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Parties: Banic Holdings Pty Ltd (First Appellant) ACN 104 430 926 Pty Ltd (Second Appellant) Raska Group Pty Ltd (Third Appellant) Papandrea Partners Pty Ltd (First Respondent) Michael Papandrea (Second Respondent) Representation: Counsel A Costin (Appellants) S Gray (Respondents) Solicitors Bradley Allen Love Lawyers (Appellants) Kamy Saeedi Law (Respondents) File Numbers: SCA 76 of 2023 SCA 11 of 2024 Decision Under Appeal: Court: ACT Magistrates Court Before: Special Magistrate Richter Date of Decision: 22 November 2023 Case Title: Banic Holdings v Papandrea Partners Court File Number: CS 100 of 2022 McWILLIAM J: Overview of the claim in detinue giving rise to the appeal

1. The appellants in this matter are three inter-related companies connected to the business dealings of: (a) the late Predrag Banic, who died intestate on 13 September 2015; and (b) his father, Svetozar Banic (known as Steve Banic), who died on 12 April 2021.

2. The appellants are trying to unravel a series of transactions that occurred while an accountant and his accounting firm, Papandrea Partners Pty Ltd, were involved with the appellants, both professionally and personally. The accounting firm (the first respondent) undertook work for each of the three corporate plaintiffs over a number of years: (a) from 9 May 2016 to June 2019 in respect of the first appellant; and (b) from 2010 until 2019 in respect of the second and third appellants.

3. In addition, at various times, Mr Papandrea (the second respondent) was a director and/or secretary of the appellants. Curiously, Mr Papandrea was also the person to whom letters of administration of the estate of the late Predrag Banic were granted on 3 November 2015, notwithstanding that the deceased’s father and sole beneficiary was alive at the time. There may be an explanation for why that occurred. It was not pertinent to this appeal.

4. Putting curiosity aside, the appellants allege that through these engagements, the respondents received documents relating to the appellants’ businesses or created documents belonging to the appellants.

5. The appellants have concerns about the actions taken by the respondents over the years they were involved with the appellants’ assets, including concerns that property of the appellants may have been dealt with incorrectly or inappropriately. To investigate their concerns, the appellants engaged an expert forensic accountant, Mr Paul Green. He prepared an interim forensic review dated 22 November 2019 which referred to further material that he considered would be of assistance in the investigation. That list of further material became referred to as the Green List by the parties.

6. The appellants requested the documents in the Green List from the respondents. Some were provided. Others were not. The appellants commenced proceedings in the Magistrates Court seeking an order that the respondents return specified documents to the appellants set out in a schedule attached to their originating claim (Schedule 1). Although it was not entirely clear from the pleading or indeed the appellants’ submissions, the claim was in substance brought as a tortious claim in detinue. Thus, the underlying dispute here is viewed from the prism of whether there was a wrongful detention of goods. The goods in question in this case are documents said to have been held by the accounting firm, or held by Mr Papandrea due to his other director and administrator roles.

7. On 22 November 2023, the Magistrates Court dismissed that application: Banic Holdings v Papandrea Partners [2023] ACTMC 56 (Banic).

8. The appellants have now appealed that decision, alleging various errors of fact and law. As will be explained, the appeal will be dismissed because no error has been established that altered the outcome. This does not mean that the appellants have no means of obtaining the documents or information that may assist with any actions they may be contemplating against either or both of the respondents (such as for negligence or breach of fiduciary duty). As the appellants acknowledged, they have not yet pursued an application for preliminary discovery or alternatively sought discovery in proceedings already commenced. That is, other investigative options remain available to the appellants aside from seeking documents through a claim in detinue.

The corporate relationships involved

9. The companies involved are: (a) first appellant, Banic Holdings Pty Ltd (Banic Holdings), which was only registered on 9 May 2016; (b) second appellant, ACN 104 430 926 Pty Ltd, formerly known as National Cleaning Services Australia Pty Ltd (NCSA); and (c) third appellant, Raska Group Pty Ltd ACN 138 975 505 (Raska).

10. To explain the relationship between the three entities, Raska: (a) owns NCSA; (b) is owned by Banic Holdings; and (c) was the corporate trustee of the Banic Investment Trust until 24 September 2015, when Mr Papandrea (as settlor and appointor) removed Raska and appointed Elevon Pty Ltd (Elevon) as the trustee.

11. There was some suggestion in the evidence that Raska in fact held assets as trustee beyond that date. It may be that such holding was a mistake or temporary, but it was unnecessary to consider that factual dispute for the purposes of this appeal, nor why an administrator would see fit to substitute a different trustee before distributing the estate to the sole beneficiary.

12. Ms Dragana Cupac is a relative of Steve Banic and is now the sole director of each of the three appellants, in her capacity as the executor of the estate of the late Steve Banic. The entirety of the shares in Banic Holdings are currently in Ms Cupac’s name.

13. There are two other corporate entities involved, Raska Capital Investments Pty Ltd (RCI) and Raska Investments Capital Trust (Raska Trust) which were involved in a joint venture with Raska (as trustee). Although the corporate relationship between them and Raska was a little unclear, RCI was the corporate trustee for the Raska Trust.

