[58] It may also be necessary to assess the significance of any departure from the pleadings in view of the express statutory requirement in s 1317EA(2), set out above, that any declaration of contravention must identify 'a specified act or omission' which constitutes the contravention."
74 At [515] his Honour said that he was not prepared in that case, in the context of civil penalty proceedings, to conclude that the tests in Mount Oxide Mines and Dare v Pulham had been met.
6 CREDIT OF WITNESSES
75 The witness whose evidence was principally under attack was Mr Olde, on whose reports, affidavits and oral evidence ASIC largely relied to prove Mr Goulding's breaches of duty.
76 In support of his application under r 29.10 Mr Goulding made submissions concerning Mr Olde's credit. I summarised those submissions as follows in my r 29.10 judgment supra at [12]:
"In the forefront of those submissions there was a submission that the affidavit and, indeed, the other evidence of Mr Olde, the liquidator, was 'tainted with bias, prejudice, and are not an accurate reflection of the complete record [held by the liquidator]'. In amplification of that submission, the third defendant submitted 'that Mr Olde's evidence is tainted by the adverse opinion that he formed about the honesty and integrity of the third defendant immediately [sic] or prior to his appointment as a liquidator of the eight corporate entities'. A further ground of bias alleged was that the final report prepared by Mr Olde 'was prepared pursuant to a request by the plaintiff and upon payment of a fee of $100,000'. Detailed submissions were then made of regards in which it is said that Mr Olde's knowledge of or reference to the records and investigations relating to the company were said to be defective. The third defendant continued in his written submissions to submit that 'in light of the above list of gaps, due to omission, ignorance or dismissal of facts the Court should treat the evidence of Mr Olde with extreme caution. It should do the same with Mr Olde's selective method as to the issue of solvency of the various corporate entities'. Equally the third defendant submitted 'that Mr Olde is not an impartial witness from whose evidence the Court is able to draw comfort in making any decision in favour of the plaintiff on any of its pleadings'. In his written submissions in reply the third defendant submitted 'that on any view Mr Olde is not an arm [sic] length independent witness and as such his evidence should be rejected in its entirety'".
77 Those submissions were essentially repeated by Mr Goulding in his closing submissions. Both on the r 29.10 application and in final submissions, Mr Goulding relied particularly on a telephone call made by Mr Olde. Mr Goulding elicited in cross examination that Mr Olde became aware that Mr Goulding was employed by BankWest. He had thereupon telephoned Peter Steele, the State Manager, and said, "If I were you, Peter, I would type the name [Edwin Goulding] into Google." Thereafter, Mr Goulding was dismissed by BankWest, which Mr Olde had contemplated as possible when he made the phone call. Mr Olde's reason given for making the call was that BankWest was an important client of his firm and he was dealing daily with Mr Steele at that time.
78 ASIC submitted that Mr Goulding's attack on Mr Olde's evidence on the ground of bias should be rejected on the grounds set out below.
79 There is no authority requiring the Court "to hold that an 'interested' expert's evidence be rejected because of a 'perception' that the witness might favour the party seeking to adduce that evidence": FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33 at [29] per Ormiston JA.
80 The main thrust of the attack made by Mr Goulding on Mr Olde's credibility was that Mr Olde was "biased" because Mr Olde had formed the view that Mr Goulding was a dishonest person.
81 I do not find that Mr Olde was "biased" because he made a judgment about Mr Goulding's behaviour as a director of the companies within the SIH Group. Indeed, he was required as a liquidator to form a judgment about Mr Goulding's behaviour: see per Street J in Re Allebart Pty Ltd (in liq); Re Home Holdings Pty Ltd (in liq) [1971] 1 NSWLR 24 at 26; and per McHugh JA in Brian Cassidy Electrical Industries Pty Ltd (in prov liq) v Attalex Pty Ltd [1984] 3 NSWLR 52 at [79]. This is precisely what Mr Olde did, as he was required to do, in submitting his provisional liquidator's reports to the Court and in submitting his s 533 reports to ASIC.
82 It is not an adverse reflection on Mr Olde that he formed the view that Mr Goulding was dishonest. It is not surprising that he did so. This was a consequence of evidence he discovered tending to show that Mr Goulding acted dishonestly as a director of the companies in the SIH Group. The evidence does not demonstrate that Mr Olde had a closed mind on the issues raised. On my assessment of his evidence, he continued to assess the material dispassionately despite the view of Mr Goulding he had formed on the evidence available to him. It was not the case that Mr Olde's views were incapable of alteration.
