Timeless Sunrise Pty Ltd v BigJ Enterprises Pty Ltd (No 7) [2022] VSC 549
[2022] VSC 549
•15 September 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2019 04430
| TIMELESS SUNRISE PTY LTD (ACN 126 299 634) as trustee for DAVINA FAMILY TRUST & ORS (according to the attached schedule of parties) | Plaintiffs |
| v | |
| BIGJ ENTERPRISES PTY LTD (ACN 084 199 084) as trustee for JASON BRANDI FAMILY TRUST & ORS (according to the attached schedule of parties) | Defendants |
S ECI 2020 01675
| TANIA BRANDI | Plaintiff |
| v | |
| DAVID BRANDI | Defendant |
S ECI 2020 04804
| DAVID BRANDI | Plaintiff |
| v | |
| JASON BRANDI | Defendant |
S ECI 2021 04644
| DAVID BRANDI | First Plaintiff |
| TINA BRANDI | Second Plaintiff |
| v | |
| ZIGAROO PTY LTD (ADMINISTRATORS APPOINTED) (ACN 006 005 401) AS TRUSTEE FOR MK NO.13 TRUST | Defendant |
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JUDGE: | DELANY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | At trial, 5-6 September 2022 |
DATE OF RULING: | 15 September 2022 |
CASE MAY BE CITED AS: | Timeless Sunrise Pty Ltd v BigJ Enterprises Pty Ltd (No 7) [2022] VSC 549 |
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PRACTICE AND PROCEDURE – Evidence – Privilege against self-incrimination – Civil trial – Witness claiming the privilege a party – Schedule of matters to which objection taken together with 108 alleged forgeries – Whether reasonable grounds for the objection as to specific matters and alleged forgeries – One existing criminal charge outstanding against the witness – Whether the interests of justice require that the witness give the evidence – Principles to be applied – Onus of proof – Evidence Act 2008 (Cth), s 128(2) and 128(4)(b) – Gedeon v Queen (2013) 280 FLR 275; Villan v State of Victoria [2021] VSC 354; Roberts-Smith v Fairfax Media Publications Pty Ltd (No 28) [2022] FCA 115; Cureton v Blackshaw Services Pty Ltd [2002] NSWCA 187, applied – Deputy Commissioner of Taxation v Shi (2021) 392 ALR 1; Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412, referred to.
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S ECI 2019 04430
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs by Original Proceeding and First Defendant by Counterclaim | Mr J Graham KC with Mr S Clement and Ms Z Anderson | Frenkel Partners |
| For the First to Third Defendants by Original Proceeding and Plaintiffs by Counterclaim | Mr D Bongiorno with Mr L Molesworth | Strongman & Crouch |
| For the Fourth Defendant by Original Proceeding | No appearance at trial | |
| For the Second Defendant by Counterclaim | Mr P Miller | Madison Marcus |
S ECI 2020 01675
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff by Original Proceeding and First Defendant by Counterclaim | Mr D Bongiorno with Mr L Molesworth | Strongman & Crouch |
| For the Defendant by Original Proceeding and Plaintiff by Counterclaim | Mr J Graham KC with Mr S Clement and Ms Z Anderson | Frenkel Partners |
S ECI 2020 04804
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Graham KC with Mr S Clement and Ms Z Anderson | Frenkel Partners |
| For the Defendant | Mr D Bongiorno with Mr L Molesworth | Strongman & Crouch |
S ECI 2021 04644
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr P Miller | Madison Marcus |
| For the Defendant | No appearance at trial | Aitken Partners |
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TABLE OF CONTENTS
Background......................................................................................................................................... 1
The scope of the objections.............................................................................................................. 7
Section 128 and the issues in dispute............................................................................................. 8
Relevant provisions of the Evidence Act 2008 (Vic).................................................................. 11
Section 128(2): The Onus and ‘reasonable grounds’................................................................. 12
Offences under Australian Law and Civil Penalty Provisions............................................... 16
Crimes Act 1958 (Vic)................................................................................................................... 16
Criminal CodeAct 1995 (Cth)...................................................................................................... 19
Taxation Administration Act 1997 (Vic)...................................................................................... 20
Corporations Act 2001 (Cth)......................................................................................................... 21
Section 128(4)(b): The onus........................................................................................................... 27
Section 128(4)(b): The ‘Interests of Justice’: The Authorities................................................ 28
Section 128(4)(b): The Principles.................................................................................................. 33
Section 128(1) and (2): Do Reasonable Grounds exist for the Objections?......................... 35
1.1 and 1.4(a) Atida Mortgage................................................................................................... 36
1.1CEG Loan.............................................................................................................................. 38
Other items in the Objection Schedule and item 1.6.............................................................. 39
Findings concerning s 128(2).......................................................................................................... 43
1.2 The Leaning Back Loan........................................................................................................ 44
1.3 Forged Signatures of Jason and Tina Brandi.................................................................... 44
1.4(b) Documents relating to the appointment of Erminio Brandi...................................... 45
1.4(c) ITM: Documents provided to liquidators and others and 1.5 ITM and Sputnik: Transfer of assets.................................................................................................................................... 46
1.6 The ANZ mortgage............................................................................................................... 48
Submissions of the Parties: Section 128(4)(b)............................................................................. 48
1.1 and 1.4(a): CEG Loan and Atida Mortgage...................................................................... 48
1.2 The Leaning Back Loan........................................................................................................ 51
1.3 Forged Signatures of Jason and Tina Brandi.................................................................... 51
1.4(b) Documents relating to the appointment of Erminio Brandi...................................... 54
1.4(c) ITM: Documents provided to liquidators and others................................................. 55
1.5 ITM and Sputnik: transfer of assets.................................................................................... 55
1.6 The ANZ mortgage............................................................................................................... 55
Credit Issues...................................................................................................................................... 56
Consideration: s 128(4)(b)............................................................................................................... 61
1.1: Atida mortgage.......................................................................................................................... 63
1.1 CEG......................................................................................................................................... 64
1.4(a) Dorsia Legal............................................................................................................................ 67
1.2 The Leaning Back Loan........................................................................................................ 67
1.3 Forged Signatures of Jason and Tina Brandi.................................................................... 68
Accounts of PDJ Crew Unit Trust for the 2015 and 2015 Financial Years................. 68
Other Forged Signatures: David’s Responsive Appendix B................................................. 69
Item 1.4(b) Documents relating to the appointment of Erminio Brandi............................... 74
Item 1.4(c) ITM: Documents provided to liquidators and others and 1.5 ITM and Sputnik: Transfer of assets........................................................................................................................................ 74
Item 1.6 ANZ Mortgage.................................................................................................................. 75
Disposition........................................................................................................................................ 76
HIS HONOUR:
Background
This ruling concerns objections foreshadowed to be taken by David Brandi to answering questions in cross-examination relying upon the privilege against self-incrimination provided for in s 128 of the Evidence Act 2008 (Vic) (‘Evidence Act’). David Brandi is the second plaintiff and the first defendant to the counterclaim in proceeding S ECI 2019 04430 (the ‘Timeless Sunrise proceeding’).
The Timeless Sunrise proceeding is being heard and determined together with three other proceedings: proceeding S ECI 2020 01675, proceeding S ECI 2020 04804 and proceeding S ECI 2021 04644 (the ‘Zigaroo proceeding’). Prior to trial, an order was made that evidence in each of the proceedings is evidence in the other. All four proceedings concern the Brandi family. This ruling assumes a familiarity with the proceedings and with earlier rulings. With no disrespect intended, I will refer to the parties by their given names.
On 24 August 2022, I delivered my ruling (‘split trial ruling’) on a split trial application by the plaintiffs in the Timeless Sunrise proceeding (‘the David Brandi parties’).[1] In accordance with that ruling, the first witness to give evidence at the trial was a solicitor, Michael Skerrett. Mr Skerrett was called by the defendants in the Timeless Sunrise proceeding (‘the Jason Brandi parties’). Mr Skerrett gave evidence on 25 August 2022 that what purported to be his signature on certain documents was not his signature. Those documents include:[2]
(a)a guarantee and indemnity purportedly entered into between Jason and David (as guarantors) and CEG Direct Securities Pty Ltd (‘CEG’) dated 30 May 2018. Mr Skerrett’s signature appears on the execution block as a witness to Jason’s signature;
(b)a power of attorney dated 30 May 2018 purportedly entered into by Jason (as grantor), with Mr Skerrett’s signature appearing on the witness component of the execution block;
(c)a representation by mortgagors form to CEG dated 30 May 2018, allegedly signed by Jason and Mr Skerrett;
(d)an agent certification form dated 30 May 2018; and
(e)Australian Legal Practitioner’s Certificates dated 30 May 2018 and 3 September 2018 to CEG and Atida Pty Ltd (‘Atida’), Perpetual Corporate Trust Limited (‘Perpetual’), Frilara Pty Ltd (‘Frilara’) and Fralara Pty Ltd (‘Fralara’), respectively.[3]
[1]Timeless Sunrise Pty Ltd v BigJ Enterprises Pty Ltd (No 3) [2022] VSC 499 (‘split trial ruling’).
[2]Transcript of Proceedings, Timeless Sunrise Pty Ltd (ACN 126 299 634) as trustee for Davina Family Trusts & Ors v BigJ Enterprises Pty Ltd (ACN 089 199 084) as trustee for Jason Brandi Family Trust & Ors (Supreme Court of Victoria, Delany J, 15 August 2022 – 8 September 2022) (‘Transcript’), 694-696.
[3]Ibid, 696.
Mr Skerrett was not cross-examined.
In accordance with my split trial ruling, the second witness to give evidence, also on behalf of the Jason Brandi parties, was handwriting expert, Melanie Holt. Ms Holt prepared two reports, the first dated 8 November 2021 and the second dated 31 August 2022, in relation to the alleged forgeries of Jason’s signature on over 100 documents and certain alleged forgeries of Tina’s signatures. Ms Holt gave evidence and was cross-examined on 1 September 2022.
Following the evidence of Mr Skerrett and Ms Holt, on the evening of Friday 2 September 2022 the David Brandi parties served proposed amended pleadings in the Timeless Sunrise proceeding. The Proposed Fourth Amended Statement of Claim dated 2 September 2022 (‘2 September 2022 4ASC’) abandoned certain key aspects of the David Brandi parties’ case. It also included proposed new claims against the Jason Brandi parties, notably an estoppel claim concerning the property at 9 Newsom Street, Ascot Vale (‘Newsom Street’) of which PDJ Crew Pty Ltd (‘PDJ Crew’) had been the registered proprietor prior to its sale.[4] Amendments were proposed by the David Brandi parties to the Reply to the Jason Brandi parties’ 2 September 2022 Second Further Amended Defence (‘2FAD’). Substantive amendments were also proposed by David on 2 September 2022 to David’s Defence (‘2 September 2022 Defence to 2AC’) to the Second Further Amended Counterclaim filed on 2 September 2022 (‘2AC’) (collectively, ‘the 2 September 2022 amendments’).
[4]2 September 2022 4ASC, [36A].
One of the claims abandoned by the 2 September 2022 4ASC was a previously pleaded allegation by Timeless Sunrise Pty Ltd (‘Timeless Sunrise’) as trustee of the Davina Family Trust that, as a result of documents dated 1 July 2014, Timeless Sunrise was entitled to a declaration that 50% of the units in the PDJ Crew Unit Trust were held on trust for the Davina Family Trust.[5] The David Brandi parties also abandoned a separate claim by Timeless Sunrise to be recognised as a unitholder in the JAG Group Unit Trust based on documents dated 1 July 2014.[6]
[5]Ibid, prayer for relief, [A(c)].
[6]Ibid, [69].
As accepted by senior counsel for the David Brandi parties, amendments made by the 2 September 2022 4ASC had the effect that Timeless Sunrise, being the first plaintiff in the Timeless Sunrise proceeding, no longer has a claim to relief in that proceeding.