Relief sought and the tort of detinue

14. The consideration of the grounds of appeal takes place against the background of remedies available in detinue, which are supported by r 1604 of the Court Procedures Rules 2006 (ACT) (Rules). If the claim succeeds, two remedies the court may give include either judgment for the return of the goods, or payment to the plaintiff of the value of the goods.

15. As submitted by the respondents, the history of provisions such as r 1604, which is replicated in analogous statutory provisions such as s 93 of the Civil Procedure Act 2005 (NSW), was to give flexibility to a court to make an order for delivery of goods, as opposed to giving the defendant a choice to give up the goods or pay their assessed value: Gollan v Nugent [1988] HCA 59; 166 CLR 18 at 25-6.

16. However, the elements of the tort are still required to be proven before a discretionary order under r 1604 may be made. The basis of the tort was explained in Grant v YYH Holdings Pty Ltd [2012] NSWCA 360 at [43]: The essence of detinue lies in a wrongful refusal to deliver up goods to a person having the immediate right to the possession of those goods: CHEP Australia Limited v Bunnings Group Limited [2010] NSWSC 301 (at [183]) per McDougall J. Similarly, the cause of action in detinue accrues once a lawful demand for the return of possession of the chattel is made and the demand is refused: Philpott v Kelley (1835) 3 Ad & El 106; (1835) 111 ER 353; Miller v Dell [1891] 1 QB 468; Lloyd v Osborne (1899) 20 LR (NSW) 190. …

17. Drawing from those authorities and cases such as Sims v SPM Business Consultants Pty Ltd [2002] FCA 1588 at [54] (relied upon by the respondents), the claim in detinue here required that the appellants establish: (a) they had a right to immediate physical possession of sufficiently identifiable goods; (b) the goods were in the possession of the respondents at some time; (c) a lawful demand was made for return of the goods; and (d) the respondents refused to deliver up the goods.

18. The appellants sought only the return of the goods (the documents) in physical or electronic form. In the circumstances of this case, payment for the value of the documents was plainly not useful as an appropriate remedy. The appellants sought that the appeal be allowed, that the decision of the Magistrates’ Court be set aside, and that orders be made for return of the documents specified.

19. There was a little bit of confusion between the parties as to whether a claim in detinue extended to property such as information within data files. In addition, the appellants conceived their demand for delivery as being something other than a claim in detinue. The parties made submissions about information stored electronically and whether that information fell within the descriptor of “goods”. The appellants were concerned the court understand that what they claimed was not mere information but documents that may be recorded in soft copy. I have not dealt with those arguments in any detail as I could see the parties were at cross-purposes and those matters were immaterial to my reasoning on the appeal. The reasoning proceeds on the basis that what was sought may have been in electronic form.

Grounds of appeal

20. The appellants sought to overturn the orders of the Magistrates Court on the following (summarised) grounds: (a) That the court below should have found the documents claimed at specified items of Schedule 1 were the appellants’ property rather than finding that the documents were the property of the respondents (Ground 1). (b) That there was a failure to provide reasons explaining why the Magistrate rejected the claim for the financial statements of the Banic Investment Trust for 2014, being Item 1.3 of Schedule 1 (Ground 2). (c) Error in finding that the Banic Investment Trust for 2014, being Item 1.4 of Schedule had been provided. This included the Magistrate misunderstanding that the request made by the appellants was for the tax returns of the Banic Investment Trust, not the tax returns of its trustee (Ground 3). (d) Error in dismissing the appellants’ claim for the financial statements of a joint venture between Raska Capital Investments Pty Ltd (as trustee for Raska Investments Capital Trust) and the third appellant for the financial year ending 30 June 2014, being Item 4.1 of Schedule 1 (Ground 4(a)). (e) Error in misunderstanding the evidential burden and finding that there was no evidential burden on the respondents (Ground 5).

21. There was a second aspect to Ground 4 relating to the financial statements for the joint venture covering the financial year ending 30 June 2015 and 30 June 2016, which was not pressed.

22. The respondents filed a notice of contention, which argued that the orders of the Magistrates Court should be confirmed on another basis, which is that the appellants failed to prove that the documents in Schedule 1 which were the subject of appeal existed as chattels that were, or had been, in the possession of either respondent.

Summary of Findings on appeal

23. Ground 1 does not succeed because the appellants did not establish that they had a right to immediate possession of the items sought (the data files, back-up and general ledger files). Detinue only assists where the documents were the client’s property in the first place.

24. Ground 2 does not succeed because although the Magistrate wrapped up his finding about the financial statements in other findings, it was implicit in what was written that he considered the financial statements to have already been provided by the respondents and that finding was open on the evidence.

25. Ground 3 does not succeed because it was not clear on the evidence that there was a separate tax return for the Banic Investment Trust. That is, the existence of the goods in question was not proven. Again, there was a lack of evidence but on balance, it appeared that this was a circumstance where the trustee (Raska at the relevant time) filed just the one tax return on the basis that its sole purpose was the role of trustee of the Banic Investment Trust.

26. Ground 4(a) does not succeed because the evidence just did not establish the existence of the documents sought and an immediate right to possession of them if they did. That was the essence of what the Magistrate found and there was no error in that finding.

