Joseph Lahoud & anor v Victor Lahoud & ors

JUDGMENT:

• 7 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

JOSEPH LAHOUD & ANOR v VICTOR LAHOUD & ORS Application under s 106 of the Industrial Relations Act 1996.

1 Joseph Lahoud (the first applicant) and Joseph Lahoud & Associates Pty Ltd (the second applicant) have sought by Notice of Motion to move the Commission for leave to use certain identified documents produced on summons for the purpose of these proceedings pursuant to s 106, for the purpose of other proceedings to enforce or otherwise recover the debt disclosed in those documents. 2 Those documents embrace the financial statements and income tax return of the second respondent for the year ending 30 June 1998, together with documents supporting the schedule of the second respondent's trade creditors as at 30 June 1998. 3 It was said that: The ground and reason on which this application is made is that there are special circumstances justifying the grant of such leave, including, inter alia, the nature of the documents, the circumstances in which they apparently came into existence and for which they were apparently used, the nature of the information in the documents, and the decisive contribution that the documents are likely to make in achieving justice in the other proceedings. 4 It is convenient to set out the background to this interlocutory decision as described in the applicant's outline of submissions in relation to the Notice of Motion: 1. By their [originating] summons, the applicants claim, inter alia, that they and [Victor Lahoud (the first respondent), Castle Constructions Pty Ltd (the second respondent) and Solidare Pty Ltd (the third respondent), referred to collectively as] the respondents, were party to arrangements whereby together they would contribute to, and work on, various development projects, and, in return, the applicants would share in any profit in the projects, or otherwise be compensated for their work and the commercial risks they shared with the respondents.

The respondents have responded to this claim with an affidavit made by the first respondent on 29 July 1999, in which he flatly denies both the existence of any such arrangement, and the right of the applicants - whether contractually, in fairness, or otherwise - to receive anything (other, perhaps, than some incidental amounts) as a consequence of their work for the projects.

Now, however, documents that recently have been produced in answer to various summons issued in these proceedings now reveal - from the applicants' point of view, for the first time - that, … while the respondents have in these proceedings denied that anything should be paid to the applicants, they have solemnly declared to the revenue authorities, not only that $2,775,000 should be paid to the applicants, but also that was actually paid almost two years ago.

7. The applicants have filed and served accounting evidence that quantifies their claim in an amount considerably more than $2,775,000.

8. Now, however, they wish to take other proceedings to enforce or otherwise recover the debt of $2,775,000.

9. That will leave for these proceedings a dispute about the rest of the applicants' claim. 5 It was contended by the applicants that the documents are almost certain to make a decisive contribution to achieving justice in the second proceedings, containing as they do emphatic and unambiguous admissions on the part of the first and second respondents that the sum of at least $2,775,000 has been due and payable to the applicants since at least 30 June 1998. 6 The essence of the respondents' submissions in relation to the Notice of Motion was that: 3. It would be an abuse of process for the applicants to commence other proceedings (1) to enforce contracts which they are seeking to vary in these proceedings, and (2) for an order for the payment of money which the Commission has jurisdiction to make.

The Commission should not facilitate an abuse of process by releasing the applicants from their undertakings to the Commission in relation to these documents.

The release of the applicants from their undertakings to the Commission is also unnecessary because any fresh proceedings will be stayed by the relevant court pending the determination of these proceedings.

These documents are not necessary to enable the applicants to commence new proceedings. They are not sufficient on their own to prove a claim by the applicants. The applicants will still need to prove a contractual entitlement and a breach in the other proceedings. They can subpoena these records when their new proceedings have commenced, if they believe the documents have corroborative value.

23. The applicants want the Commission to release them from an undertaking that they will not use documents for an ulterior purpose that were obtained under the processes of the Commission. The ulterior purpose is fresh proceedings between the same parties in which the same sum of money is sought. Such duplicity of proceedings is an abuse of process. The Commission has a discretion to release or not to release the applicants from their undertaking. This is a circumstance where the Commission manifestly should not release them.