David and his wife Tina are the plaintiffs in the Zigaroo proceeding. They are separately represented by solicitors and counsel in that proceeding. On Friday 2 September 2022, David and Tina also provided a proposed Further Amended Statement of Claim and proposed Amended Reply and Defence to Counterclaim in the Zigaroo proceeding (‘proposed Zigaroo amendments’).
One of the intended effects of the 2 September 2022 4ASC is to seek to remove allegations in the David Brandi parties’ Third Further Amended Statement of Claim dated 18 July 2022, to which forgery allegations were made in response by the Jason Brandi parties in their 2FAD. The same is the case in relation to the proposed Zigaroo amendments. To the extent that the pleadings filed on behalf of David and Tina in the Zigaroo proceeding previously relied upon specific documents or references to documents which the Jason Brandi parties allege to be or to contain forgeries, those allegations have been removed by David and Tina.
At the same time that notice was given of the 2 September 2022 amendments, notice was given by the David Brandi parties of substantive amendments to three witness statements of David filed in the Timeless Sunrise proceeding and to the witness statement filed by him in the Zigaroo proceeding. Those amendments to witness statements that had already been filed and served, and, at least in the case of David’s first witness statement, had been signed by him,[7] deleted large parts of the first witness statement dated 20 August 2021, parts of the second witness statement and part of David’s witness statement in the Zigaroo proceeding. On 5 September 2022 when the trial resumed, a further fifth witness statement of David was filed and served in the Zigaroo proceeding.
[7]Court Book, 384, 444. Transcript, 889, 895.
Tina filed two witness statements in the Timeless Sunrise proceeding prior to trial. On 2 September 2022, the Court was provided with an outline of proposed amendments to Tina’s witness statements dated 20 August 2021 and 23 December 2021. Tina’s amended witness statements appeared in the Third Supplementary Court Book on 4 September 2022. The amendments to those witness statements comprised a series of deletions so that the witness statements no longer seek to prove, or to otherwise address, allegations which are proposed to be deleted from the David Brandi parties’ pleadings in the Timeless Sunrise proceeding by the 2 September 2022 amendments. The deleted paragraphs include references to documents dated 1 July 2014 as identified in paragraph 7 above.
The developments in the conduct of the trial earlier mentioned, together with further developments regarding the David Brandi parties’ pleadings, provide important context for this ruling.
The occasion for the s 128 ruling arose in the following way. David commenced to give evidence on 5 September 2022. With some minor revisions, David adopted the five witness statements to which I have referred. Prior to David giving evidence, shortly before Court on 5 September 2022, a schedule of anticipated topics for objection relying upon s 128 and additional/anterior grounds for objection to cross-examination concerning those topics (‘the Objection Schedule’) was provided. Soon after David’s cross-examination had commenced, an objection based upon the privilege against self-incrimination was raised in relation to ASIC records concerning the directorship of Independent Tube Mills Pty Ltd (in liquidation) (‘ITM’). The objection was made in anticipation of cross-examination concerning ASIC records which record the appointment of David’s father, Erminio Brandi (‘Ernie’), as a director of ITM.
The first of many anticipated objections on the basis of privilege against self-incrimination having been taken, it was determined to hear argument in relation to the Objection Schedule and to determine whether or not to rule at that time, without further cross-examination of David, in relation to all or some of those objections.
Argument proceeded on 5 and 6 September 2022 concerning the Objection Schedule and also in relation to an objection raised by counsel for David and Tina in the Zigaroo proceeding.
When senior counsel for the David Brandi parties replied to submissions on behalf of the Jason Brandi parties late on the afternoon of 6 September 2022, certain of the proposed amendments, and also certain further existing allegations and causes of action that formed part of the 2 September 2022 4ASC, were abandoned. What was abandoned during the hearing on 6 September 2022 was the subject of a further proposed Fourth Amended Statement of Claim dated 7 September 2022 (‘4ASC’). The 4ASC abandoned:
(a)the newly proposed estoppel plea, first introduced on 2 September 2022;[8]
(b)the allegations of a joint enterprise and common intention on the part of David and Jason concerning Newsom Street, claims that had long been made by David;[9] and
(c)the claim alleging a common intention on the part of David and Jason that they would share equally in the beneficial enjoyment of Newsom Street; another claim long made by David.[10]
Consequential amendments were made to the prayer for relief. Additionally, the David Brandi parties provided a proposed First Defendant’s Defence to the 2AC (‘7 September 2022 Defence to 2AC’).
[8]2 September 2022 4ASC, [36A] (now deleted in the 4ASC).
[9]Ibid, [39] (now deleted in the 4ASC).
[10]Ibid, [44]-[47] (now deleted in the 4ASC).
As a result of the 2 September 2022 amendments, Timeless Sunrise no longer made a claim in the Timeless Sunrise proceeding, whether relating to Newsom Street or otherwise. The effect of the amendments in the 4ASC is that David no longer personally claims any interest in Newsom Street and, whilst continuing as a named plaintiff, no longer seeks relief in his own right. As confirmed by senior counsel for the David Brandi parties on 6 September 2022, the only party who now makes a claim in relation to Newsom Street on behalf of the David Brandi parties is Mr Landlord Pty Ltd (‘Mr Landlord Co’) in its capacity as trustee of the Brandi Family Trust.
This ruling proceeds on the basis of the 4ASC and otherwise on the basis of the 2 September 2022 amendments so far as the David Brandi parties are concerned. Given the rapidly changing and evolving landscape, and timing, the Jason Brandi parties have not yet formally pleaded to the 4ASC. While that is the case, on 8 September 2022, a proposed Third Further Amended Defence (‘3FAD’) was provided to the Court and to the David Brandi parties responding to the 4ASC. The David Brandi parties informed the Court on 8 September 2022 that they object to a number of amendments contained in the 3FAD.[11]
[11]Transcript, 1121.
It is important to note that the five witness statements adopted by David on 5 September 2022 were adopted by him before the further abandonment of claims on 6 September 2022. Those witness statements had earlier been the subject of detailed objections and a ruling concerning them.[12]
[12]Order of Delany J in Timeless Sunrise Pty Ltd v BigJ Enterprises Pty Ltd (Supreme Court of Victoria, S ECI 2019 04430, 31 August 2022).
The scope of the objections
The scope of the objections the subject of this ruling is defined by the Objection Schedule reproduced below and by a further matter arising in the Zigaroo proceeding concerning a loan from the Australian and New Zealand Banking Corporation (‘ANZ’). The Objection Schedule is in the following terms:
Anticipated topics – s 128 objection Other grounds 1 Any knowledge of David Brandi of, or involvement of David Brandi in: 1.1 the CEG Loan, CEG Caveat, the Atida Mortgage or any other matters the subject of paragraphs [9A]-[12AD] in the Second Amended Counterclaim dated 2 September 2022 (FAC); - 1.2 the Leaning Back Loan or any other matters the subject of paragraphs [26B]-[26J] of the FAC; - 1.3 the preparation and/or use of any documents containing allegedly forged signatures as referred to in Appendix B of the Jason Brandi parties’ opening submissions dated 8 August 2022 or otherwise; As to CEG/Atida documents (item nos. 54-106) and PDJ Crew Unit Trust FY15 and FY16 documents (item nos. 44-45 and 51-52) – none
As to other documents: relevance (s 56(2)); tendency (s 97(1));
credibility (s 102); s 135 exclusion
1.4 the preparation, filing and/or other use of company records alleged to be false, including: (a) documents allegedly provided to ASIC in about May 2019 relating to the appointment of David Brandi as a director of PDJ Crew, including communications by Dorsia Legal with Patrick & Associates in relation to the same; - (b) documents relating to the appointment of Erminio Brandi to companies allegedly without his knowledge; As to PDJ Crew – none
As to other records: relevance (s 56(2)); tendency (s 97(1));
credibility (s 102); s 135 exclusion
(c) documents provided to liquidators or other insolvency practitioners appointed to entities including Independent Tube Mills Pty Ltd (In Liquidation) ACN 136 627 186 as Trustee for The ITM Unit Trust ABN 49 612 237 071 (ITM) in relation to the creditors and affairs of the company; As to ITM “loans” by PDJ Crew, David, Tania and Jason – none
As to other records: relevance (s 56(2)); tendency (s 97(1));
credibility (s 102); s 135 exclusion
1.5 transactions involving David Brandi or his related entities relating to assets and/or value being transferred out of such entities including ITM and Sputnik Holdings Pty Ltd ACN 132 646 336 (formerly known as Australian Pipe & Tube Pty Ltd) temporally proximate to any of the circumstances listed in s 589(1) of the Corporations Act 2001 (Cth). Relevance (s 56(2)); tendency (s 97(1)); credibility (s 102); s 135 exclusion
In the Zigaroo proceeding, David seeks to rely upon s 128 in relation to anticipated evidence concerning the refinance of a loan from the Commonwealth Bank of Australia (‘CBA’) to Zigaroo which was refinanced in 2013 with the ANZ, secured by a mortgage over the property at 306 Ascot Vale Road, Moonee Ponds of which Zigaroo was the registered proprietor (‘ANZ mortgage’). These matters were previously the subject of paragraphs 55 – 58 in the Amended Statement of Claim in the Zigaroo proceeding. Paragraphs 55 – 58 having being deleted as part of the 2 September 2022 Zigaroo amendments, the earlier defence to those paragraphs alleging that Fernanda’s signature was forged no longer responds to an allegation that is pressed by David and Tina.
For convenience, I will refer to the Zigaroo proceeding objection concerning the ANZ mortgage as ‘item 1.6’.
Section 128 and the issues in dispute
Section 128 of the Evidence Act, upon which David seeks to rely, relevantly provides:
(1)This section applies if a witness objects to giving particular evidence, or evidence on a particular matter, on the ground that the evidence may tend to prove that the witness—
(a)has committed an offence against or arising under an Australian law or a law of a foreign country; or
(b)is liable to a civil penalty.
(2)The court must determine whether or not there are reasonable grounds for the objection.
(3)Subject to subsection (4), if the court determines that there are reasonable grounds for the objection, the court is not to require the witness to give the evidence, and is to inform the witness—
(a)that the witness need not give the evidence unless required by the court to do so under subsection (4); and
(b)that the court will give a certificate under this section if—
(i)the witness willingly gives the evidence without being required to do so under subsection (4); or
(ii)the witness gives the evidence after being required to do so under subsection (4); and
(c)of the effect of such a certificate.
(4)The court may require the witness to give the evidence if the court is satisfied that—
(a)the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and
(b)the interests of justice require that the witness give the evidence.
(5)If the witness either willingly gives the evidence without being required to do so under subsection (4), or gives it after being required to do so under that subsection, the court must cause the witness to be given a certificate under this section in respect of the evidence.
(6)The court is also to cause a witness to be given a certificate under this section if—
(a)the objection has been overruled; and
(b)after the evidence has been given, the court finds that there were reasonable grounds for the objection.
(7)In any proceeding in a Victorian court or before any person or body authorised by a law of this State, or by consent of parties, to hear, receive and examine evidence—
(a)evidence given by a person in respect of which a certificate under this section has been given; and
(b)evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence—
cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence.
…
(11)A reference in this section to doing an act includes a reference to failing to act.
(12)If a person has been given a certificate under a prescribed State or Territory provision in respect of evidence given by a person in a proceeding in a State or Territory court, the certificate has the same effect, in a proceeding to which this subsection applies, as if it had been given under this section.
(13)For the purposes of subsection (12), a prescribed State or Territory provision is a provision of a law of a State or Territory declared by the regulations to be a prescribed State or Territory provision for the purposes of that subsection.
(14)Subsection (12) applies to a proceeding in relation to which this Act applies because of section 4, other than a proceeding for an offence against a law of the Commonwealth or for the recovery of a civil penalty under a law of the Commonwealth.
The dictionary definition of ‘civil penalty’ is relevant to s 128:
3. References to civil penalties
For the purposes of this Act, a person is taken to be liable to a civil penalty if, in an Australian or overseas proceeding (other than a criminal proceeding), the person would be liable to a penalty arising under an Australian law or a law of a foreign country.[13]
[13]Evidence Act 2008 (Vic), clause 3 of Part 2.