27. Ground 5 does not succeed because although the language of the Magistrate was not as precise as it could have been, proving the existence of a good to be returned is fundamentally an element in the tort of detinue that must be proved by the claimant. Raising a possible inference that the goods existed was insufficient to make it incumbent upon the respondents to lead evidence refuting the possibility before a finding that the documents had not been shown to exist was open.

The task on appeal

28. For civil matters, an appeal from a judgment of the Magistrates Court may be brought only with the leave of the Supreme Court unless it involves $2000 or more: s 274 of the Magistrates Court Act 1930 (ACT). As this appeal is about documents not money, leave is required.

29. At the hearing, I was satisfied that the requirements for leave were met (primarily that there was a substantive issue to be decided) and granted leave to appeal as well as leave to file a notice of contention.

30. The court’s powers on an appeal are set out in r 5052 of the Rules. The Court has all the powers and duties of the court that made the order appealed from and may draw inferences of fact. The task is essentially one of rehearing, with the requirement being to establish error before the court will intervene.

31. The court must review the evidence that was before the lower court and determine whether the Magistrates Court erred, either in fact or law, in the decision-making process, with due regard for the advantages of the fact-finder in the court below: Manny v David Lardner Lawyers (No 4) [2024] ACTCA 12 at [214] citing Lee v Lee [2019] HCA 28; 266 CLR 129 at [55]; PAAN Investments Pty Ltd (in liq) v Commissioner for Revenue for the Australian Capital Territory [2014] ACTSC 161; 290 FLR 1.

32. If error is established, r 5052(1)(d) of the Rules permits the court to make a variety of orders, among which are the following: confirming, amending or setting aside the order of the Magistrates Court, remitting the case to be heard and decided again, or any other order considered appropriate.

Reasons of the Magistrates Court

33. As will become apparent from the summary of the Magistrate’s reasoning that follows, save for the accounting data, back-up files and accounting ledgers to which the appellants were found to have no title, the Magistrate found any documents that existed had been returned and that if they had not been returned, they did not exist. Where relevant, I have inserted references to the appeal ground to which that part of the reasoning relates.

34. I have summarised the entirety of the reasoning because it was not lengthy and there were two complaints about a failure to give reasons and a misapplication of legal principle with respect to the evidential onus which required the court to consider the Magistrate’s reasons in their entirety. To help with understanding the parts of the reasoning that may be the subject of a discrete ground of complaint, I have inserted references to the appeal ground where relevant.

Magistrate’s Overall approach

35. One of the difficulties for the appellant’s case was that they were uncertain as to what documents were in the possession of the respondents. The Magistrate dealt with that first. He distinguished (Banic at [43]) as an action in detinue from an action for discovery. The former must sufficiently identify the property to be returned. The latter may seek classes of documents to be produced. The Magistrate found (Banic at [47]) that the appellants carried the onus of proving that the defendants were in possession of the documents that existed.

36. The Magistrate then referred to difficulties with the evidence. Specifically: (a) Some documents that were still sought appeared to have been already returned by the respondents (Banic at [51]); (b) To the extent that the appellants considered there were documents missing, the five folders of material supplied by the respondents were not before the court, and there was no detail of what it was that the director of the appellants believed was missing (Banic at [52]). (c) There was no checklist provided or other means of the court determining what was deficient in the documents that the respondents had provided (Banic at [53]-[54]).

37. The Magistrate indicated his approach to the evidence would be that where the documentary evidence indicates that a document had been provided by the defendants and there was no contemporaneous response indicating a deficiency in that provision, he would take the document as being provided as described (Banic at [55]).

38. The Magistrate identified the classes of documents sought (Banic at [56]). They were as follows: (a) accounting data and back up files / General ledgers (b) financial statements (c) bank statements (d) supporting documents for transactions (e) company documents and minutes Appeal Ground 1 - Magistrate’s findings concerning the accounting data, back up files and general ledgers

39. In relation to the accounting data and back up files, the Magistrate found (Banic at [68]) that, together with the general ledgers, those documents were the property of the accounting firm, not the plaintiffs. This finding is the subject of Ground 1.

40. The Magistrate’s finding relied on a letter of engagement that referred to ownership of documents. It was in the following terms: The final Financial Statements, Income Tax Returns and any other documents which we are specifically engaged to prepare, together with any original documents given to us by you, shall be the property of you. Any other documents brought into existence by us including general journals, working papers, the general ledger, draft financial statements and copies of tax returns, will remain our property at all times.

41. The Magistrate dealt with an argument that the letter of engagement ceased to have effect once Mr Banic died (Banic at [59]-[63]) finding that as the engagement was with the companies associated with Mr Banic, that did not change the terms of engagement, so that the above allocation of property ownership continued to apply.

Appeal Grounds 2 and 3 – Magistrate’s findings concerning the financial statements and Investment Trust tax return

42. This part of the Magistrate’s reasons is the subject of a complaint of failure to give reasons in respect of the financial statements and failure to find that the Banic Investment Trust return for June 2014 should be provided, separately from the tax return for Raska.

43. In relation to the financial statements, the Magistrate dealt with the appellants’ claim (Banic at [70]-[71]) for: (a) The Financial Statements of the Banic Investment Trust (Banic Investment Trust), including all supporting schedules for the financial year ended 30 June 2014; and (b) Tax returns of the Banic Investment Trust including all supporting schedules for the financial year ended 30 June 2014.