83 ASIC submits that, in respect of an officer of the Court such as Mr Olde, the Court would be very slow to conclude that his conduct constitutes "bias" in the relevant sense of pre judgment incapable of alteration.
84 In any event, it should be remembered that Mr Olde's evidence consists largely of factual material (rather than opinion evidence). The consequence is that, in order to impugn successfully Mr Olde's evidence, Mr Goulding would have had to demonstrate that the alleged "bias" caused Mr Olde to produce or record false or incorrect factual records or material. Mr Goulding did not make any such suggestion to Mr Olde in cross examination.
85 In respect of Mr Olde's opinion evidence (in particular, his conclusions as to solvency), to impugn those conclusions successfully Mr Goulding would have had to demonstrate in cross examination that Mr Olde did not truly hold those opinions or would not have held them but for the alleged "bias". Again, Mr Goulding did not put any such proposition to Mr Olde in cross examination. Further, a submission to that effect (that is, that Mr Olde did not truly hold the opinions he expressed or would not have held them but for "bias") would have to be rejected by the Court, given that the opinions of Mr Olde were entirely consistent with the factual material adduced into evidence.
86 I turn to my findings concerning Mr Olde's credit. His credit was impugned on the ground of bias, essentially on three bases, first, that he was paid for his services; second, that what he did was informed by an early view he formed that Mr Goulding was dishonest; and, third, his actions in relation to Mr Steele.
87 As to the first basis, the Court will not infer bias simply from the fact that a witness, eg, an expert, is paid to prepare evidence. It could hardly be otherwise where an expert witness is required to devote large amounts of time to the preparation of the evidence. The Court must, of course be vigilant to see that a paid expert has maintained independence and has not become an advocate. But the fact alone of payment cannot be a basis destructive of credit. In this case, much or most of the material on which Mr Olde relied in giving his evidence was not assembled or created in the course of preparing his evidence, but in the course of carrying out his duties as a liquidator. Although the Court must view carefully the evidence of a liquidator, as that of other witnesses, it will not lightly find that a liquidator, who has particular duties to the Court, has acted in breach of his duties.
88 As to the second basis, the view of Mr Goulding that Mr Olde formed in the course of carrying out his duties as liquidator on the material that became available to him, he could hardly have formed another view. The correctness of that material has not been substantially challenged in this case.
89 As to the third basis, minds may differ as to the appropriateness of Mr Olde's actions in relation to Mr Steele. It is clear, however, that Mr Olde regarded himself as under a duty to a client to draw attention to facts relating to Mr Goulding and the SIH Group. I do not find that fact of itself derogatory of his credit.
90 The real question is whether Mr Olde allowed the view that he had come to concerning Mr Goulding's honesty to taint his recording of the factual matters that he discovered or the opinions he expressed as to the affairs of members of the SIH Group. I cannot see any evidence that he did. In my view, his evidence was given carefully and in a measured fashion. He was prepared to concede matters that were put to him, for instance, gaps in his knowledge concerning the factual matrix. He gave careful consideration before giving answers on controversial matters. I was impressed by his demeanour as a witness. I could not conclude that any view that he had formed about Mr Goulding affected his judgment in relation to matters of fact he recorded or opinions he expressed. I do not find that his evidence was tainted by bias.
91 It was also contended that the validity of Mr Olde's evidence was compromised by gaps in his knowledge revealed in cross examination. It is hardly surprising that there were gaps as he sat in the witness box, bearing in mind the large and complex body of factual material that he had traversed in relation to the affairs of the SIH Group. He was ready to concede that there were gaps in relation to particular matters put to him; he did not pretend to know matters that he did not. The gaps demonstrated related to relatively minor matters, were mostly cured and were not such as to compromise either his factual findings or the opinions he expressed.
92 All in all, I find that Mr Olde was a witness whose credit was not seriously impugned and whose statements of fact and opinion are in general terms fit for acceptance by the Court, as appropriate.
93 Mr Goulding in cross examination attacked the ASIC officers and the lay witnesses called by ASIC with varying degrees of success. However, the results of these attacks were not such as to lead me to reject any of the evidence of those witnesses that was germane to the findings that I have in fact made in these proceedings.