As will be apparent from its terms, the first question to be determined under s 128 where the witness objects to giving evidence on the ground that such evidence may tend to prove the witness committed an offence or is liable to a civil penalty[14] is whether there are reasonable grounds for the objection.[15] If the court determines there are reasonable grounds for the objection, then the next question that arises is whether the witness is willing to give the evidence under the protection of a certificate.[16] If not, and in this case David is not willing to give evidence concerning any of the anticipated topics in the Objection Schedule, or concerning item 1.6, the court may require the witness to give the evidence if the court is satisfied that the interests of justice require that the witness give the evidence.[17]
[14]Ibid, s 128(1).
[15]Ibid, s 128(2).
[16]Ibid, s 128(3)(b)(i).
[17]Ibid, s 128(4)(b).
The Jason Brandi parties accept that there are reasonable grounds for objection by David to giving evidence in relation to item 1.1; the matters concerning the loan between CEG and PDJ Crew (‘CEG loan’) and the mortgage over Newsom Street in favour of Atida (‘Atida mortgage’), and also in relation to item 1.4(a), the backdating allegation concerning the appointment of David as a director of PDJ Crew in about May 2019, including communications involving Dorsia Legal.[18] That is, on the ground that such evidence may tend to prove that David has committed an offence against or arising under an Australian law or is liable to a civil penalty as provided for in s 128(1).
[18]Transcript, 980.
The Jason Brandi parties do not accept that reasonable grounds to claim the protection of s 128 as referred to in s 128(2) are established in relation to the remaining topics in the Objection Schedule or in relation to item 1.6.
The Jason Brandi parties contend in respect of all items in the Objection Schedule; including items 1.1 and 1.4(a) and also item 1.6 in the Zigaroo proceeding, that the ‘interests of justice’ to which s 128(4)(b) refers require that David be required to give evidence in relation to those matters and, where appropriate, that he be provided with a s 128 certificate in relation to such evidence.
As appears from the Objection Schedule, a number of different provisions of the Evidence Act are also relied upon by David in support of the contention that cross-examination as to topics 1.1 – 1.5 should not be permitted. It is convenient to identify those provisions.
Relevant provisions of the Evidence Act 2008 (Vic)
The sections of the Evidence Act that are relied upon in the Objection Schedule relevantly state as follows.
Section 56(2):
(2) Evidence that is not relevant in the proceeding is not admissible.
Section 97(1):
(1)Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person's character or otherwise) to act in a particular way, or to have a particular state of mind unless—
(a)the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party’s intention to adduce the evidence; and
(b)the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.
Section 102:
Credibility evidence about a witness is not admissible.
Section 103:
(1)The credibility rule does not apply to evidence adduced in cross-examination of a witness if the evidence could substantially affect the assessment of the credibility of the witness.
(2)Without limiting the matters to which the court may have regard for the purposes of subsection (1), it is to have regard to—
(a)whether the evidence tends to prove that the witness knowingly or recklessly made a false representation when the witness was under an obligation to tell the truth; and
(b)the period that has elapsed since the acts or events to which the evidence relates were done or occurred.
Section 135:
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might—
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time; or
…
Section 128(2): The Onus and ‘reasonable grounds’
When determining whether reasonable grounds exist for the objection as provided for in s 128(2), the following statements by Gordon J in Deputy Commissioner of Taxation v Shi (‘Shi’)[19] in the context of a similar provision; s 128A(4) of the Evidence Act concerning disclosure orders, are of assistance:
[19][2021] HCA 22; (2021) 392 ALR 1. Note that, while Gordon J was considering s 128A(4), that section is the equivalent to s 128(2). The plurality agreed with Gordon J, but delivered separate reasons.
[28]As is apparent, the basis for the objection must be that some or all of the information required to be disclosed may tend to prove that the person has committed an offence against or arising under an Australian law or a law of a foreign country or that the person is liable to a civil penalty. The person asserting the privilege bears the onus of establishing the factual basis for the privilege[20].
…
[30]What will be necessary to establish whether the information may tend to prove the commission of an offence will vary from case to case. The privilege may be claimed without requiring the person to explain fully how disclosure of the information would bring about the incriminating effect. To require the relevant person to go further would in at least some circumstances annihilate the protection that the section is designed to provide[21]. However, the mere statement by the relevant person that they believe that disclosure of information will tend to incriminate them will rarely be sufficient to protect them from complying with the disclosure order, and it will not do so when other circumstances are such as to induce the court to believe that disclosure of that information will not really have that tendency[22].
…
[33]Section 128A(4) then provides that it is for the court to determine whether or not there are reasonable grounds for the objection. The test is objective and evaluative[23]. Once the privilege has been claimed, the question for the court is whether, in all the circumstances, reasonable grounds exist for apprehending danger to the relevant person from being compelled to comply with the disclosure order in relation to some or all of the information in the privilege affidavit.
[34]In assessing whether there are reasonable grounds for the objection, the court must assess whether there is a “real and appreciable risk” of prosecution if the relevant information is disclosed[24]. The gist of the privilege is that disclosure of the information “would tend to expose the claimant to the apprehended consequence”[25]. The “reasonable grounds” inquiry requires the court to assess, having regard to the circumstances of the case and the nature of the information which the relevant person is required to disclose, whether there are reasonable grounds to apprehend danger to them from being compelled to disclose the information[26]. This requires consideration of whether information may tend to prove the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. There must be some material upon which the court can be satisfied of these matters[27]. The court is not limited to information in the privilege affidavit or any other material filed by the relevant person.[28]
[20]Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 422, 430 (McFadden); Sadie Ville Pty Ltd (as trustee for the Sadie Ville Superannuation Fund) v Deloitte Touche Tohmatsu (a firm) (No 3) (2018) 357 ALR 695; 128 ACSR 625; [2018] FCA 1107 (Sadie Ville) at [99], [113] (approved on appeal in Deloitte Touche Tohmatsu (a firm) v Sadie Ville Pty Ltd (as trustee for Sadie Ville Superannuation Fund) (2020) 144 ACSR 1; [2020] FCAFC 23, see especially at [6]).
[21]McFadden at 430. See also Taylor, A Treatise on the Law of Evidence, as Administered in England and Ireland, 8th ed, 1885, vol II, p 1247.
[22]McFadden at 430; Taylor, A Treatise on the Law of Evidence, as Administered in England and Ireland, 8th ed, 1885, vol II, pp 1247–8.
[23]See Re Application concerning s 80 at [21].
[24]Rio Tinto v Westinghouse at AC 574; Sorby at CLR 290; ALR 242–3; Sadie Ville at [99].
[25]Sadie Ville at [98].
[26]Sorby at CLR 289; ALR 242. It is to be accepted, however, that considerable latitude is to be afforded because information, though at first sight apparently innocent, may afford a link in a chain of evidence and thereby be a means of bringing home the offence to the relevant person.
[27]McFadden at 423; Re Application concerning s 80 at [24].
[28]Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 392 ALR 1, [28], [30], [33]-[34] (Gordon J) (citations in original). See also [83] (Edelman J). Shi concerned s 128A(4), but that provision is in identical terms to s 128(2).
In Shi,[29] Gordon J referenced the following observations of Kirby P and Clarke JA in Accident Insurance Mutual Holdings Ltd v McFadden (‘Accident Insurance Mutual’):
[29]Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 392 ALR 1, [28], [30], [34].
Per Kirby P:
4.A mere statement by a witness that the answer may tend to incriminate that witness is not sufficient to found the claim for the privilege against self-incrimination. The Court must be satisfied that there is reasonable ground and that the objection is taken bona fide: Jackson v Gamble [1983] 1 VR 552 at 556. The test applied is whether there is a “real and appreciable risk of criminal proceedings … being taken against” the witness. The test is sometimes expressed as to whether there is a “real and appreciable risk of criminal proceedings … being taken against” the witness: see Rank Film Distributors Ltd v Video Information Centre (A Firm) [1982] AC 380 at 441. A remote or slight possibility of legal peril to a witness may not, in a particular case, be sufficient to invoke the privilege and to sustain a refusal to answer a question: see R v Boyes, loc cit. In some circumstances, a person will lose the privilege if pardoned (as was the case in R v Boyes) or if earlier dealt with by law upon the subject said to give rise to the apprehension of jeopardy. If criminal proceedings have been concluded (either by acquittal or by conviction and sentence) a person can stand in no further jeopardy of punishment upon the precise matters already dealt with;
…
7.It is for the presiding judicial officer to determine whether the objection taken is good and whether there are reasonable grounds for the belief on the part of the witness that he or she is, or may be, in peril of future criminal or like proceedings if the answer is given. Just as the court must protect the privilege, it must also make sure that the rule is not abused; but applied only where its invocation is justified: see Triplex Safety Glass Co Ltd v Lancegaye Safety Glass (1934) Ltd [1939] 2 KB 395 at 403. The proper procedure in a claim for privilege is to object to each question as it is asked: see Ex parte Reynolds; Brebner v Perry [1961] SASR 177 at 180. It is not proper to refuse to be sworn or to decline to answer any questions at all or to claim a global protection from the privilege. Such a refusal may amount to a contempt of court: see Smith v The Queen (1991) 25 NSWLR 1 at 9. Nevertheless, a point will be reached in questioning where it will be unnecessary to persist with an entire cross-examination which is clearly futile by reason of the invocation of the privilege against self-incrimination. To demand a tedious repetition of questions, rebuffed every time by a claim of privilege which is upheld, would be pointless;
…
Per Clarke JA:
The rule that a witness is not compellable to answer questions where the answers would have a tendency to expose the witness to any kind of criminal charge is one of great antiquity: see Taylor, A Treatise on the Law of Evidence, 8th ed, vol 2, at 1242-1243. Whether the answer may tend to incriminate the witness is a point which the court will determine, under all the circumstances of the case, as soon as the protection is claimed. It will do so without requiring the witness fully to explain how the effect would be produced, for if this were necessary, the protection which the rule is designed to afford to the witness would at once be annihilated: Taylor, (at 1247). However, the mere statement by a witness that he believes the answer will tend to incriminate him will not suffice to protect him from answering when the other circumstances of the case are such as to induce the judge to believe that the answer would not really have that tendency (at 1247-1248):
“… In all cases of this kind the court must see, from the surrounding circumstances, and the nature of the evidence which the witness is called to give, that reasonable grounds exist for apprehending danger to the witness from his being compelled to answer. When, however, the fact of such danger is once made to appear, considerable latitude should be allowed to the witness in judging for himself of the effect of any particular question; for it is obvious that a question, though at first sight apparently innocent, may, by affording a link in a chain of evidence, become the means of bringing home an offence to the party answering. On the whole, as Lord Hardwicke once observed, ‘these objections to answering should be held to very strict rules’. Vaillant v Dodemead, 2 Atk 524.”[30]
[30]Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412, 422-423 (Kirby P), 430 (Clarke JA).
Consistent with the decisions in Shi and Accident Insurance Mutual and with the scheme of s 128 which permits the witness to seek the statutory protection against self-incrimination, so far as the objections taken by David relying on s 128 are concerned, David bears the onus of establishing reasonable grounds in s 128(2). An important consideration in determining whether the onus in s 128(2) has been discharged is whether the likelihood or risk of steps being taken to prosecute the witness in relation to the criminal offence or civil penalty has been demonstrated.
Offences under Australian Law and Civil Penalty Provisions
For the purposes of s 128(1) and (2), it is necessary to determine whether or not there are reasonable grounds to find that the evidence, if adduced, may tend to prove that the witness has committed an offence or is liable to a civil penalty. The following are extracts from the Australian laws identified and relied upon by David.
Crimes Act 1958 (Vic)
Section 81 of the Crimes Act 1958 (Vic) (‘Crimes Act’). Section 81 provides:
(1)A person who by any deception dishonestly obtains property belonging to another, with the intention of permanently depriving the other of it, is guilty of an indictable offence and liable to level 5 imprisonment (10 years maximum).