44. The Magistrate noted that among the list of documents provided to Mr Green were the “2012-2015 tax returns and statements for Raska Group Pty Ltd” (Raska) which was the corporate trustee of the Investment Trust: Banic at [72].

45. The Magistrate then said: There is no evidence as to whether the expression “statements” as used in the Green commissioning letter and the expression “supporting schedules” as used in the Green list and in Schedule 1 are the same, similar or different documents: Banic at [73].

46. The Magistrate had difficulty in determining whether a separate tax return was required to be submitted for the trust where one had been submitted by the trustee: Banic at [74]. This was significant, because the Magistrate referred to there being no evidence that a separate tax return is, or was ever, required for the Investment Trust, as opposed to the returns submitted by the trustee, which were already provided: Banic at [76]-[77].

47. The Magistrate then dismissed the claim for those financial statements: Banic at [78].

Magistrate’s findings concerning the bank statements

48. The bank statements sought were those of the Investment Trust (managed by the third appellant) and NCSA (being the second appellant) at the time when it was National Cleaning Services Australia Pty Ltd.

49. The Magistrate could not find evidence of any such bank statements ever being received by the respondents: Banic at [80], [86]. Accordingly, that claim was dismissed.

Magistrate’s findings concerning property documents

50. The Banic Trust held a number of properties, 16 of which were sold between 28 August 2014 and 18 April 2019. They were identified by the Magistrate at [90] of the reasons. In respect of those properties, the appellants sought the following: (a) rental statements; (b) settlement statements received upon sale; (c) sale contracts; (d) property valuation reports at the time of sale; (e) loan statements; and (f) discharge notices for loans repaid.

51. In respect of the rental statements, the Magistrate found that a number of properties were rented and received rental income. There was correspondence indicating that all documents held for Raska were returned to the law firm acting for the appellants.

52. On balance, the Magistrate concluded that the relevant material in relation to the properties was provided in the previous tranche of surrendered material and dismissed the claim in relation to the rental statements.

53. In respect of the settlement statements and sale contracts, the respondents denied having ever been in possession of settlement statements. The request for these documents was qualified by the appellants stating that if the documents were held by a third party, “please request and provide copies”.

54. The Magistrate found that there was no evidence that the respondents received the originals or copies of such documents from the solicitors who appear to have acted on the sales: Banic at [105].

55. The claim for those documents was also dismissed: Banic at [112].

56. In respect of property valuation reports at the time of sale, the Magistrate found that there was no evidence any valuations were conducted prior to the sale of the relevant properties, which occurred on the open market: Banic at [113]. The Magistrate further found that even if such valuations were conducted, there was no evidence that the valuation was in the custody of the respondents and accordingly, dismissed that aspect of the claim: Banic at [114]-[115].

57. In respect of Loan statements, the Magistrate dismissed that claim for the same reasons as those given concerning the bank statements, namely a lack of proof that the respondents ever came into possession of these: Banic at [116].

58. In respect of discharge notices for loans repaid, the Magistrate again found no evidence that those notices were provided to the respondents as opposed to being provided to the conveyancers acting on the sale for the purpose of settlement. That aspect of the claim was also dismissed: Banic at [117]-[118].

Magistrate’s findings concerning supporting documents

59. The claim for “supporting documents” was dismissed because it was too vague to identify what documents were actually sought. Relying on legal commentary to a rule in NSW in similar terms to r 1604 of the Rules, the Magistrate’s view was that in a claim in detinue, the goods should be described with sufficient particularity that the defendant can identify the goods to comply with the judgment, and further, that the sheriff can identify the goods if they have to be seized from the defendant.

Appeal Ground 4(a) – Magistrate’s findings concerning company documents and minutes

60. The last component of documents considered by the Magistrate was company documents and minutes. These included: (a) Banic Investment Trust documents; (b) NCSA documents; (c) S Banic Family Trust documents; and (d) Joint venture documents

61. It is only the joint venture documents that are the subject of complaint on appeal. However, I have included the Magistrate’s findings for completeness and because they give the context for the finding on the joint venture documents, which on one view, could have been part of the Banic Investment Trust documents.

Banic Investment Trust Documents

62. The Magistrate found that some of the documents sought were again, expressed in too broad a manner to identify what was requested and that in any event, the source of the request (Mr Green’s review) appeared to be more of a request for information rather than a specific document: Banic at [130]-[132].

63. The Magistrate also referred to the correspondence from the respondents dated 16 March 2021 which covered a large and unspecified set of documents relating to Raska, which indicated that all original documents held for that company, including its Constitution, had been included in the tranche of documents provided to the lawyers for the appellants.

64. The Magistrate referred to the possibility that the documents provided may have included Banic Investment Trust documents and then dismissed the claim for Banic Investment Trust documents.

65. There was a separate claim relating to legal advice provided by Chamberlains Law in relation to the replacement of Raska as trustee of the Banic Investment Trust. This arose from a reference made by the respondents to having received such advice. When it was later requested from the respondent, the response was that there was no written advice and that in any case, it was not property of the Banic Investment Trust.

