was not prepared to make an election to proceed once and for all before me in the sense of undertaking, if unsuccessful before me, not to make the same application to the Full Court.
Sportingbet identified s 35 of the Supreme Court Act 1935 as the source of the power to make the orders. That section provides as follows:
35.(1)The court may, on the application of a party to proceedings or on its own initiative, issue a subpoena requiring a person to appear before the court at a specified time and place to give evidence or to produce evidentiary material (or both).
(2) A subpoena to produce evidentiary material may, instead of providing for production of the material before the court, provide for production of the material to an officer of the court nominated in the subpoena.
(3) If—
(a) a person fails to comply with a subpoena under subsection (1); or
(b) there are grounds for believing that, if such a subpoena were issued, a person would not comply with it,
the court may issue a warrant to have the person arrested and brought before the court.”
The plaintiffs submitted that under r 81 of the Rules of Court there is no need for a party to an action to obtain an order of the Court before a subpoena is issued. A subpoena is issued out of the Registry of the Court. Leaving aside some particular situations not relevant in the circumstances of this case (rr 81.02 and 81.04) that proposition appears to be correct. The plaintiffs did not dispute that if necessary the Full Court could always direct that certain subpoenas be issued. I did not hear full argument on this point and I do not propose to decide it in view of my conclusion on other grounds that the orders should not be made.
There is a clear dispute between the parties as to the matters Sportingbet must establish before any orders requiring the production of documents are made at this stage. Sportingbet submitted that it is sufficient if it is established that documents are required for a legitimate forensic purpose. On the other hand, the plaintiffs submitted that Sportingbet must establish that there had been no lack of reasonable diligence on its part and that the relevant documents, if available to Sportingbet, would have made a difference to the outcome of the trial of the action. I was referred generally to the matters identified by the High Court in Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 141 – 142. The plaintiffs’ submission seems to go so far as to require Sportingbet to make good ground 5 of the Amended Notice of Appeal before the orders are made. It is not necessary for me to decide if the plaintiffs’ submission is correct. I think before any orders are made at this stage of the action, the Court must have at least reached a certain level of satisfaction that the relevant ground of appeal is arguable. It is unnecessary for me to decide if the level of satisfaction is properly described as a prima facie case, or seriously arguable or in some other way.
I was not referred to any authority on r 95.12 and so far as I am aware there is none. In my opinion, an order which may only be made if the Court must reach a level of satisfaction that a ground of appeal is arguable is not an order “incidental” to a proceeding pending before the Full Court and “not involving the decision of the proceeding”. In my opinion if the orders are necessary, they are not orders which may be made by a single Judge of the Court under r 95.12.
Even if I am wrong in reaching this conclusion, I would not in the exercise of the discretion which I think I have under r 95.12, make the orders sought. I think I have a discretion because the words “the Court” includes the Full Court or a single Judge. I would exercise the discretion against determining the application for the orders for two reasons which are related to each other. First, the application for the orders and the issues it raises give rise to a number of novel points not previously considered by the Court. Secondly, it is apparent from the submissions made by the parties that whatever decision I make, the unsuccessful party will challenge my decision in the Full Court. Sportingbet, if unsuccessful, will either appeal from my decision or will make the same application to the Full Court. The plaintiffs, if unsuccessful, will apply to the Full Court under r 95.12 for any orders to be discharged.
In all the circumstances, I dismiss the applications. I will hear the parties as to costs.

[2003] SASC 244

6 August 2003