(2)For purposes of this section a person is to be treated as obtaining property if he obtains ownership, possession or control of it, and “obtain” includes obtaining for another or enabling another to obtain or to retain.
(3)Subsections (12) and (13) of section 73 shall apply for purposes of this section, with the necessary adaptation of the reference to appropriating, as it applies for purposes of section 72.
(4)For the purposes of this section, ”deception”—
(a)means any deception (whether deliberate or reckless) by words or conduct as to fact or as to law, including a deception as to the present intentions of the person using the deception or any other person; and
(b)includes an act or thing done or omitted to be done with the intention of causing—
(i)a computer system; or
(ii)a machine that is designed to operate by means of payment or identification—
to make a response that the person doing or omitting to do the act or thing is not authorised to cause the computer system or machine to make.
Section 82 of the Crimes Act. Section 82 provides:
(1)A person who by any deception dishonestly obtains for himself or another any financial advantage is guilty of an indictable offence and liable to level 5 imprisonment (10 years maximum).
(2)For purposes of this section deception has the same meaning as in section 81.
Section 83 of the Crimes Act. Section 83 relevantly provides:
(1)Where a person dishonestly, with a view to gain for himself or another with intent to cause loss to another –
(a)destroys, defaces or conceals or falsifies any account or any record or document mare or required for any accounting purpose; or
(b)in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular –
he is guilty of an indictable offence and liable to level 5 imprisonment (10 years maximum).
(2)For purposes of this section a person who makes or concurs in making in an account or other document an entry which is or may be misleading, false or deceptive in a material particular, or who omits or concurs in omitting a material particular from an account or other document, is to be treated as falsifying the account or document.
Section 83A of the Crimes Act. Section 83A relevantly provides:
(1)A person must not make a false document with the intention that he or she, or another person, shall use it to induce another person to accept it as genuine, and by reason of so accepting it to do or not to do some act to that other person's, or to another person’s prejudice.
Penalty: Level 5 imprisonment (10 years maximum).
(2)A person must not use a document which is, and which he or she knows to be, false, with the intention of inducing another person to accept it as genuine, and by reason of so accepting it to do or not to do some act to that other person’s, or to another person’s prejudice.
Penalty: Level 5 imprisonment (10 years maximum).
…
(6)For the purpose of this section, a document is false if it purports—
(a)to have been made in the form in which it is made by a person who did not in fact make it in that form; or
(b)to have been made in the form in which it is made on the authority of a person who did not in fact authorise its making in that form; or
(c)to have been made in the terms in which it is made by a person who did not in fact make it in those terms; or
(d)to have been made in the terms in which it is made on the authority of a person who did not in fact authorise its making in those terms; or
(e)to have been altered in any respect by a person who did not in fact alter it in that respect; or
(f)to have been altered in any respect on the authority of a person who did not in fact authorise the alteration in that respect; or
(g)to have been made or altered on a date on which, or at a place at which, or otherwise in circumstances in which, it was not in fact made or altered; or
(h)to have been made or altered by an existing person who did not in fact exist.
(7)For the purposes of this section, a person is to be treated as making a false document if the person alters a document so as to make it false in any respect (whether or not it is false in some other respect apart from that alteration).
(8)For the purposes of this section, an act or omission is to a person’s prejudice if, and only if, it is one that, if it occurs—
(a)will result—
(i)in the person’s temporary or permanent loss of property; or
(ii)in the person’s being deprived of an opportunity to earn remuneration or greater remuneration; or
(iii)in the person’s being deprived of an opportunity to obtain a financial advantage otherwise than by way of remuneration; or
(b)will result in any person being given an opportunity—
(i)to earn remuneration or greater remuneration from the first-mentioned person; or
(ii)to obtain a financial advantage from the first-mentioned person otherwise than by way of remuneration; or
(c)will be the result of the person’s having accepted a false document as genuine, or a copy of a false document as a copy of a genuine one, in connection with the person's performance of a duty.
…
Section 85 of the Crimes Act. Section 85 provides:
(1)Where an officer of a body corporate or unincorporated association (or person purporting to act as such), with intent to deceive members or creditors of the body corporate or association about its affairs, publishes or concurs in publishing a written statement or account which to his knowledge is or may be misleading, false or deceptive in a material particular, he is guilty of an indictable offence and liable to level 5 imprisonment (10 years maximum).
(2)For purposes of this section a person who has entered into a security for the benefit of a body corporate or association is to be treated as a creditor of it.
(3)Where the affairs of a body corporate or association are managed by its members, this section shall apply to any statement which a member publishes or concurs in publishing in connexion with his functions of management as if he were an officer of the body corporate or association.
Criminal CodeAct 1995 (Cth)
Section 137.1 of the Criminal Code Act 1995 (Cth) (‘Criminal Code’) relevantly provides:
(1)A person commits an offence if:
(a)the person gives information to another person; and
(b)the person does so knowing that the information:
(i)is false or misleading; or
(ii)omits any matter or thing without which the information is misleading; and
(c)any of the following subparagraphs applies:
(i)the information is given to a Commonwealth entity;
(ii)the information is given to a person who is exercising powers or performing functions under, or in connection with, a law of the Commonwealth;
(iii)the information is given in compliance or purported compliance with a law of the Commonwealth.
Penalty: Imprisonment for 12 months.
(1A)Absolute liability applies to each of the subparagraph (1)(c)(i), (ii) and (iii) elements of the offence.
(2)Subsection (1) does not apply as a result of subparagraph (1)(b)(i) if the information is not false or misleading in a material particular.
Section 137.2 relevantly provides:
(1)A person commits an offence if:
(a)the person produces a document to another person; and
(b)the person does so knowing that the document is false or misleading; and
(c)the document is produced in compliance or purported compliance with a law of the Commonwealth.
Penalty: Imprisonment for 12 months.
(2)Subsection (1) does not apply if the document is not false or misleading in a material particular.
Taxation Administration Act 1997 (Vic)
Section 52 of the Taxation Administration Act 1997 (Vic) relevantly provides:
(1)A person must not—
(a)make a record required to be made by a taxation law that comprises or contains matter that is false or misleading in a material particular; or
(b)include in a record required to be made or kept by a taxation law matter that is false or misleading in a material particular.
Penalty: 1200 penalty units in the case of a body corporate;
240 penalty units in any other case.
Section 57 provides:
(1)A person must not, without reasonable excuse—
(a)make a statement, orally or in writing, to a tax officer; or
(b)give information, orally or in writing, to a tax officer—
that is false or misleading in a material particular.
Penalty: 600 penalty units in the case of a body corporate;
120 penalty units in any other case.
Section 60 provides:
A taxpayer must not—
(a)falsify or conceal the identity, or the address or location of a place of residence or business, of the taxpayer or of another person; or
(b)do, by act or omission, anything that facilitates the falsification or concealment of the identity, or the address or location of a place of residence or business, of the taxpayer or another person.
Penalty: 500 penalty units in the case of a body corporate;
100 penalty units in any other case.
Corporations Act 2001 (Cth)
Section 347A of the Corporations Act 2001 (Cth) (‘Corporations Act’) provides:
(1)The directors of a company must pass a solvency resolution within 2 months after each review date for the company.
(2)Subsection (1) does not apply to the directors of a company that has lodged a financial report with the Registrar under Chapter 2M within the period of 12 months before the review date.
Note:The defendant bears an evidential burden in relation to the matter in subsection (2). See subsection 13.3(3) of the Criminal Code.
(3) An offence based on subsection (1) is an offence of strict liability.
Section 590(1) provides:
(1)A person who, being a past or present officer or employee of a company to which this section applies:
(a)does not disclose to the appropriate officer all the property of the company, and how and to whom and for what consideration and when any part of the property of the company was disposed of within 10 years next before the relevant day, except such part as has been disposed of in the ordinary course of the business of the company; or
(c)has, within 10 years next before the relevant day or at a time on or after that day:
(i)engaged in conduct that resulted in the fraudulent concealment or removal of any part of the property of the company to the value of $100 or more; or
(ii)engaged in conduct that resulted in the concealment of any debt due to or by the company; or
(iii)engaged in conduct that resulted in the fraudulent parting with, alteration or making of any omission in, or being privy to fraudulent parting with, altering or making any omission in, any book affecting or relating to affairs of the company; or
(iv)by any false representation or other fraud, obtained on credit, for or on behalf of the company, any property that the company has not subsequently paid for; or
(v)engaged in conduct that resulted in the fraudulent pawning, pledging or disposal of, otherwise than in the ordinary course of the business of the company, property of the company that has been obtained on credit and has not been paid for;
(d)fraudulently makes any material omission in any statement or report relating to affairs of the company; or
(f)engaged in conduct that prevented the production to the appropriate officer of any book affecting or relating to affairs of the company; or
(g)has, within 10 years next before the relevant day or at a time on or after that day, attempted to account for any part of the property of the company by making entries in the books of the company showing fictitious transactions, losses or expenses; or
(h)has, within 10 years next before the relevant day or at a time on or after that day, been guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to affairs of the company or to the winding up;
contravenes this subsection.
Section 596(1) is in the following terms:
(1)A person who, while an officer or employee of a company:
(a)by false pretences or by means of any other fraud, induces a person to give credit to the company or to a related body corporate; or
(b)with intent to defraud the company or a related body corporate, or members or creditors of the company or of a related body corporate, makes or purports to make, or causes to be made or to be purported to be made, any gift or transfer of, or security interest in, or causes or connives at the levying of any execution against, property of the company or of a related body corporate; or
(c)with intent to defraud the company or a related body corporate, or members or creditors of the company or of a related body corporate, engages in conduct that results in the concealment or removal of any part of the property of the company or of a related body corporate after, or within 2 months before, the date of any unsatisfied judgment or order for payment of money obtained against the company or a related body corporate;
contravenes this section.
Note: This section applies to a CCIV in a modified form: see section 1238F.
Section 1307:
(1)An officer, former officer, employee, former employee, member or former member of a company who engages in conduct that results in the concealment, destruction, mutilation or falsification of any securities of or belonging to the company or any books affecting or relating to affairs of the company is guilty of an offence.
Note: This subsection applies in relation to CCIVs with modifications: see section 1242C.
(2)Where matter that is used or intended to be used in connection with the keeping of any books affecting or relating to affairs of a company is recorded or stored in an illegible form by means of a mechanical device, an electronic device or any other device, a person who:
(a)records or stores by means of that device matter that the person knows to be false or misleading in a material particular; or
(b)engages in conduct that results in the destruction, removal or falsification of matter that is recorded or stored by means of that device, or has been prepared for the purpose of being recorded or stored, or for use in compiling or recovering other matter to be recorded or stored by means of that device; or
(c)having a duty to record or store matter by means of that device, fails to record or store the matter by means of that device:
(i)with intent to falsify any entry made or intended to be compiled, wholly or in part, from matter so recorded or stored; or
(ii)knowing that the failure so to record or store the matter will render false or misleading in a material particular other matter so recorded or stored;
contravenes this subsection.
(3)It is a defence to a charge arising under subsection (1) or (2) if the defendant proves that he, she or it acted honestly and that in all the circumstances the act or omission constituting the offence should be excused.
Note: A defendant bears a legal burden in relation to the matter mentioned in subsection (3), see section 13.4 of the Criminal Code .
Section 1308 provides:
Fault-based offence
(1)A person commits an offence if:
(a)a document:
(i)is required under or for the purposes of this Act; or
(ii)is lodged with or submitted to ASIC or the Registrar; and
(b)the person:
(i)makes, or authorises the making of, a statement in the document; or
(ii)omits, or authorises the omission of, a matter or thing from the document; and
(c)the person knows that the document is materially false or misleading because of the statement or omission.
Note: For when a document is materially false or misleading , see subsection (6).
(2)A person is not liable to be proceeded against for an offence in consequence of a regulation made under section 1364 as well as for an offence against subsection (1) of this section.