66. On the basis of that evidence, the Magistrate was not persuaded that a document recording the advice by Chamberlains Law existed and dismissed that aspect of the claim: Banic at [138].

67. The Magistrate also dismissed the claim for deeds relating to a change of trustee and any transfer forms relating to the change of trustee because there was no evidence those documents existed either: Banic at [139]-[142].

68. Similarly, documents were sought concerning the appointment of Elevon as trustee of the Banic Investment Trust. Those claims were dismissed because again, the request was too general to demonstrate what further documents were claimed to be in existence: Banic at [143]-[147]. NCSA Documents

69. A number of documents were sought in respect of NCSA which appears to have been sold to another company, Millennium Services Group Ltd. These included share transactions, documents about the sale of NCSA, and documents concerning the authority to lodge ASIC forms for NCSA.

70. The magistrate dismissed the claims for all those documents for various reasons which included (Banic at [148]-[161]): (a) it was not clear what documents were sought; (b) it was not established that the documents existed; and (c) assuming documents were created, there was no evidence that any document remained in the possession of the respondents.

S Banic Family Trust Documents

71. There was another trust named the S Banic Family Trust (Family Trust). The trustee of the Family Trust was Banic Holdings, the first appellant. The appellants sought documents relating to the Family Trust, being: (a) Rental statements for the Family Trust from May 2016 – 30 June 2019: The Magistrate dismissed the claim because he found that the relevant material in relation to the rental records for the Family Trust was provided in a previous tranche of surrendered material (Banic at [163]-[165]). (b) Mortgage documents and Bearer promissory note: The Magistrate dismissed the claim because he inferred that any original documents were returned to Chamberlains Law Firm and were therefore not in the respondents’ possession (Banic at [167]-[170]). (c) Minutes re distributions: The Magistrate dismissed this claim for distribution minutes because there was evidence these had been previously provided to the appellants (Banic at [172]-[173]).

The Magistrate’s findings on the Banic / Raska Joint Venture

72. The appellants also sought financial statements, bank statements, accounting data files and back-ups and all original documents held in respect of a joint venture, which the Magistrate found did not continue beyond 30 June 2015 (Banic at [176]). The Magistrate was not satisfied on the evidence that the documents requested existed and accordingly, dismissed that aspect of the claim: Banic at [178]-[179]. This finding is the subject of Ground 4(a).

73. As the appellants had not established any part of the claim in detinue, the application was dismissed: Banic at [180].

Ground 1 – no error in the finding that the documents were the respondents’ property

74. The appellants’ complaint concerned the accounting data files, back-up files and general ledgers in relation to the Banic Investment Trust, NCSA, the Family Trust and the joint venture. They argued the court below should have found the documents claimed at specified items of the Schedule were the appellants’ property.

75. As seen from the summary of the Magistrate’s reasoning above, the factual finding that those items were the respondents’ property and not the property of the appellants was partially based on a letter of engagement. The contents of that letter clarified what constituted the property of the client as distinct from the workings, data files and general ledgers, which remained the property of the accounting firm.

76. The appellants’ complaint about that factual finding is that the letter of engagement did not apply to the documents created after Predrag Banic died, because the owner of the company had changed as a result. The appellants argued that the letter of engagement was enforceable only during the time that Predrag Banic was director of NCSA and Raska. Once those companies had new directors, new engagement letters should have been issued.

77. A further argument was that Banic Holdings and the Family Trust were only registered on 9 May 2016, well after the letter of engagement was issued, and were not caught by the letter of engagement, because the signatory to the letter of engagement (Mr Banic) did not instruct the respondents to provide any additional services.

78. I have found that the Magistrate did not err in the finding made that the appellants had not established title to the accounting data files, back-up files and general ledgers in relation to the Investment Trust, NCSA (and its predecessor).

79. When professional services have been provided, what constitutes the client’s property and what remains the property of the accounting firm are informed by what the accountant was retained to do. At common law, it is not the case that every record relating to the company held by an accountant is the company’s property. Documents prepared by a professional person to assist the professional to perform his or her professional duties are not the property of the lay client; they remain the property of the professional: Breen v Williams [1996] HCA 57; 186 CLR 71 at 80, 101.

80. Here, there was a letter of engagement and the argument centred around whether or not it continued to apply. However, the letter was only part of the evidence, and although the letter of engagement referred to general “bookkeeping”, the appellants did not establish that the accounting firm did in fact carry out the daily bookkeeping for the companies (such as putting into evidence any invoices setting out the work that the respondents did). In contrast, the respondents accepted that the preparation of annual returns and financial statements was something that the accounting firm was retained to do.

81. It is true that here, the waters were muddied because the accountant personally wore other hats. These included becoming the administrator of the estate of Predrag Banic and further, becoming the director of Raska, NCSA and Banic Holdings. In those roles, it appears that he did not simply distribute the estate to Predrag Banic but instead carried on the business of the companies for a period of time, initiating share buy backs and transferring assets. Even so, that does not mean that the data, back-up and general ledger files of the respondent accounting firm became the property of the companies.

82. The appellants submitted that the data file would commonly comprise detailed transaction data, supplier, customer, banking and employee details and may also contain individual source documents such as invoices, receipts and financing documentation and that the appellants had a greater right to possession of that material than the respondents.

