Cassaniti v McEntee & Anor

Commonwealth of Australia (Second Defendant) FILE NUMBER(S) : SC 20494/1998 Mr T Molomby SC (Plaintiff) COUNSEL : Mr A Bell (Defendants) Mr Macri, Stoikovich Macri (Plaintiff) SOLICITORS : Mr M Donohoe Australian Government Solicitor (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20494/1998 - SAM PETER CASSANITI v ALAN McENTEE & ANOR

JUDGMENT (Dismiss proceedings - Part 33 r6(2) SCR) 1 MASTER: By notice of motion filed 2 June 2004 the defendants seek an order dismissing the proceedings pursuant to Part 33 r 6(2) of the Supreme Court Rules 1970 (NSW) (SCR) on the grounds that the plaintiff has failed to prosecute the proceedings with due dispatch. The plaintiff is Sam Peter Cassaniti. The first defendant is Alan McEntee. The second defendant is the Commonwealth of Australia. The plaintiff relied on his affidavit sworn 20 September 2004. The first and second defendants relied on the two affidavits of Michael Joseph Donohoe sworn 1 June 2004 and 11 August 2004 and the affidavit of Dennis Stokes sworn 2 November 2004. 2 The first defendant is employed as an auditor with the Australian Taxation Office (ATO). The plaintiff alleges that in 1995 an officer of the ATO (the first defendant) improperly and maliciously disclosed information about the financial and taxation affairs of the plaintiff to officers of the New South Wales Police Service. It is also alleged that the officer breached his statutory duties, namely ss 8XA and 8XB of the Taxation Administration Act 1953 (Cth) and s 16 of the Income Tax Assessment Act 1936 (Cth). The ATO allegedly provided information to the Police, which showed that the ATO forwarded tax refund cheques addressed to clients of the plaintiff to the plaintiff. The plaintiff allegedly deposited the cheques into his account and forwarded cheques to his clients for smaller amounts than the actual amounts refunded. 3 As a result of the investigation the plaintiff pleaded that he has suffered damages, special damages (financial loss) and exemplary damages.

The Law 4 Part 33 r 6(2) of the SCR provides: "(2) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may, on application by any part or of its own motion, stay or dismiss the proceedings." 5 In Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274, the NSWCA confirmed that Stollzow v Calvert [1980] 2 NSWLR 749 is still good law as fixed formulae cannot be prescribed to limit the judicial discretion to do that which is just between the parties in the circumstances. There are three important matters for consideration namely the delay, the reasons, if any, for the delay and prejudice. It is also relevant to consider the lack of blame of plaintiffs compared with the fault of the solicitor because the fault of the plaintiff's solicitor in causing delay should not as a matter of course be attributed vicariously to the plaintiff. In the case before me on the evidence blame cannot be sheeted home to the plaintiff's legal representatives. 6 This is an unusual case. In 1995 a search warrant was issued on the plaintiff's premises. The warrant was subsequently set aside in the Court of Criminal Appeal. On 23 December 1999 the plaintiff commenced these proceedings. On 24 July 2001 the business premises and residential premises of the plaintiff were again the subject of search warrants. Up to 40 officers from the New South Wales Police Service, the New South Wales Crime Commission and the National Crime Authority remained on the plaintiff's business premises from 10.00 am to 10.00 pm. Officers from the Australian Taxation Office were also present. The plaintiff's solicitor was at the premises during part of the execution of the warrants. A large bundle of records were removed. There have been a number of search warrants executed (8 in all) by the Australian Federal Police, the National Crime Authority and the NSW State Commercial Crime Agency. In cross-examination the plaintiff referred to everyone "but the RSPCA" having been through his premises. There has been ongoing investigation by the Police into the plaintiff's business affairs. The Police were excused from answering a subpoena as it was held to be an abuse of process - see the judgment of Master Malpass dated 15 December 2000.