7 MR GOULDING'S GENERAL SUBMISSIONS
94 Mr Goulding's written submissions contain a number of submissions that extend beyond the individual headings or breaches dealt with in these reasons. I propose to deal with them here rather than under the individual headings. In fact, they correspond with similar submissions that Mr Goulding made in support of his r 29.10 application and that I overruled in my r 29.10 judgment at [7] - [10]. What appears below substantially repeats what I said in that judgment.
95 The first matter is that Mr Goulding put forward in a number of places in support of his submissions the contents of affidavits filed on his behalf. In fact, he led no evidence on the trial. The filing of the affidavits did not introduce them into evidence. He announced that he did not intend to call evidence and the affidavits were not read. He was therefore not exposed to cross examination, which he otherwise would have been. I have not read the affidavits (despite the provisions of s 69 of the CPA). I shall not, of course, advert to their contents.
96 The second preliminary submission by Mr Goulding that is misguided is that the fact that Mr Olde neither entered an appearance nor filed a defence on behalf of any or all of the eight named corporate defendants is fatal to ASIC's case. It is patent that Mr Olde's decision not to defend on behalf of the corporate defendants flows from the fact that each of them is in liquidation and there is no leave to proceed against them. Equally, there is no obligation on ASIC as plaintiff to pursue them and there is no point, in view of their status, in pursuing them in this case. It is quite erroneous to suggest that a plaintiff in circumstances such as the present must proceed (or obtain relief) against the corporate defendants as a basis for making out a case against a director of those defendants. The failure of ASIC to pursue and Mr Olde to defend the proceedings against the corporate defendants cannot assist Mr Goulding in these proceedings. Equally, the failure to seek relief against the trustees of any of trusts does not enure in Mr Goulding's favour.
97 Thirdly, Mr Goulding asks that he should be given relief or that the Court should act in some way upon the provisions of r 14.28(1)(c) of the UCPR relating to the striking out of matter in pleadings as being an abuse of the process of the Court. It is claimed that the relevant portion of the statement of claim and the relief sought are equally applicable to Mr Geagea as the fourth defendant and, furthermore, that the declarations and orders sought apply to the eight corporate defendants and also to various trusts that are not named as parties to the proceedings. It is claimed that for ASIC to proceed in those circumstances amounts to an abuse of the process of the Court. That proposition is clearly quite incorrect and the submission is rejected. A plaintiff may proceed against whichever of the defendants it chooses to without proceeding against others. This does not mean that Mr Goulding cannot rely in an appropriate way on deficiencies in ASIC's pleading.
98 The fourth of the preliminary points to which I have referred is that the absence of Mr Geagea as a defendant is somehow fatal to ASIC's case against Mr Goulding. ASIC and Mr Geagea settled the proceedings as between them on the fourth day after the hearing commenced. Mr Geagea, against whom the proceedings had continued up to that point, was also sued as a director or a person who had acted as a director of the corporate defendants. As the settlement by the making of orders by consent against Mr Geagea involved Mr Geagea making admissions, I was asked not to deal with the effectuation of the settlement, and, indeed, I should not in any event have done so. I made an order for the separate determination of those questions, which order was subsequently modified in some regards by Hammerschlag J, who dealt with the effectuation of the settlement. The submission that this somehow affected ASIC's right to proceed against Mr Goulding is without foundation. ASIC and Mr Geagea were perfectly entitled to settle the litigation between them, if they were minded to do so. They did settle the proceedings as between them. That had no effect upon ASIC's entitlement to continue to conduct the proceedings against Mr Goulding, which, indeed, it has.
8 THE INDIVIDUAL BREACHES
99 I shall now proceed to deal in turn with the breaches alleged. Each breach will be dealt with under three headings, namely, ASIC's submissions, Mr Goulding's submissions and conclusions. I have taken the course of setting out ASIC's written submissions virtually verbatim under the first heading. I see no point in paraphrasing them and they usefully summarise the evidence on which ASIC relies in each instance. In the absence of countervailing evidence and in view of my findings on credit, that evidence I generally accept. Any commentary on or modification of ASIC's submissions is dealt with in the corresponding section on conclusions. Under the second heading I have summarised Mr Goulding's submissions. Under the third heading, in the section on conclusions, I have set out my conclusions in respect of the particular breach.