83. That submission misses the point that the existence of the property and an immediate right to possession of it is not established by speculation as to what a data file might, or even would, commonly contain. Appreciating how difficult it is for the appellant companies in circumstances where both gentlemen involved in the companies are now deceased, there were just too many gaps to prove immediate title to the documents (including electronic data files or general ledgers) that fell into this category.

84. It is well appreciated that a company’s obligations to keep financial records sufficient to record and explain its transactions and financial position and performance under s 286 of the Corporations Act 2001 (Cth) means that more than just the company’s tax returns and financial statements are likely to exist. However, it does not follow that the source documents for the recording of the information (such as bank statements, invoices and receipts) were held by the respondents. In the absence of evidence that those items were actually received by the respondents, it is discovery or other production or examination processes that will be necessary to obtain access to those materials from the respondents, or the appellants may choose to pursue alternative means such as writing to other third parties (financial institutions) to obtain copies of the statements.

Ground 2 – the Magistrate’s reasons were sufficient

85. This complaint concerned the financial statements for the Banic Investment Trust. The magistrate referred to them as being sought but did not give express reasons for dismissing that aspect of the claim for their return.

The magistrate had an obligation to give adequate reasons

86. I have determined this ground by reference to a number of established principles, starting with the judicial obligation to give reasons: (a) A judge or magistrate at first instance has an obligation to give reasons for the judgment given: Pettitt v Dunkley [1971] 1 NSWLR 376 at 380-382; Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 441. (b) A failure to give reasons will constitute an error of law: Petitt at 381-382, 385, and 388; Fleming v The Queen [1998] HCA 68; 197 CLR 250 at [22]. (c) The reasons given must be adequate for a party to understand the basis of the decision and to exercise any appeal rights, and for an appellate court to discharge its statutory functions: Ming v Director of Public Prosecutions (NSW) [2022] NSWCA 209; 109 NSWLR 604 at [26]-[29]. (d) The reasons of the magistrate must be considered “fairly, as a whole” (see Garay v The Queen (No 3) [2023] ACTCA 2 (Garay) at [138]), with an understanding of the applicable principles and the issues that were in dispute.

Whether reasons are adequate depends on the nature of the jurisdiction and the nature of the issues in the case

87. As to the content of the obligation to give “adequate reasons”, this has been discussed in various contexts, including in the authorities to which I have just referred, as well as DL v The Queen [2018] HCA 26; 266 CLR 1 (DL) at [32]-[33]; Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; 252 CLR 480 (Wingfoot) at [45] and Fares v DPP (No 2) [2025] ACTCA 2 [58]-[60] (and the cases there-cited).

88. Adequacy of reasons is not to be judged against a standard of perfection, but the question is whether they “attained the minimum acceptable standard”: Alexandria Landfill Pty Ltd v Transport for NSW [2020] NSWCA 165; 103 NSWLR 479 at [316]., reported in 103 NSWLR 479 although the pinpoint paragraph does not appear in the published judgment. An application for special leave was refused: see Alexandria Landfill Pty Ltd v Transport for NSW [2020] HCASL 271.

89. The relative test of ‘adequacy’ depends on the nature of the jurisdiction which the court is exercising and the issues in the case: DL at [32]-[33]. It will be informed by the particular statutory context in which the decision is made: Wingfoot at [45].

90. Where the decision is to be made within tight timeframes so as to create a “pressure-cooker environment”, considerable latitude should be afforded to the decision-maker as to the manner and form of the reasons given: State Water Corporation v Civil Team Engineering Pty Ltd [2013] NSWSC 1879 at [10]. That concept has significance here, because of the decision-making context being that of the Magistrates Court, where any evaluation of the reasons must take account of the pressures under which Magistrates are placed by the volume of cases coming before them: Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Limited [2006] NSWSC 343; 67 NSWLR 402 at [15].

91. Consideration was given to the minimum standard for “adequate” reasons in the Magistrates Court by Refshauge J in O’Connell v McMennemin [2014] ACTSC 112 at [70]-[80]. His Honour found there is an obligation on a magistrate, as part of the exercise of judicial office, to adequately state the findings of fact and reasons for decision, for the purpose of enabling a proper understanding of the basis upon which the findings of guilt were reached: O’Connell at [73], citing Brooks v McShane (1996) 89 A Crim R 195 at 208. In a summary jurisdiction, the reasons must articulate the essential ground or grounds on which the decision rests, although a detailed explanation is not required: O’Connell at [77].

92. The adequacy of reasons in such a context has also been considered in Bourke v Styche [2024] ACTSC 62; 21 ACTLR 86 at [55]-[57]; Van Eyle v McFarlane [2024] ACTSC 50 at [87]-[91] and Wolter v Broomhall [2023] ACTSC 331 at [59]-[65], with all drawing upon statements of similar effect to those set out above.

The reasons here adequately exposed the Magistrate’s reasoning process

93. I accept that the Magistrate did not separately address why the appellants’ claim for the financial statements of the Banic Investment Trust was not accepted. However, what the Magistrate did do was to first record his understanding that recovery of those financial statements was sought and secondly, find that the 2012-2015 tax returns and statements for Raska, the trustee of the Banic Investment Trust were returned. In addition, the Magistrate had explained his approach to the evidence at the outset (Banic at [55]), which was that where the documentary evidence indicates that a document had been provided by the defendants and there was no contemporaneous response indicating a deficiency in that provision, he would take the document as being provided as described.

