Stancu v Barua (No 2) - [2022] VSC 739

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2021 03171

MIRCEA STANCU	Plaintiff
v
ATANU BARUA	1^st defendant
AND
SYBILLA JANE MARGIT DE URAY	2^nd defendant

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JUDGE:	Elliott J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 November 2022
DATE OF JUDGMENT:	25 November 2022
CASE MAY BE CITED AS:	Stancu v Barua (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 739

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PRACTICE AND PROCEDURE – Claims of equitable fraud, deceit or negligence – Discovery of tax-related documents sought – Relevance – Intended use – Complexity of inquiry – Tax consequences not readily ascertainable and quantifiable – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 29.08(2) – Civil Procedure Act 2010 (Vic), s 55 – Application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the plaintiff	S Bunce	Karolidis & Co
For the 1^st defendant	S Ahmed	Hanna Legal
For the 2^nd defendant	Dr M Sharpe	McKean Park

HIS HONOUR:

IntroductionA.

By a summons filed 15 November 2022, the second defendant, Sybilla Jane Margit de Uray (“de Uray”), seeks further discovery from the plaintiff, Mircea Stancu (“Stancu”), of “[a]ny taxation returns of [Stancu] and [n]otices of [a]ssessment from the Australian Taxation Office for the financial years ended 30 June 2017 and 30 June 2022” (“the Tax Documents”).[1] The details of this proceeding have been set out in broad terms in a judgment already delivered in relation to interlocutory relief sought by Stancu.[2] It is unnecessary to repeat those facts today.

Background B.

[1]Although not explicitly referred to in the application, de Uray in effect sought an order pursuant to r 29.08(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

[2]Stancu v Barua [2022] VSC 481, [4]-[14], [44], [49]-[63].

In broad terms, Stancu claims that he was the subject of a scam pursuant to which he handed over some $133,000.00 in the belief that he was investing in certain shares, including shares in the Tesla Corporation (“Tesla”). It was alleged that those moneys, or some of them, were misappropriated by the first defendant, Atanua Barua, or de Uray, or both. Stancu seeks not only the return of those moneys but the profits that he alleges he would have made; or more specifically, the value he alleges the Tesla shares would have had if the shares had been purchased as ordered.
By this application, de Uray effectively seeks to obtain the Tax Documents to make some form of assessment in relation to Stancu’s taxation position in the event that he is successful at trial in proving any loss.

Legal principles C.

The legal principles applicable to an order for particular discovery may be succinctly stated.
Rule 29.08(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) provides:
Where, at any stage of a proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Stancu v Barua (No 2)

Details

AGLC: Stancu v Barua (No 2) [2022] VSC 739
Case: [2022] VSC 739
Decision Date: 25 November 2022

CaseChat Overview and Summary

The proceedings in Stancu v Barua (No 2) involved the plaintiff, Stancu, seeking to amend her statement of claim to include claims of equitable fraud, deceit or negligence against the defendant, Barua. The plaintiff sought an order for Barua to discover certain tax-related documents, including those related to trusts, companies and bank accounts, as well as the intended use of those documents in the litigation. The matter was heard in the Supreme Court of Victoria. The central legal issue before the court was whether the plaintiff's proposed discovery application was appropriate and whether the tax-related documents were relevant and necessary for the proper determination of the matter.

The court examined the scope and complexity of the inquiry required to determine the relevance and admissibility of the tax-related documents, and whether the potential tax consequences were ascertainable and quantifiable. The court noted that the intended use of the documents was broad and that the tax consequences of the matters in dispute were not readily ascertainable or quantifiable. The court also considered the provisions of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 29.08(2) and the Civil Procedure Act 2010 (Vic), s 55, which set out the principles and criteria for discovery of documents. The court concluded that the proposed discovery application was not appropriate, as the potential tax consequences were not ascertainable or quantifiable, and the scope of the inquiry was broad and complex.

The court dismissed the plaintiff's application for an order for discovery of tax-related documents. The court found that the plaintiff had not satisfied the criteria for such an order, and that the potential tax consequences were not readily ascertainable or quantifiable. The court emphasised the importance of ensuring that discovery applications are appropriate and necessary for the proper determination of the matter, and that the scope and complexity of the inquiry are manageable. The court also noted the potential for significant costs and delay in such proceedings, and the need to avoid unnecessary burden on the parties and the court. This decision highlights the need for careful consideration of the principles and criteria for discovery of documents, and the importance of ensuring that such applications are appropriate and necessary for the proper determination of the matter.

Orders