Strict liability offence--failure to take reasonable steps
(3)A person commits an offence of strict liability if:
(a)a document:
(i)is required under or for the purposes of this Act; or
(ii)is lodged with or submitted to ASIC or the Registrar; and
(b)the person:
(i)makes, or authorises the making of, a statement in the document; or
(ii)omits, or authorises the omission of, a matter or thing from the document; and
(c)the document is materially false or misleading because of the statement or omission; and
(d)the person did not take all reasonable steps to ensure that the document was not materially false or misleading because of the statement or omission.
Note 1: For when a document is materially false or misleading , see subsection (6).
Note 2: For strict liability, see section 6.1 of the Criminal Code.
Civil penalty--knowledge or recklessness
(4)A person contravenes this subsection if:
(a)a document:
(i)is required under or for the purposes of this Act; or
(ii)is lodged with or submitted to ASIC or the Registrar; and
(b)the person:
(i)makes, or authorises the making of, a statement in the document; or
(ii)omits, or authorises the omission of, a matter or thing from the document; and
(c)the person knows that, or is reckless as to whether, the document is materially false or misleading because of the statement or omission.
Note 1: For when a document is materially false or misleading , see subsection (6).
Note 2: This subsection is a civil penalty provision (see section 1317E).
Civil penalty--failure to take reasonable steps
(5)A person contravenes this subsection if:
(a)a document:
(i)is required under or for the purposes of this Act; or
(ii)is lodged with or submitted to ASIC or the Registrar ; and
(b)the person:
(i)makes, or authorises the making of, a statement in a document; or
(ii)omits, or authorises the omission of, a matter or thing from a document; and
(c)the document is materially false or misleading because of the statement or omission; and
(d)the person did not take all reasonable steps to ensure that the document was not materially false or misleading because of the statement or omission.
Note 1: For when a document is materially false or misleading , see subsection (6).
Note 2: This subsection is a civil penalty provision (see section 1317E).
When a document is materially false or misleading
(6)For the purposes of this section, a document is materially false or misleading if:
(a)the document includes a statement that:
(i)is false in a material particular or materially misleading; or
(ii)is based on information that is false in a material particular or materially misleading, or has omitted from it a matter or thing the omission of which renders the document materially misleading; or
(b)a matter or thing is omitted from the document and, without the matter or thing, the document is false in a material particular or materially misleading.
Other interpretive provisions
(7)For the purposes of this section, a person who votes in favour of a resolution approving, or who otherwise approves, a document is taken to have authorised:
(a)the making of any statement in the document; and
(b)the omission of any matter or thing from the document.
(8)For the purposes of this section, a statement, report or other document that:
(a)relates to affairs of a company or of a subsidiary of a company; and
(b)is attached to or included with a report of the directors provided under section 314 to members of the company or laid before the company at an annual general meeting of the company;
is taken to be part of the report referred to in paragraph (b) of this subsection, even if it is not otherwise required by this Act to be laid before the company in general meeting.
(9)For the purposes of this section:
(a)a notice under subsection 708AA(2), 708A(5), 1012DAA(2) or 1012DA(5) is taken to be a notice required for the purposes of this Act; and
(b)a notice under subsection 708AA(2), 708A(5), 1012DAA(2) or 1012DA(5) is taken to be misleading in a material respect if it fails to comply with paragraph 708AA(7)(d), 708A(6)(e), 1012DAA(7)(e) or 1012DA(6)(f).
Section 128(4)(b): The onus
There is some divergence in recent cases concerning the question of who bears the onus for the purposes of s 128(4)(b). In Shi, Edelman J made the following observations:[31]
[89]There are some aspects of s 128(4) in which questions of onus do not arise. One circumstance where there is no role for any onus is in decisions concerning s 128(4)(b): “the interests of justice”. In those circumstances, the issue will only be one of evaluation of the existing evidence and circumstances.
[31]Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 392 ALR 1, [89] (citations omitted).
In Villan v State of Victoria (‘Villan’),[32] Keogh J proceeded on a different basis:[33]
[14]The party seeking to have the witness compelled bears the onus of satisfying the court that the interests of justice require the evidence to be given. It is not sufficient that the evidence is relevant to the facts in issue in the proceeding.
[32][2021] VSC 354.
[33]Ibid, [14] (citations omitted), citing Gedeon v The Queen [2013] NSWCCA 257; (2013) 280 FLR 275, [285]–[286] (Bathurst CJ, with whom Beazley P, Hoeben CJ at CL, Blanch J and Price J agreed).
In Roberts-Smith v Fairfax Media Publications Pty Ltd (No 28) (‘Roberts-Smith (No 28)’),[34] Besanko J proceeded on the same basis as Keogh J in Villan.[35] Namely, that the party pressing the question or matter for which s 128 privilege is claimed has the onus of establishing the matters in s 128(4)(b).[36]
[34][2022] FCA 115.
[35]Ibid, [29].
[36]Ibid.
In Roberts-Smith (No 28), Besanko J applied the decision of the New South Wales Court of Appeal in Gedeon v The Queen (‘Gedeon’).[37] In Gedeon, Bathurst CJ (with whom Beazley P, Hoeben CJ at CL, Blanch J and Price J agreed) said:
[285]A number of matters should be noted at the outset. First, the onus was on the appellant to establish that the interests of justice required the evidence to be given. That, in my opinion, is the effect of s 142 of the Evidence Act: see S Odgers, Uniform Evidence Law, 10th ed (2012) at [1.3.13060].[38]
[37]Ibid, applying Gedeon v The Queen [2013] NSWCCA 257; (2013) 280 FLR 275, [285] (Bathurst CJ, with whom Beazley P, Hoeben CJ at CL, Blanch J and Price J agreed).
[38]Gedeon v The Queen [2013] NSWCCA 257; (2013) 280 FLR 275, [285] (Bathurst CJ, with whom Beazley P, Hoeben CJ at CL, Blanch J and Price J agreed).
The observations by Edelman J in Shi were obiter and were made in the context of a decision dealing not with s 128 but one dealing with s 128A of the Evidence Act. Other members of the High Court did not express a view in relation to the onus question.[39] In the circumstances, I proceed so far as the onus in s 128(4)(b) is concerned on the basis of the decisions in Gedeon, Villan and Roberts-Smith (No 28). Namely, that the Jason Brandi parties bear the onus of showing, in respect of each of the matters in the Objection Schedule and item 1.6, that, for the purposes of s 128(4)(b), the interests of justice require that David give the evidence.
Section 128(4)(b): The ‘Interests of Justice’: The Authorities
[39]Note that Gordon J opined at [70] about the onus in s 128A(6)(a) and (b), but not s 128A(6)(c) (which contains the interests of justice requirement.
In Shi, Gordon J made the following observations concerning s 128A(6), a section which enables the court to require a person to disclose information in an affidavit where the court is satisfied that the interests of justice require the information to be disclosed but where to do so may tend to prove that the relevant person has committed an offence or is liable to a civil penalty:[40]
[40]Where there is information of the kind described in s 128A(6)(a) and (b) the court must be satisfied that the interests of justice require that that information be disclosed. If so satisfied, the court may require the whole or any part of the privilege affidavit containing information of the kind referred to in s 128A(6)(a) to be filed and served on the parties.
[41]What the interests of justice require in a particular case is to be weighed having regard to the proceeding in which the question arises. Here, the proceeding involves the making of the Freezing Orders and the necessary ancillary relief in the form of the Disclosure Order in seeking to ensure that the Court's processes for enforcement of a judgment for substantial tax debts are not frustrated by assets being spirited away before eventual enforcement. The factors to be balanced in determining whether the interests of justice require the information to be disclosed are not and cannot be prescribed but may include the nature of the information, the likelihood of an offence being prosecuted and any resulting unfairness to a party.
[42]At least in this case, the availability of alternative forms of information gathering is not a consideration of any moment. …
[43]… the availability of other evidence that may tend to prove, to the same or some other degree, the information contained in the privilege affidavit – “alternative evidence” or an absence of “commonality” of evidence - may indicate that it is not in the interests of justice that the information over which privilege is claimed be disclosed. If the information over which the privilege is claimed is common with information already available to the party with the benefit of the disclosure order, or if alternative information relevant to the efficacy of the freezing order is in the possession of the party with the benefit of the disclosure order, the interests of justice may not require the information to be disclosed because the relative importance of the information over which privilege is claimed is diminished. …
[40]Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 392 ALR 1, [40]-[43] (citations omitted).
As discussed by Gordon J, when determining whether the interests of justice require disclosure, the factors to be balanced include the availability of other evidence and the ‘relative importance’ of the evidence the subject of the claim for privilege.[41]
[41]Ibid, [43].
In Director of Public Prosecutions v Roberts (Ruling No 7),[42] a ruling which concerned s 128 of the Evidence Act and evidence proposed to be given in a murder re-trial, Kaye JA summarised the principles to be applied as follows:[43]
[18]The requirement, that the court must be satisfied that it is in the interests of justice that the witness must give that evidence, is a relatively high standard, which reflects the fact that the provisions of s 128 of the Act, to a significant extent, impinge a basic and long–standing common law right. The significance of the evidence in the case is an important factor in determining whether the interests of justice require that the witness give that evidence. Plainly, the seriousness of the charges against the accused are also a significant consideration in determining that issue. In addition, it is relevant to take into account the question whether the witness in question is subject to criminal proceedings.
[42][2022] VSC 60.
[43]Ibid, [18] (citations omitted).
In Roberts-Smith (No 28), a defamation trial, Besanko J said the following about s 128(4)(b):
[31]Section 128(4)(b) requires the Court to be satisfied that the interests of justice require that the witness give the evidence. This is a high standard and higher than if the paragraph had provided that the interests of justice favour that the witness give the evidence. This was noted by Bathurst CJ in Gedeon as follows (at [286]):
Second, the requisite standard provided for in s 128(4)(b) of the Evidence Act is that the interests of justice require admission of the evidence. It is not enough that the evidence be relevant and in this case satisfy the exception to the credibility rule in s 103 of the Evidence Act. This relatively high standard of satisfaction is consistent with the fact that the legislation to a significant extent abrogates a basic common law right.
[32]In Cureton v Blackshaw Services Pty Ltd [2002] NSWCA 187, Sheller JA (with whom Meagher JA and Beazley JA agreed) said (at [37]):
I find it unusual and troubling that the cross-examination of Mr Hicks should have been stopped. S128 enabled the Judge to require the witness to give evidence if he was satisfied that the interests of justice required that the witness do so even if the evidence might tend to incriminate the witness under Australian law. He was further empowered to cause the witness to be given a certificate in respect of the evidence. The interests of justice in this context should be construed broadly and would permit questions to be put going to credit, particularly where credit was important and where the credit of the chief witness on the other side was to be impugned for conduct similar to that to be tested in cross-examination.
[33]The factors which are relevant to the application of the criterion in s 128(4)(b) as identified in the cases are conveniently listed in Odgers S, Uniform Evidence Law (16th ed, Lawbook Co, 2021) (at pp 1178–1179) and counsel for Person 14 referred me to that list.
[34]The focus of the submissions of the applicant and Person 14 was, respectively, the importance of the evidence in the proceeding and effects on the witness not ameliorated by the provision of a certificate should the witness be required to give evidence. That this second matter is a relevant consideration was confirmed in Gedeon (at [292] per Bathurst CJ). In R v Lodhi [2006] NSWSC 638; (2006) 199 FLR 328, Whealy J said the following (at [55]):
But the certificate does not give absolute protection. There are, for example, the indefinable but no doubt real prejudices that may result where a witness has given evidence of the kind dealt with in s 128 which may as a consequence bring him into disfavour with some sections of the community or people who have previously held the witness in high regard. Secondly, the protection may not extend to the consequences that may be involved in disciplinary proceedings instituted against professional persons or even, at a wider level, against members of the general community. In the present case, particularly, there is the subtle but real damage that can be done to the rights of Ul-Haque if the entirety of the Crown case against him, in effect, becomes the material evidence he is required to give against the accused. The position is made the worse, I consider, in the particular circumstances where he is seeking to overturn those very records of interview and have them excluded from his trial. It is not inconceivable that a successful cross-examination by Mr Boulten SC in the present matter may disrupt and indeed, shatter the professional bond of confidence existing between Ul-Haque and his counsel of choice. The very substance of the questioning envisaged by Mr Boulten SC might well lead to a question whether the matters to be put to Ul-Haque fall into the category of material that is “oppressive and unjust” in the sense mentioned by Toohey J in Hamilton’s case.[44]
[44]Roberts-Smith v Fairfax Media Publications Pty Ltd (No 28) [2022] FCA 115, [31]-[34].