94. There is a further link in the reasoning process that could have been exposed specifically in relation to the financial statements but was not, and this was that the Magistrate was not persuaded that the financial statements for the Banic Investment Trust were different from the financial statements for Raska, but the magistrate did make that point in dealing with the tax return for Banic Investments Trusts (which is the subject of the next ground of appeal).

95. When the magistrate’s reasons are taken as a whole, the magistrate’s reasoning adequately explained his finding on the material fact, namely that the financial statements for the Banic Investment Trust were part of the statements for Raska which had already been provided. On the evidence that was before the Court, I do not consider there was any error in that finding. Accordingly, this ground was not substantiated.

Ground 3 – the tax returns (and financial statements) for the Banic Investment Trust were supplied

96. That reasoning overlaps with the next complaint, dealing with the magistrate’s finding that the tax returns for Raska over 2012-2015 has been supplied. The magistrate did not accept that a separate tax return from that submitted by the trustee was ever required for the Banic Investment Trust (Banic at [77]).

97. The magistrate had evidence in the form of correspondence from the respondents that Raska filed the tax returns in 2013, 2014 and 2015, and that Elevon filed the tax returns for 2016 and 2017. What was not before the court below were the five folders of material that the respondents had provided to the appellants. This meant that the tax returns for Raska for the earlier years when it was trustee of the Banic Investment Trust were regrettably not part of the evidence.

98. However, the 2016 and 2017 tax returns from Elevon were in evidence and they specified that the entity filing the tax return was the Banic Investment Trust. That tends to suggest that the same course may well have been adopted by Raska as the previous trustee.

99. The gap in the evidence meant that the court was unable to compare the tax file number for the returns submitted by Raska with the tax file number on the tax returns submitted by Elevon. This would have confirmed for the appellants whether the returns they had been provided by the respondents were in fact those of the Banic Investment Trust (as opposed to the separate tax returns registered in the names of the trustee companies), or whether further investigations or documents were required. Correspondence with the tax office would also have readily identified the tax file number registered for the Banic Investment Trust.

100. The appellants also argued that the Magistrate’s finding was against the evidence. They drew the court’s attention to the oral evidence given by Ms Cupac (on 6 June 2023) that although the respondents’ letter said that the 2014 tax return and financial statements for the Banic Investment Trust had been provided, that was a mistake.

101. However, Ms Cupac was further cross-examined on that evidence, and it was pointed out to her that the solicitors for the appellants had then referred to those 2014 materials as being included in the documents that were then provided to the forensic accountant, Mr Green.

102. Again, had the folders of documents provided by the respondents been before the court, that discrepancy could have been readily addressed by reviewing whether what the respondents said they had provided in their correspondence matched the documents that were actually provided. In the absence of that evidence, the Magistrate dealt with the issue by his finding at the outset that if the respondents had recorded the documents as having been provided and there was no contemporaneous complaint otherwise, then he would accept those documents as having been provided. I see no difficulty with such an approach. However, its effect was to impliedly reject Ms Cupac’s belief to the contrary.

103. Of course, if it is the case that the respondents were mistaken in believing that they had provided the relevant 2014 tax return and financial statements when in fact that has not occurred, there is nothing to prevent the appellants from writing to the respondents and pointing out that omission by reference to the documents that were supplied now.

104. Taking these circumstances together and noting that the existence of the documents was an element for the plaintiff to prove (discussed below in the context of Ground 5), no error was discernible in the Magistrate’s finding that the tax returns for the Banic Investment Trust were provided – they were simply referred to as the tax returns for Raska and for Elevon.

105. Accordingly, this ground is not made out.

Ground 4(a) – no error in the finding that the existence of the joint venture financial statements had not been proved

106. The complaint here concerned the lack of provision of financial statements for the joint venture in 2014-2016. I note that the joint venture was between the Banic Investment Trust (at that point, through Raska as the trustee company) and with Raska Investments Capital Trust.

107. Again, there was insufficient evidence to prove that the documents requested in fact existed, those being joint venture financial statements for 2014 and 2015.

108. It is not enough to say that because a joint venture existed in 2014 and 2015 and because a financial statement was prepared for each of the 2012 and 2013 financial years: (a) one was prepared for each of the 2014 and 2015 financial years; and further that (b) those financial statements were the property of the appellants as opposed to part of working documents necessary for the preparation of tax returns for the Banic Investment Trust, whether in its own right, or through the relevant trustee.

109. The appellants relied on the fact that the financial statements in 2012 and 2013 were “special purpose financial statements” prepared “in order to meet the needs of the partners”. This was the language of the “Statement of Significant Accounting Policies” included in each of the financial statements for those years.

110. Again though, the appellants really had no more on which to base their argument that the documents existed than speculation. The speculation in turn was based on the mere existence of the joint venture and the creation of such documents in the past. While it was certainly the case that in the past, the joint venture partners had considered it necessary to prepare such special purpose financial statements, the appellants did not have any evidence to suggest that joint venture financial statements had also been prepared in 2014 and 2015.