Plaintiff's delay and his reasons for delay 7 The defendant's solicitor (per the affidavit of Donohoe, 1/6/04 & 11/8/04) outlines the delay caused by the plaintiff's non-compliance with court orders. I accept that the plaintiff needed the bulk of his documents to be returned from a third party, namely the National Crime Authority before he was in a position to file his affidavit. Although the plaintiff was aware that he could request copies of documents seized, and did receive some on a piecemeal basis. To prepare evidence on the basis of ad hoc copy documents is not satisfactory. But there is a dispute as to when the plaintiff received the documents. Further, it seems that the plaintiff was giving instructions to the court that the affidavit would be prepared when he was not in a position to do so. On 17 March 2004 according to the defendants the plaintiff's legal representative advised the Court that he had received access to National Crime Authority documents. An adjournment for a period of 28 days was requested for the plaintiff to put on affidavit evidence. The plaintiff was ordered to file affidavits by 14 April 2004. 8 On 28 April 2004 at another status conference, the plaintiff's legal representative sought an extension of time to 26 May 2004 to file affidavit evidence. At a status conference on 2 June 2004 the plaintiff's legal representative sought a further extension of one month so that counsel could settle his proposed affidavit. 9 On 10 June 2004 this motion seeking dismissal was listed and by consent stood over to 30 June 2004. At the status conference on 30 June 2004 the plaintiff advised that the proposed affidavit had been settled by counsel, but still required minor changes. The plaintiff was given until 7 July 2004 to file and serve his affidavit. On 7 July 2004 yet another extension of time was given for the plaintiff to file his affidavit, namely until 21 July 2004 and then until 28 July 2004. On 28 July 2004 the plaintiff faxed a copy of his draft affidavit to the defendants' solicitors. This draft affidavit apparently required more than minor changes. There have been several costs orders made against the plaintiff for non-compliance with directions. 10 The plaintiff has also been involved in preparing documents for numerous clients in relation to legal proceedings (as per aff, para 33, 36 &41). He had been working seven days per week and has been under considerable stress. 11 As previously stated, nothing could effectively occur to progress the plaintiff's case until he had access to the bulk of the original documents held by the National Crime Authority. The plaintiff (as per aff, 28/9/04) deposed that he and his solicitors have drafted an affidavit, which he intends to file in these proceedings. At this stage the plaintiff deposed that he was having difficulty locating documents as a result of the various raids and all of the other escalating litigation he had been involved in since 1998 to date. As at 20 September 2004 the plaintiff believed that his affidavit could be sworn by 31 October 2004 provided he received the records from the National Crime Authority. [paras 52 to 57]. On about 6 September 2004 the National Crime Authority returned about 40 archived boxes of documents to the plaintiff. 12 Under cross-examination the plaintiff said that three or four weeks ago he received 60 or 70 boxes of documents. The National Crime Authority gives support to the plaintiff's claim that he had not been in possession of the documents he requires to prepare his case until three to four weeks ago. The National Crime Authority letter to the DCT reported stated that a quantity of seized documents was returned on 8 October 2004 (Ex B). So on a about 8 October 2004 further 60-70 boxes were returned by the National Crime Authority. 13 There are still some documents outstanding but it appears that the plaintiff now has the majority of documents in his possession. About 110 boxes of documents have been return to the plaintiff in the last two months. Hence no affidavit has yet been filed. An affidavit has been drafted but not settled by the plaintiff's counsel. The plaintiff intends to rely upon only his affidavit on the issue of liability. Counsel for the plaintiff stated that he would settle the affidavit next week, which meant the plaintiff's affidavit could be filed by the end of that week. However, in relation to quantum, the plaintiff is claiming a loss to his business, personal injury and exemplary damages. Expert evidence from accountants and medical practitioners will be served. As the plaintiff's business records have only recently been returned, they are currently in the process of being sorted and he still has to prepare his financial returns. These reports would then form the basis of his claim for loss of business. His counsel submitted that an accountant's report could be realistically served by the end of March 2005. For the plaintiff to be able to comply with the timetable foreshadowed above direction he personally will have to put the preparation of this case at the top of his priorities instead of focussing on other matters.

Prejudice 14 Turning now to the prejudice suffered to the defendants by reason of delay, the alleged disclosure of information occurred in 1995, some nine years ago. Some of the alleged disclosed information was done so orally. There is a letter written by the plaintiff to the second defendant dated 1 March 1996 where the plaintiff provided a version of a telephone conversation that occurred on 28 June 1996. The contents of the conversation as alleged by the plaintiff are as follows: "At 8.30am on the 28th I received a call from Alan McEntee, he was merely returning my call. I simply asked him if there was a problem and if I could be of any assistance by making my records available to him. He replied that he was asking people to assist him only if they wanted to assist him and that it had nothing to do with me. I said of course it has to do with me he was ruining my reputation and making me look like a crook. He replied 'IF THE SHOE FITS WEAR IT". Obviously, he has formed his opinion and he is letting it effect the procedure of the investigation. In response I said I was concerned at what he was saying to my clients and the way he was saying it. He snapped back 'YOU'VE GOT PLENTY TO WORRY ABOUT". I asked him what do you mean. I explained I have authorities on all my files and I deduct fees, and I have had ATO officers check my authorities in the past and I was assured they were OK. To this he said "do your authorities state the exact amount to be deducted when the client signs, prior to the client signing?" I answered "no". He replied "Well there you have it!" Then I said "But I've had it checked". He snapped 'THAT'S NO EXCUSE.", AND HE STARTED TO laugh and sneer. I SAID I OBJECTED TO HIM CALLING ALL THESE CLIENTS WITHOUT CONSULTING ME. He said 'IT"S NONE OF YOUR BUISINESS. I CAN RIG WHO I WANT, WHEN I WANT. IT"S BETWEEN ME AND THE TAXPAYERS"." 15 I accept that the claim made against the first defendant is a very serious one as it affects his professional integrity. I accept that with the effluxion of time there will be presumptive prejudice. After taking account all of these matters it is my view that justice is best served if these proceedings are not dismissed. To this end I propose to give the plaintiff one further opportunity to file his affidavit. I stand this motion over until 7 December 2004. The plaintiff is to file and serve his affidavit by 19 November 2004. This matter is listed for a status conference before me on Tuesday, 7 December 2004 at 10.00am. If the affidavit is not filed it is my view that save exceptional circumstances, the statement of claim should be dismissed. Costs are reserved.

(1) The defendants' notice of motion filed 2 June 2004 is stood over until Tuesday, 7 December 2004.

(2) The plaintiff is to file and serve his affidavit by 19 Novermber 2004.

(3) This matter is listed for a status conference before me on Tuesday, 7 December 2004 at 10.00am.

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