The authorities referred to in argument in the present case concerning s 128, whether concerning civil or criminal proceedings, involved a person not a party to the litigation itself being called as a witness and that person claiming the privilege against self-incrimination. The exception is the decision in Curetonv Blackshaw Services Pty Ltd (‘Cureton’).[45] The reasons for decision of the trial judge under appeal in Cureton[46] do not include a discussion of the s 128 issue referred to by Sheller JA in the Court of Appeal.[47] However, as recorded in the trial reasons:
The determination of the issues in this case depends essentially upon the credit of Mr Hicks and Mr Cureton.[48]
[45][2002] NSWCA 187.
[46]Blackshaw Services Pty Ltd v Cureton [2001] NSWSC 548.
[47]Cureton v Blackshaw Services Pty Ltd [2002] NSWCA 187, [37], quoted by Besanko J in Roberts-Smith v Fairfax Media Publications Pty Ltd (No 28) [2022] FCA 115, [32], reproduced above.
[48]Blackshaw Services Pty Ltd v Cureton [2001] NSWSC 548, [27].
The observations of Sheller JA on appeal in Cureton, with whom Meagher JA and Beazley JA agreed, show that it will be important in a case where credit is a significant issue, and where both sides seek to impugn the credit of the key witness who is either an opposing party or the key witness for that party, to permit questions to be put going to credit. That is the case even if the evidence given might tend to incriminate the witness under Australian law.
The ability to grant a s 128 certificate to a witness who is required to give evidence will be an important consideration. That is so although the effects on the witness are not entirely ameliorated by the provision of a certificate. The balance struck by giving a s 128 certificate was discussed by Keogh J in Villan by reference to earlier authority:[49]
[49]Villan v State of Victoria [2021] VSC 354, [16]-[18] (citations omitted). Note also that, in Lee v New South Wales Crime Commission [2013] HCA 39; (2013) 251 CLR 196, French CJ at [54] expressed his agreement with the remarks of Hayne and Bell JJ in X7 v Australian Crime Commission [2013] HCA 29; (2013) 248 CLR 92, [124].
[16]The balance struck by giving a certificate under s 128(5) does not provide the witness with complete protection.In X7 v Australian Crime Commission, Hayne and Bell JJ described the effect of compulsory pre-trial examination on the criminal process:
Requiring the accused to answer questions about the subject matter of a pending charge prejudices the accused in his or her defence of the pending charge (whatever answer is given). Even if the answer cannot be used in any way at the trial, any admission made in the examination will hinder, even prevent, the accused from challenging at trial that aspect of the prosecution case. And what would otherwise be a wholly accusatorial process, in which the accused may choose to offer no account of events, but simply test the sufficiency of the prosecution evidence, is radically altered. An alteration of that kind is not made by a statute cast in general terms. If an alteration of that kind is to be made, it must be made by express words or necessary intendment.
(iii)The allegations made by Timeless Sunrise were denied by the Jason Brandi parties. They alleged, amongst other things, that the documents dated 1 July 2014 relied upon in support of the Timeless Sunrise claims were backdated and were created years after the date they bear. Jason’s signature and also Tina’s signature on certain of the documents dated 1 July 2014 are alleged to have been forged.
(d)In the Zigaroo proceeding, the claim by David and Tina to 306 Ascot Vale Road is a claim that depends upon the grant of equitable relief.[171] Representations alleged to have been made in the lead-up to David and Tina’s wedding in 1998 are critical to the claim. Representations alleged to have been made by Ernie are contested by Fernanda and Jason.
(e)Credit issues also loom large in relation to counterclaims by the Jason Brandi parties. It is sufficient to briefly refer to some of those counterclaims where credit will be a significant issue:
(i)The claims for breach of fiduciary duty concerning the CEG loan and the Atida mortgage.
(ii)The Leaning Back loan claim alleging dishonest misrepresentation by David and reliance by Jason.[172]
(iii)The claims for $593,532 by PDJ Crew against David for repayment of a loan that David denies. The FY15 and FY16 accounts of the PDJ Crew Unit Trust are relevant to this claim.[173] Those accounts were either prepared by or under the supervision of David or Brandi & Co.
(iv)The claim for breach of fiduciary duty against David concerning loans to David used to pay debts of ITM between July and September 2009.[174]
(v)The claims by PDJ Crew, Jason and Tania against David alleging that David personally guaranteed loans to ITM at interest rates of 20% with a higher rate of 30%.[175]
[171]See the Plaintiffs’ ‘Amended Outline of Opening Submissions’, Submission in Brandi v Zigaroo Pty Ltd (ACN 006 005 401) (Administrators Appointed), S ECI 2021 04644, 12 August 2022, most recently updated on 2 September 2022.
[172]2AC, [26B]-[26J], (including against Brandi & Co).
[173]Ibid, [12B]-[12J].
[174]Ibid, [12K]-[12O], noting that no expert evidence has been led in support of this claim and the detriment alleged to have been suffered by PDJ Crew and/or Jason appears to be wholly unparticularised.
[175]Ibid, [13]-[19B] and [20]-[26A].
As will be apparent by way of example concerning the claim by Mr Landlord Co, to which the now abandoned claim by Timeless Sunrise is relevant, and to the discussions concerning the PDJ Crew Unit Trust claim which relies in part upon at least ten years of conduct, the fact that claims have now been abandoned by the David Brandi parties does not mean they are no longer relevant. In addition to their relevance to substantive issues on the pleadings, the abandonment of previous claims is also relevant to credit.
It is correct, as submitted on behalf of David, that s 103 of the Evidence Act limits cross-examination as to credit to cross-examination where the evidence in question ‘could substantially affect’ the assessment of credibility of the witness. The criteria in s 103(1) and (2) needs to be considered by reference to each individual matter where credit is an issue. For example there needs to be separate consideration of the Mr Landlord Co claim and separate consideration of the allegations relating to the Leaning Back loan. It may be necessary also to consider the application of s 103(1) and the specific matters in s 103(2)(a) and (b) in the course of cross-examination of David, Jason and other family members as to their credit more generally. It is not possible to rule in advance about those matters.
Consideration: s 128(4)(b)
I have previously identified the principles to be applied when determining whether the interests of justice ‘require’ David to answer questions about particular matters or to give specific evidence. Each of the matters identified in the Objection Schedule and item 1.6 require individual consideration.
As I am not satisfied that s 128(2) is made out by David in relation to items 1.2, 1.3, 1.4(b), 1.4(c) and 1.5, it is strictly unnecessary for me to consider those matters for the purposes of s 128(4)(b). As submitted by the parties concerning items 1.4(c) and 1.5, it may be premature to rule in relation to some or all of the objections at this stage. However, the s 128(4)(b) issues have been canvassed in considerable detail. In the interests of a fair and time efficient trial and where the issues have been fully debated, it is appropriate to either rule on or to express such views as I am presently able concerning the interests of justice requirement in s 128(4)(b) in relation to each individual topic. To do so is consistent with the overarching purpose specified in s 7(1) of the Civil Procedure Act 2010 (Vic) (‘CPA’) to which the Court must seek to give effect as provided in s 8 of the CPA.
When considering the interests of justice, it is important to recognise that David stands in a different position to a number of the witnesses in the cases concerning s 128 and analogous provisions to which the Court has been referred. As witnesses only, those persons do not have the same vested interest in the outcome of the litigation as a litigant or a person who controls or stands behind a corporate litigant.
David has chosen to initiate and maintain the claims in the Timeless Sunrise and other proceedings where he is a plaintiff. For approximately three years, David’s personal claims and those of Timeless Sunrise in the Timeless Sunrise proceeding were maintained in the face of responsive allegations of forgery in the defence. Those allegations have been supported since November 2021 by the expert report of Ms Holt. Following the split trial ruling and evidence being adduced from Mr Skerrett and Ms Holt, David was afforded the opportunity to consider how he wished to proceed. He was entitled to that opportunity so as to ensure that he and the David Brandi parties were afforded a fair trial in circumstances where pleadings filed on behalf of those parties had declined, in large measure, to respond to allegations on the ground that to do so might incriminate either David or corporate entities associated with him. However, the previous maintenance and pursuit of those claims until after Mr Skerrett and Ms Holt’s evidence cannot be simply ignored when it comes to the interests of justice in s 128(4)(b).
David has also chosen to defend claims made against him personally by the Jason Brandi parties. As was the case in Cureton, it is relevant to proceed on the basis that the credit of both David and Jason is directly in contest concerning a number of issues in the proceedings.
The abandonment by the David Brandi parties of substantive claims on 2 September 2022 and again in oral submissions on 6 September 2022 in the 4ASC appears to have been a strategic decision taken with objectives that include David not being cross-examined about issues raised in defences to claims previously made by him and by the David Brandi parties. Those issues include forgery and backdating of documents including concerning the 1 July 2014 dated documents relating to the previously alleged transfer of units in the PDJ Crew Unit Trust by MPG to Timeless Sunrise.
Although the state of pleadings remains uncertain due to the unresolved issues concerning the 3FAD served on 8 September 2022, as the earlier discussion of credit issues illustrates, a number of claims deleted by the 4ASC remain relevant. In expressing my views as to s 128(4)(b), I proceed on the basis of the 4ASC, the 2FAD and other existing and unchallenged pleadings.
Before turning to the individual items in the Objection Schedule, it is important to draw attention to s 128(6). That section provides an important safeguard. It permits the court to cause a witness to be given a certificate if the objection has been overruled and if, after the evidence has been given, the court finds there are reasonable grounds for the objection.
1.1: Atida mortgage
That s 128(1) and (2) are satisfied in relation to item 1.1, the Atida mortgage is accepted by the Jason Brandi parties.
David has been charged with a very serious criminal offence that relates to the Atida mortgage. That proceeding and that charge remains outstanding. While the charge expressly refers to the forgery of the signature of his brother Jason; on the unchallenged evidence already given, the signature of Mr Skerrett was also forged in connection with the Atida mortgage and CEG loan.
I accept that there remain issues on the existing and foreshadowed pleadings by the Jason Brandi parties which mean that the facts concerning the Atida mortgage are directly relevant on the pleadings. They are directly relevant to the claim by the Jason Brandi parties for breach of fiduciary duty which, if successful, is likely to result in an order for the payment of $173,000 in compensation. Despite the thrust of submissions on behalf of the David Brandi parties, I regard the claim for $173,000 as a substantial claim. However, it is also the case that there is other evidence available in support of this claim for breach of fiduciary duty.
The other available evidence includes email and documentary communications and evidence concerning the allocation of funds which support a finding that it was David who procured the Atida mortgage, gave instructions to solicitors concerning it and caused it to be registered.
It is important, when seeking to determine where the interests of justice lie, to note that the claim for breach of fiduciary duty does not depend solely or even primarily upon the forgery allegation. The claims for breach of fiduciary duty concerning the Atida mortgage, which rely upon the forgery, can be made out on other bases, including lack of consent and authority, even if the forgery itself is not proved. That goes to the significance or otherwise of the evidence in respect of which David seeks to invoke s 128.
Weighing the significance of evidence from David, if compelled to give evidence, concerning the subject matter of the Atida mortgage in relation to the claim for breach of fiduciary duty, against the seriousness of the existing criminal charge, the interests of justice do not require that David give evidence about that matter.
1.1 CEG
The next issue concerns the CEG loan matter. That s 128(1) and (2) are satisfied concerning the CEG loan is agreed by the parties. The CEG loan and the execution of associated documents and events occurred five months prior to the Atida mortgage.