111. Of course, the lack of any financial statements in years where there are question marks over where significant amounts of money ended up may raise other questions for the respondents, in terms of whether the lack of record-keeping was at least imprudent or indicative of a breach of fiduciary duty or worse. The joint venture statements in 2013 showed a net zero balance in capital funds. Mr Green had documents before him to suggest that as at 30 June 2015, the value of the equity for the joint venture was listed at $4,644,384. However, by 30 June 2016, the value of the equity was $NIL. These are circumstances that at the very least, call for an explanation as to where the money funding the joint venture went, giving rise to other avenues of enquiry.

112. However, to find that such statements should have been prepared or that a prudent director of a trustee company involved in a joint venture would have caused special purpose financial statements to have been prepared does not establish that they were prepared. The court is only concerned here with working out whether the documents existed. Again, the evidence did not go so far as to suggest that it was more likely than not that financial statements had been prepared. That is what the Magistrate found, and it has not been established that he erred in so finding. Ground 4 is not made out.

Ground 5 – the proper application of the principles regarding the evidentiary burden does not alter the conclusions on whether the documents existed

113. The appellants’ complaint concerns the magistrate’s finding (Banic at [46]) that where the defendants specifically denied receiving the documents that were the subject of the claim or pleaded that they had been returned, there was no evidential burden on the defendants.

114. The magistrate further stated (Banic at [47]-[48]) that the plaintiffs carried the onus of proving that the defendants were in the possession of the documents and that the defence of the respondents put the appellants on notice that they must prove possession of the documents by the defendants. This led to the material finding (Banic at [55]) that: …Where the documentary evidence indicates that a document has been provided by the defendants, and there is no contemporaneous response indicating a deficiency in that provision, I find that the document was provided as described.

115. The appellants’ argument is that there is a difference between legal and evidential burdens of proof. Where the facts or means of proving a point in issue are peculiarly within the knowledge or capacity of the opponent, slight evidence may be enough unless explained away by the opponent and should be weighed according to the power of the party to produce it: Blatch v Archer (1774) 98 ER 969 at 970.

116. The appellants submitted that their legal and evidential burden was readily discharged by the evidence that was before the court in circumstances where the documents were within the control of the defendants.

117. Further, the defendants had no sworn evidence contradicting the material led by the appellants, which may give rise to Jones v Dunkel [1959] HCA 8; 101 CLR 298 inferences, to the effect that nothing the respondents would have said would have assisted their case.

118. I accept that in the circumstances of this case, the principles relied upon by the appellants had some force here. The difficulty, though, is that the evidence that was before the court gave rise to possibilities but not necessarily probabilities. The evidential burden on the appellants may have been lower, but suspicion and even expectation of the existence of a document was just not enough for the drawing of the inferences that were required to discharge the burden of proof. If the Court really had no confidence in the existence of the documents, let alone that they were withheld in the respondents’ camp, it would have been improper to make an order compelling delivery up based on a mere suspicion.

119. For example, with the electronically stored data files, it was possible that there were bank statements from third parties, but it was equally possible that the data files contained no documents from third parties. There was nothing the appellants could really show to the court to draw an inference that those documents existed (either in hard copy or electronic form) and were in the possession of the respondents. If there was an email to the respondents referring to bank statements or a bank statement from the appellants’ accounts showing that bank statements were addressed to the business address of the accountants, then the evidence would have moved towards drawing an inference of existence and possession by the respondents. However, in the absence of other material and with the people best placed to assist deceased, what was before the court was unpersuasive.

120. Likewise, for the Banic Investment Trust tax returns and financial statements, it was possible that separate tax returns and financial statements existed, but it was equally possible that what was returned to the appellants were the very documents that were sought and the court was not in a position to know which of those two possibilities was the likely one because the folders of documents were not in evidence. To the extent that surrounding documentation gave any assistance, as I have said, it tended to establish that there was only one set of financial statements and tax returns for the Banic Investment Trust and the relevant trustee company.

121. The same possibilities existed for the financial statements for the joint venture. Past statements suggested the possibility of statements for the relevant years, but given there was no obligation to prepare those statements every year, it was difficult to take the next step of finding that they were prepared for the years the appellants wanted.

122. The result is that, while I take the appellants’ point about there being a more nuanced approach to discharging the evidentiary burden in this case than that articulated by the magistrate, applying those principles still does not change the ultimate outcome for the appellants. That is, taking a slightly different reasoning pathway, I nevertheless consider the magistrates’ end conclusion to be correct.

Notice of Contention

123. As the appellants have not succeeded in establishing any error in the conclusions drawn by the Magistrate, the notice of contention does not arise for determination. For certainty, it will also be dismissed. Costs

124. It is appropriate in this case for the costs order to reflect the ordinary compensatory principle that costs follow the event, and in this case, the event favours the respondents. If either party seeks a different costs order, they are to notify the court within 7 days of the orders being made.

Orders

125. The orders of the Court are: (1) The appeal is dismissed. (2) The notice of contention is dismissed. (3) The appellants are to pay the respondents’ costs.

I certify that the preceding one hundred and twenty-five [125] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam.

Associate: Date: