Supreme Court of WA|2008-01-18|Before: Mr P, Beech J

CORPORATE SYSTEMS PUBLISHING PTY LTD -v- LINGARD [No 3] [2008] WASC 1 (18 January 2008)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : CORPORATE SYSTEMS PUBLISHING PTY LTD -v- LINGARD [No 3] [2008] WASC 1

BETWEEN : CORPORATE SYSTEMS PUBLISHING PTY LTD (ACN 009 412 622)

STANTON PARTNERS AUSTRALASIA PTY LTD (ACN 085 103 206)

STANTON ACCOUNTANTS & ADVISORS PTY LTD (ACN 085 059 909)

Practice and procedure - Application to re-open trial - Application for further and better discovery - Turns on own facts

1 BEECH J: On 12 November 2007 I reserved my decision after the trial of this action. The trial first commenced in September, was adjourned until 5 November 2007, and then proceeded from 5 - 12 November 2007. The first and fourth to sixth defendants have made various applications arising out of their becoming aware, on or about 7 December 2007, of various matters the subject of a decision (the AAT decision) of the Administrative Appeals Tribunal in Christou v Tax Agents Board of Western Australia [2007] AATA 2007.

2 The AAT decision affirms the cancellation, on 11 December 2006, by the Tax Agents Board of Mr Christou's registration as a tax agent. The primary basis for the cancellation of the registration was Mr Christou's conviction, on 29 June 2006, in respect of nine charges under s 8C(1)(a) of the Taxation Administration Act 1953 (Cth) for failing to lodge business activity statements for the nine quarters from September 2002 until September 2004.

3 The defendants complain that the charges, the decision of the Tax Agents Board of 11 December 2006 and the application to the AAT were all not the subject of discovery in the action, when they should have been. They now seek further and better discovery from the plaintiffs, or at least from Mr Christou, the second plaintiff, in respect of classes of documents relating to those matters. Further, the defendants apply for leave to re-open the trial of the action so that they can adduce evidence in respect of the convictions, the Tax Agents Board decision, and the AAT proceedings and decision. In addition they seek leave to cross-examine Mr Christou in relation to these matters.

4 It is not in doubt that the Court retains a power to allow a party to re-open a case at any time before judgment has been entered. The defendants submit, and I accept, that that is a power to be exercised in the interests of justice.

5 Further, there is no doubt that in an appropriate case the failure of a party to give adequate discovery may be a proper foundation for the grant of leave to re-open the trial after the decision on the trial has been reserved. Indeed, failure to give proper discovery may be a ground upon which an appellate court may grant a new trial, see Quade v Commonwealth Bank of Australia [1991] FCA 26; (1991) 27 FCR 569. However, for the reasons which follow, I am not persuaded that the convictions, the proceedings involving the Tax Agents Board, the AAT review of the Tax Agents Board decision, or the matters revealed in them, are or were discoverable in this action. Further, if these matters are discoverable, they are not sufficiently material to warrant re-opening the trial.

6 The principles applicable to an application under O 26 r 6 of the Rules of the Supreme Court 1971 (WA) were summarised by Master Newnes in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 [3] - [6]. The following points are relevant.

7 First, the matters in issue are to be determined by reference to the pleadings. Secondly, there is not a strict entitlement to an order for discovery, including an order for further discovery. The discretion to order discovery is to be exercised having regard to the timely and cost effective disposal of litigation. Thirdly, documents going solely to the credit of a party do not relate to a matter in issue: Beecham Group Pty Ltd v Bristol Myers Co [1979] VicRp 27; [1979] VR 273, 278; CSBP Ltd v Gerling Australia Insurance Co Pty Ltd [2007] WASC 9 [46].

8 As is said in the defendants' written submissions, their key proposition at trial was that the payment differentials, as between Joyce and Lingard on the one hand and Christou on the other (and their associated entities), were justified by reason of the April 2001 and January 2002 agreements. Part of the context of those agreements, it is said by the defendants, was Mr Christou's under-performance as a partner or principal in the period prior to the agreements being entered into. Reference is then made in the defendant's submissions to the neglect on the part of Mr Christou in respect of the filing and preparation of tax returns.