To determine the significance of evidence from David concerning this matter requires a consideration of the pleadings and also of credit issues.
Paragraph 7 of the 4ASC relies upon conduct of both brothers over a long period ending 29 November 2018. The CEG loan is directly relevant to the PDJ Crew Unit Trust claim. There is evidence that Mr Skerrett’s signature was forged in connection with the CEG loan transaction. The proposition is pleaded by the David Brandi parties that, by reason of conduct, the two brothers, or their respective corporations, are to be regarded as equal unitholders in the PDJ Crew Unit Trust. It would appear inconsistent with this proposition for one of those brothers to unilaterally borrow money on the security of the CEG loan in May 2018 without the knowledge or consent of the other brother.
The CEG loan is also relevant to credit issues arising from the conduct relied upon in paragraph 7 of the 4ASC. Issues of credit arise in these proceedings in relation to a number of matters of substance including whether the establishment of the PDJ Crew Unit Trust, which is central to the David Brandi parties’ claim to Newsom Street, is to be implied or inferred from the conduct of the parties. There will be credit challenges to Jason concerning his plea in response to paragraph 7 of the 4ASC. The situation concerning the issues raised by that allegation as particularised and the response to it is similar to the competing credit challenges discussed by Sheller JA in Cureton.
This is not a case where the David Brandi parties’ claims depend upon the PDJ Crew trust deed alone. The particulars to paragraph 15 of the 4ASC continue to refer to the contract of sale for the Adjacent Land; a document that, according to Jason, was forged.[176] David’s first witness statement continues to refer to that purchase. Paragraph 16 of the 4ASC is deleted concerning the contract of sale of the Adjacent Land, but paragraph 17, which deals with the settlement of the contract of sale for the purchase of the Adjacent Land, remains. Whether or not Jason’s signature was forged on that document is a matter that is relevant. The CEG loan involves forgery allegations concerning the same property.
[176]Jason Brandi parties opening submissions, Appendix B.
In the 2AC, the Jason Brandi parties allege that the CEG loan, secured over Newsom Street, was obtained without the knowledge of PDJ Crew or Jason and that no person acting with Jason’s authority instructed Dorsia Legal, the solicitors involved in the transaction, to act on behalf PDJ Crew or Jason in connection with that loan or the lodging of the related caveat.[177] It is alleged that David’s breach of duty concerning the CEG and Atida transactions caused detriment to PDJ Crew and/or Jason.[178]
[177]2AC, [9H] and [9I].
[178]Ibid, [12A].
From the chronology of events, it appears that the damages of $173,000 now claimed for breach of fiduciary duty do not relate to the CEG loan and related security but solely relate to the Atida mortgage. That is the case because it was not until after the Atida mortgage was registered that, according to the Jason Brandi parties’ pleadings, Jason came to learn either of that mortgage or of the earlier CEG loan. Funds from the Atida transaction were applied to discharge the CEG loan.
In those circumstances the CEG loan is not a matter which founds a claim by the Jason Brandi parties to relief, whether in damages or otherwise.
However, the Jason Brandi parties are entitled to cross-examine in relation to credibility subject to s 103 of the Evidence Act. The critical issue in s 103 is whether the evidence sought to be adduced in cross-examination ‘will substantially affect the assessment of credibility of the witness’. Given the seriousness of the allegation concerning the CEG loan documents and the emphasis placed by the Jason Brandi parties upon the credibility of David, or lack of it, and given the substantial credit issues in the case, the ability of the Jason Brandi parties to cross-examine David as to credit is important to ensuring a fair trial of these proceedings.
Taking the relevance of the CEG loan to both the pleaded issues and to the credit issues, I regard the subject matter of the CEG loan as significant. It is necessary to weigh up against that significance, the risk of criminal prosecution of David in relation to the CEG loan.
I regard the risk of criminal prosecution of David concerning the CEG loan as a low risk. There is no evidence that the lender alleges that it has suffered loss. There is nothing to suggest that CEG paid compensation to any person. The events concerning the CEG loan are five months earlier than those concerning the Atida mortgage. It is reasonable to proceed on the basis that Jason will seek to urge the police to act against David concerning the CEG loan. However, there is no evidence of any current police investigation concerning the CEG loan or that the police are contemplating, let alone likely, to institute criminal proceedings concerning the CEG loan. That is so despite the reference in the course of the hearing by the Jason Brandi parties to the prospect of charges concerning the Atida mortgage being ‘ratcheted up’.[179]
[179]Transcript, 981.
In all the circumstances I consider that the interests of justice require that David answer questions in cross-examination relating to the CEG loan. Any evidence that he is required to give in relation to that matter will be the subject of a certificate pursuant to s 128.
1.4(a) Dorsia Legal
I regard the subject matter of item 1.4(a) as closely intertwined with the Atida mortgage. Just as the interests of justice do not require that David give evidence in relation to the Atida mortgage and associated documents, the interests of justice do not require that evidence be given concerning his directorship of PDJ Crew. There is other evidence available concerning this matter. The fact the ASIC register is backdated by 10.5 years appears from the document itself. I am not satisfied that the interests of justice ’require’ that David give evidence about item 1.4(a).
1.2 The Leaning Back Loan
The Leaning Back loan the subject of paragraphs 26B – 26J of the 2AC concerns the claim by the Jason Brandi parties against David for breach of fiduciary duty, including an allegation that David acted dishonestly by representing that the loan was from a company controlled by ‘a wealthy Indian investor’[180] when in fact the loan was from a company controlled by David. The loan was entered into in 2016 and was secured by an unregistered mortgage and caveat over Newsom Street. The relief sought is an account of profits estimated to be approximately $300,000 noting that, in VCAT proceeding BP908/2019 (which preceded proceeding S ECI 2020 04804), payment of $2,357,215.24 was allegedly made to Leaning Back in respect of the $2 million loan.[181]
[180]2AC, [26C].
[181]Ibid, at [26I], particulars.
In response to allegations concerning this matter, in the 7 September 2022 Defence to 2AC, David admits the loan agreement. He alleges that the loan was repaid in 2018, but otherwise does not plead to the allegations on the grounds that he claims privilege against self-incrimination and/or exposure to penalty.
As earlier stated, I am not satisfied that the threshold in s 128(2) has been established by David in respect of this matter. Leaving that issue to one side, the interests of justice clearly favour that David be required to give evidence about this matter should questions about it be put to him in cross-examination.
The Leaning Back loan is an issue that arises directly on the pleadings and is the subject of a discrete claim for relief.
There is no evidence that Jason or any other person has raised issues concerning this matter with the police, with ASIC or with any other relevant regulatory authority. Even if Jason were to do so, I am not satisfied that the likelihood of steps being taken to prosecute an offence of dishonesty under ss 82 and/or 85 of the Crimes Act concerning this matter is anything other than very low. Although the allegation of dishonesty which forms part of the matters relied upon in respect of the Leaning Back loan claim is a very serious allegation, it is not uncommon for allegations of this type to be made in commercial litigation. It is much less common for such allegations to end up the subject of separate criminal proceedings.
If it becomes apparent after David has been cross-examined about this topic that it is appropriate to grant a certificate in respect of his evidence, that can be done. However, it is not appropriate to prevent cross-examination about this matter in advance. The interests of justice require that David give the evidence.
1.3 Forged Signatures of Jason and Tina Brandi
Accounts of PDJ Crew Unit Trust for the 2015 and 2015 Financial Years
In relation to item 1.3, it is necessary to differentiate between the FY15 and FY16 accounts and the other alleged forgeries in David’s responsive Appendix B. The 2AC includes an allegation that David signed the financial statements of the PDJ Crew Unit Trust for FY15 and FY16.[182] It is alleged that the accounts of the PDJ Crew Unit Trust dated 30 June 2015 signed by David and lodged with the ATO recorded a loan between David and PDJ Crew (the ‘David Brandi Loan’) in the amount of $593,532.[183] Further, and in the period from 30 June 2015 to 30 June 2016, PDJ Crew did not receive any repayment for the David Brandi Loan and $593,532 remains owing by David.[184] However, David signed the accounts of the PDJ Crew Unit Trust for the year ended 30 June 2016 which showed the David Brandi Loan to have been fully repaid.[185] In the particulars to paragraph 19(a)(ii) of the 2FAD, the Jason Brandi parties allege that:
Jason signed the financial documents of the PDJ Crew Unit Trust for the financial years ended 30 June 2008 and 30 June 2009. He did not sign the financial documents or tax returns for the PDJ Crew Unit Trust for the years ended 30 June 2010, 30 June 2011, 30 June 2012, 30 June 2013, 30 June 2014, 30 June 2015 or 30 June 2016. His signature on those documents has been forged.[186]
[182]2AC [12H]-[12J].
[183]Ibid, [12H].
[184]Ibid, [12H]-[12J].
[185]Ibid, [12I].
[186]2FAD, [19(a)(ii)].
The alleged forgeries and the FY15 and FY16 accounts are central to the pleaded claim against David for repayment of the $593,532 loan. There is no evidence that these matters have been reported to the police or that a criminal or ASIC investigation, or charges, is likely. I assess the risk of any criminal prosecution as very low. The interests of justice require that David give evidence about the subject matter of the FY15 and FY16 accounts.
Other Forged Signatures: David’s Responsive Appendix B
The balance of the alleged forgeries itemised in David’s responsive Appendix B, approximately 100 in number, include allegedly forged documents that are and others that are not (and have not previously been) referred to in the pleadings.
On 5 September 2022, the David Brandi parties provided David’s responsive Appendix B to the Jason Brandi parties table of alleged forgeries. David’s responsive Appendix B includes a colour code which breaks down the 108 forgeries the subject of Ms Holt’s original report dated 8 November 2021 into 9 different categories. Those categories are as follows:
(a)Westpac Banking documents;
(b)Sale of land contracts/documents;
(c)PDJ Crew Unit Trust transfer of unit documents;
(d)Valuation of Newsom Street;
(e)Minutes of deemed meeting of PD J crew;
(f)PDJ Crew Unit Trust tax returns/financial statements (including items relating to the FY15 and FY16 tax returns);
(g)Notice of trust acquisition of an interest in land;
(h)Transfer of land form; and
(i)CEG/Atida documents.
In light of earlier findings, it is unnecessary to say anything further about category (i); the CEG/Atida documents or about the FY15 and FY16 accounts that form part of category (f).
When assessing the significance of the allegedly forged documents the starting point is the pleadings.
The category (a) documents relating to Westpac are directly relevant to the allegation in paragraph 12B of the 2AC which concerns an allegation that Jason’s signature was forged on the 21 February 2008 loan application to Westpac on behalf PDJ Crew. Documents 1 – 10 in Jason’s Appendix B concern this issue. Paragraph 12B is part of the pleading that concerns the claim against David personally for repayment of the $593,532 loan. The loan issue remains a live issue on the pleadings. For similar reasons to those given concerning the FY15 and FY16 accounts, the interests of justice require that David gives evidence about the 21 February 2008 Westpac loan application. The prospects of any criminal charge under ss 81, 82 or 83A of the Crimes Act to which David’s responsive Appendix B refers are low to very low.
The category (b) documents include documents 11 – 14 which concern the contract of sale the purchase of the Adjacent Land in September 2013 and related documents. Documents 47 and 48 concern the 11 August 2016 contract of sale for 86 Cooper Street, Essendon and documents 49 and 50 concern the contract of sale dated 11 August 2016 concerning 48 Holmes Road, Moonee Ponds.
Paragraph 16(c) of the 2FAD alleges that Jason’s signature was forged on the contract of sale to purchase the Adjacent Land. David’s responsive Appendix B refers to ss 82 and 83A of the Crimes Act. The 4ASC deleted paragraph 16 relating to that contract of sale. However, the allegedly forged contract of sale remains a matter directly referred to in the particulars to paragraph 15 of the 4ASC. The events concerning the purchase of the Adjacent Land are referred to in David’s first witness statement and are also relevant on the pleadings, including to paragraph 7 of the 4ASC. There are no criminal charges threatened or likely concerning documents 11 – 14. The prospects of any criminal charge are very low. The interests of justice require that David answer questions concerning them.