9 However, the agreements were entered into in or before January 2002. That directs attention to conduct on the part of Mr Christou occurring not later than January 2002. The convictions relate to conduct after January 2002. The earliest default relates to the quarterly BAS statement for the period ending 30 September 2002, which was, of course, due to be lodged some time thereafter.

10 There is also reference, in the AAT decision, to the fact that Mr Christou has not lodged personal tax returns for the years ending 30 June 2001 and thereafter. That was a matter known at trial. In any event there is no evidence that it was a matter in existence, much less known to all parties, including the defendants, as at January 2002.

11 The defendants say in their submissions that, because it was not appreciated that any particular consequence flowed from the failure to lodge tax returns, cross-examination was relatively limited and that, had the defendant been aware of matters revealed by the AAT decision, the cross-examination would have been more extensive. While I do not doubt that it is so, that a document might have revealed information which could have been used in cross-examination had it been available does not, of itself, make that document discoverable.

12 The matters upon which it is said in pars 18.1 - 18.3 of the defendants' submissions that Mr Christou would have been more extensively cross-examined seem to me to go only to credit and not to any pleaded issues.

13 In written and oral submissions, it is said that the application for GST registration evidences or may well evidence an acceptance on the part of Mr Christou that the April 2001 and January 2002 agreements altered the remuneration arrangements. I do not accept that that is so. In this regard the defendants rely, in part, on the AAT decision. It seems to me that what is revealed in the AAT decision is no more than that the applicant identified a dispute with his ex-partners in relation to his share of the income. At [7] of the AAT decision it is said, consistent with the plaintiff's case at trial, that Mr Christou was entitled to a third of the partnership income but had not received it.

14 The statement in par 19 of the defendants' submissions, that it is 'possible' that the application for GST registration may contain information confirming Mr Christou's acceptance of the agreements as altering the remuneration arrangements, is, in my opinion, speculative.

15 Next, I do not accept that the convictions, the AAT decision, or matters contained in the documents referred to, would or reasonably could bear upon the relief to which Mr Christou may be entitled in the event that the plaintiffs succeed in the actions. Mr Christou's relief relates to his share of profit entitlements in respect of stipulated past years, together with a claim for a declaration of an entitlement in relation to past years' profits.

16 It may well be that the matters revealed by the AAT decision, and the other classes of documents in respect of which further discovery is now sought, reveal conduct, by act or omission on the part of Mr Christou, which might form the subject of a claim or complaint by some of the defendants against Mr Christou.

17 However, that does not make the material discoverable in the present proceedings. Much less, in my opinion, does it warrant the re-opening of the trial at this stage. For example, in oral submissions it was said that the AAT decision revealed conduct by Mr Christou in breach of the licence agreement of November 1998. However, the plaintiffs do not seek, in this action, to enforce the licence agreement. Any breach by Mr Christou of the licence agreement would not itself give rise to a defence to the plaintiff's claims.

18 Any complaints that the defendants may have arising from the matters revealed will need to be progressed separately from this action.

19 If, contrary to the view to which I have come, the documents were sufficiently relevant as to be discoverable, I would, as a matter of discretion, have declined to exercise my discretion to allow the defendants to re-open the case. That view takes into account the position that the litigation has reached but, in the end, is influenced most strongly by my view as to the extent of the relevance, if any, of this material.

20 For those reasons I decline the defendants' applications.

Administration Act 1953

CORPORATE SYSTEMS PUBLISHING PTY LTD -v- LINGARD [No 3] [2008] WASC 1 (18 January 2008)

At a glance

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Judgment (27 paragraphs)

CORPORATE SYSTEMS PUBLISHING PTY LTD -v- LINGARD [No 3] [2008] WASC 1 (18 January 2008)

Legislation Cited (1)

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