The properties at 86 Cooper Street, Essendon and 48 Holmes Road, Moonee Ponds are the subject of proceeding S ECI 2020 04804 between David as the moving party and Jason as the respondent. That proceeding was initially instituted in VCAT (formerly proceeding BP908/2019). There is no issue raised in the points of claim or in the points of defence in the former VCAT proceeding alleging that Jason’s signature on either contract of sale was forged. I proceed on the basis that documents 47 – 50 are not relevant on pleadings. The significance of the documents themselves, even if forged, is not apparent other than going to David’s credit more generally. Although there is no evidence of any criminal charges or investigation, assuming s 128(1) and (2) were shown to be satisfied concerning these contracts (and I am not satisfied that is the case), given the apparent lack of significance of documents 47-50, I would not consider that the interests of justice would require David to answer questions relating to either of those contracts.
The category (c) documents comprise of the PDJ Crew Unit Trust Declaration of Trust and the PDJ Crew Unit Trust Memorandum of Resolutions of the sole director, both dated 1 July 2014. Prior to 2 September 2022 when Timeless Sunrise abandoned the claims previously made by it in respect of the PDJ Crew Unit Trust, these two documents were of considerable importance. It is alleged by the Jason Brandi parties that both of these documents were brought into existence in approximately 2019 and were backdated. There are also forgery issues being raised in relation to them. David’s responsive Appendix B identifies as possible offences or penalty provisions the Crimes Act ss 81, 83A, Corporations Act ss 590(1)(c)(i), 596(1)(b) (qua MPG director).
I regard the category (c) documents as documents of considerable significance to the issues in the Timeless Sunrise proceeding. They relate to the now abandoned claims by Timeless Sunrise. They are relevant to the ‘chain of title’ to units in the PDJ Crew Unit Trust asserted from time to time by the David Brandi parties. The primary claim of those parties, until 2 September 2022, was that these documents were effective to cause a transfer of the units in the PDJ Crew Unit Trust from MPG to Timeless Sunrise and that Timeless Sunrise continued to hold those units. That claim has been abandoned in favour of a claim that the documents are no longer relevant and, presumably, that the transfer they purport to record never took place. Instead, the claim prosecuted by the David Brandi parties is that Mr Landlord Co holds the units following the voluntary liquidation of MPG in 2019. It is difficult to see how these now abandoned claims sit comfortably alongside the Mr Landlord Co claims, earlier pleaded in the alternative, which has now become the David Brandi parties’ primary claim to the units in the PDJ Crew Unit Trust and to Newsom Street.
No charges have been laid and there is no evidence of investigation by the police or by ASIC concerning the category (c) documents. Given their significance for claims that are central in the proceedings, the interests of justice require that David answer questions directed to him concerning these documents. It seems likely the same will be the position concerning Tina, who is also implicated in these documents, although a decision as to Tina can be made if she also seeks the protection of s 128 in relation to these matters.
Item (d), the valuation of Newsom Street dated 11 November 2014, being document 17, is not a document to which reference was made during the hearing. Potential contraventions of Crimes Act ss 81, 82 and 83A are noted in David’s responsive Appendix B. As the document was not considered during the hearing, I am not in a position to express a view about whether the interests of justice require David to answer questions concerning the valuation.
Item (e), the minutes of claimed meeting of PDJ Crew, documents 18, 43, 107 and 108, are likely to be of significance concerning the allegations at paragraph 7 of the 4ASC and to the claims by Mr Landlord Co. Offences and penalty provisions identified in David’s responsive Appendix B are ss 82 and 83A of the Crimes Act and ss 1307 and 1308 (per operation of s 347A) of the Corporations Act. On the basis of the information currently available, there being no evidence of actual police or ASIC or other regulatory authority investigation or prosecution concerning these documents, I consider the interests of justice require David to answer questions concerning them.
Item (f) includes the FY15 and FY16 accounts. These documents have been separately addressed. The remaining documents in this category, items 19-40, 46 and 53, are significant. They comprise financial documents of or concerning the PDJ Crew Unit Trust that the sole director of PDJ Crew, Jason, says were not signed by him. Offences and penalty provisions identified in David’s responsive Appendix B are s 83 of the Crimes Act, ss 137.1 and 137.2 of the Criminal Code and s 1307 of the Corporations Act. The documents numbered 19 – 40, 46 and 53 are relevant to the pleadings. The significance of these to issues central to the case concerning the PDJ Crew Unit Trust outweighs the risk of criminal investigation or prosecution. The interests of justice require that David respond to questions about these documents.
Category (g), which contains document 41, is significant. Paragraph 9(a) of the 4ASC alleges that land tax was paid ‘from mid 2017’ on the basis that Newsom Street is an asset of the PDJ Crew Unit Trust. The land tax form on which Jason’s signature is allegedly forged is dated 6 March 2015. David’s responsive Appendix B identifies possible breaches of ss 52, 57 and 60 of the Taxation Administration Act 1997 (Vic), along with s 83A of the Crimes Act.
There is no evidence that the SRO propose to take criminal or other action in relation to this matter. There is no evidence of an investigation. In the circumstances, the significance of the document to issues in the case outweighs any risk of criminal prosecution. The interests of justice require that David give evidence concerning this document.
In relation to category (h), being document 42 – the transfer of land document concerning the Adjacent Land, is alleged to be a forgery. Exposure to possible prosecution for breach of s 83A of the Crimes Act is identified in David’s responsive Appendix B. Cross-examination about the transfer is likely to be closely related to cross-examination concerning the Adjacent Land and issues concerning the PDJ Crew Unit Trust allegations in 4ASC at paragraph 7. There is no evidence of a police report or an investigation of offences relating to this document. I consider the interests of justice require that evidence is given by David about this matter.
Item 1.4(b) Documents relating to the appointment of Erminio Brandi
I have found that s 128(2) is not satisfied concerning item 1.4(b). If I am incorrect in that assessment, I nonetheless consider the interests of justice require that; if questioned, David must give evidence about this matter. The matter is primarily one going to credit, but this is a case full of credit issues. The circumstances of the various appointments of Ernie are also likely to be relevant to issue 1.4. The course of cross-examination will determine whether questions relating to these issues are permissible having regard to s 103(1) and (2) of the Evidence Act.
Item 1.4(c) ITM: Documents provided to liquidators and others and 1.5 ITM and Sputnik: Transfer of assets
As earlier indicated, I am not persuaded that s 128(2) is satisfied concerning either of these matters. For that reason, and because detailed submissions were not directed to the interests of justice question concerning these items, and because both parties consider ruling on items 1.4(c) and 1.5 at this stage to be premature, I will say nothing further on either of these topics.
Item 1.6 ANZ Mortgage
It appears that a criminal investigation is under way concerning the ANZ mortgage. That this appears to be the case is supported by the combination of the reference in an email dated 20 June 2022, ostensibly from Fernanda but, it appears, drafted and sent by Jason, that referred to there being nothing to stop Fernanda going to the police in relation to the ANZ mortgage[187] and correspondence sent on 29 June 2022 also ostensibly from Fernanda.[188] In the 29 June 2022 email, the following statements appear:
I can also confirm that I have attended the Mooney Valley Crime Investigation unit at Victoria Police and reported the fraud via a Fraud Report Form and provided all the evidence to the police whom have accepted the evidence and have instructed me that they have now begun an investigation into the behaviour and conduct of the plaintiff.
I can also confirm that the ANZ have agreed with me that the loan was executed without my knowledge or consent and furthermore have confirmed that they only had dealings with the plaintiff (David Brandi) and his staff.[189]
[187]Court Book, 9861.
[188]Ibid, 9876,
[189]Ibid, 9877.
Counsel appearing for David and Tina in the Zigaroo proceeding submitted that the interests of justice do not require that David give evidence about these matters. It was submitted that the proposed further amended statement of claim in the Zigaroo proceeding (post 2 September 2022) does not rely on the ANZ mortgage. Further, although the defence previously filed on behalf of Zigaroo alleges that Fernanda’s signature on the mortgage was a forgery, it does not expressly identify the alleged forger as David. That is in contrast to the substance of an email sent on 26 August 2022 by the solicitors acting on behalf the Jason Brandi parties who directly alleged the forgery to have been that of David.
The ANZ mortgage was relied upon by David and Tina in the previous amended statement of claim in the Zigaroo proceeding. That is no longer the case. Previous references to it were deleted on 2 September 2022. While it remains relevant to the equitable relief claimed due to the fact it was on title, its level of significance is not high when regard is had to the matters relied on by David or Tina in support of their claim. Nor is the ANZ mortgage of particular significance to the outcome of the Zigaroo proceeding or to the relief sought.
In the circumstances, the interests of justice do not require that David gives evidence concerning the ANZ mortgage.
Disposition
I have determined that s 128(1) and (2) are satisfied, as is agreed, in relation to the Atida mortgage, the CEG loan and item 1.4(a). I am satisfied the interests of justice to which s 128(4)(b) refers do not require David to answer questions concerning the Atida mortgage or matter 1.4(a). The interests of justice do require David to answer questions concerning the CEG loan.
I am satisfied concerning the ANZ mortgage, item 1.6, that ss 128(1) and (2) are satisfied and that the interests of justice in s 128(4)(b) do not require David to give evidence about this issue.
I am not satisfied concerning items 1.2, 1.3 forgeries (except those that relate to the Atida mortgage), 1.4(b), 1.4(c) and 1.5 that reasonable grounds exist for the objection to David giving evidence about those matters. In any case, I consider that the interests of justice in s 128(4)(b) require that David give evidence concerning items 1.2, 1.3 (forgeries) and 1.4(b).
I do not agree that s 128(2) is satisfied in relation to items 1.4(c) and 1.5. I do not express any opinion about whether, if on a later application s 128(2) were to be satisfied, the interests of justice require that David gives evidence concerning those items, or either of them.
SCHEDULE OF PARTIES
TIMELESS SUNRISE PTY LTD (ACN 126 299 634)
as trustee for DAVINA FAMILY TRUST
First Plaintiff
DAVID BRANDI
Second Plaintiff
MR. LANDLORD PTY LTD (ACN 116 921 834)
as trustee for BRANDI FAMILY TRUST
Third Plaintiff
-and-
BIGJ ENTERPRISES PTY LTD (ACN 084 199 084)
as trustee for JASON BRANDI FAMILY TRUST
First Defendant
PDJ CREW PTY LTD (ACN 111 546 519)
as trustee for PDJ CREW UNIT TRUST
Second Defendant
JASON BRANDI
Third Defendant
ZIGAROO PTY LTD (ADMINISTRATORS APPOINTED) (ACN 006 005 401)
as trustee for MK NO. 13 TRUST
Fourth Defendant
JAG GROUP HOLDINGS PTY LTD (ACN 101 293 065)
as trustee for JAG GROUP UNIT TRUST
Fifth Defendant
TARWIN GROUP PTY LTD (ACN 107 333 817)
as trustee FOR TARWIN GROUP UNIT TRUST
Sixth Defendant
TARWIN RIVER HOLDINGS PTY LTD (ACN 107 325 762)
as trustee FOR TARWIN RIVER HOLDINGS UNIT TRUST
Seventh Defendant
THE LITTLE MAN HOLDINGS PTY LTD (ACN 114 659 639)
Eighth Defendant
REGISTRAR OF TITLES
Ninth Defendant
(by original proceeding)
JASON BRANDI
First Plaintiff by counterclaim
PDJ CREW PTY LTD (ACN 111 546 519)
AS TRUSTEE FOR PDJ CREW UNIT TRUST
Second Plaintiff by counterclaim
and
DAVID BRANDI
First Defendant by counterclaim
CHILDS PLAY INTERNATIONAL PTY LTD (ACN 140 794 547)
TRADING AS BRANDI & CO
Second Defendant by counterclaim
(by counterclaim)
2
8
12