24. The motion should be dismissed with an order for indemnity costs in favour of the respondents. 7 It was also said by the respondents: 7. The submissions of the applicants contain, and depend on, a number of assertions of fact which are unsupported by reference to any evidence. The respondents do not concede the accuracy of any of these assertions of fact. 8 Mr Neil of counsel, in reply, submitted that if the sum is not in dispute it ought to be paid. Indeed, so say these documents, the sum should have been paid in the year ended 30 June 1998, almost two years ago, and there are quick and easy ways of recovering sums which are not in dispute. They can be taken outside these proceedings. To take those steps is plainly not an abuse of process. That is the first ground. 9 As to the second ground, it is said these documents do not say what the applicants say of them. The applicants of course say that these documents constitute the plainest admission to a third party, the revenue authorities, as well as to any of the financiers and other people to whom Mr Hackett suggests the financial statements might be shown, that that amount at least, $2,775,000, was due and payable in the year ending 30 June 1998. That is what is plainly stated in the financial statements. That is what is plainly stated in the income tax return, and that is the plain foundation of the substantial deduction of which the second respondent took the benefit in the income tax year ending 30 June 1998. Consideration 10 There was no demur to the applicant's submission that it is accepted on all sides that (a) the applicants require the Commission's leave to use the documents for the purpose of any other proceedings, (b) the Commission has a discretion to give that leave, and (c) leave will be given in special circumstances. 11 The applicants relied upon the principles as to "special circumstances" set out by Wilcox J in Springfield Nominees Pty Ltd v Bridgeland Securities Ltd (Springfield Nominees) [(1992) 38 FCR 217 at 225]. 12 The applicants concede that the difference between the total sum claimed and the amount that is claimed in fairness in these proceedings is in dispute, but the $2,775,000, say the applicants, on the basis of the contents of these documents, is not in dispute and cannot be in dispute, and it is in support of that claim or that latter claim that the applicants propose to take other steps outside of these proceedings. 13 In Springfield Nominees, Wilcox J was dealing with an application for leave to use in subsequent proceedings a witness statement filed in earlier proceedings, but which statement, because the proceedings settled before trial, was never tendered in Court. Wilcox J considered the application before him by analogy with the principles relating to the use of a document produced on discovery in legal proceedings (which is closer to the actual situation in relation to this instant Notice of Motion). 14 Wilcox J discussed a number of authorites. In Home Office v Harman ([1983] AC 280) it was agreed that there was a principle of law that an order for discovery is subject to an implied undertaking by the solicitor obtaining that order not to use or allow the documents, or copies of them, to be used for any collateral or ulterior purpose; that is, otherwise than for the purposes of the litigation in which discovery is given. The general principle applied in Harman (supra) was re-affirmed in Crest Homes Plc v Marks ([1987] 1 AC 829) in which at 860 Lord Oliver referred to a general principle "that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery". 15 Wilcox J later set out a number of factors that are relevant to the exercise of the court's discretion, concluding by saying that, perhaps the most important of all, was the likely contribution of the document to achieving justice in the second proceeding. 16 In my view, to grant the leave sought in the Notice of Motion would not assist the achievement of justice between these parties. 17 The "other proceedings" elsewhere in which the applicants originally sought leave to use these documents were those to be instituted to recover the sum of $2,775,000. That request has since been broadened to allow them to be used in proceedings before the Supreme Court on 22 June. The second applicant had lodged caveats on the certificates of title relating to certain real property held by the second respondent. The real property is some of the property the subject of the projects which are, in turn, the subject of these proceedings. The second respondent has now served a notice on the applicant requiring the second applicant to obtain an order from the Supreme Court extending those caveats by the 22nd of this month. Failing that, the caveats will lapse. 18 The sum of $2,775,000 is part of a larger sum claimed by the applicants in these proceedings. It can be dealt with in the context of these proceedings as a whole. To hive it off elsewhere has the potential for parallel proceedings involving the same parties and the same evidence, which is a circumstance to be avoided if at all possible, with the additional concern that what is involved is a contract that, depending upon the outcome of the ss 105 and 106 application for relief, may be avoided, or varied, ab initio. 19 Furthermore, the respondents dispute the applicants' claim that they have admitted that the sum of $2,775,000 is due and payable by the respondents. It remains to be proved as a debt by the applicants in both the other proceedings. 20 There was limited accounting information before me, that information being contained in the affidavits of Anthony Francis Hackett filed in support of the respondents' response to the Motion, and that of Phillip Steven Rowe, filed in reply to Mr Hackett. 21 It was apparent from those affidavits, neither of whose deponents was required for cross examination, that the applicant's claim of "emphatic and unambiguous admissions" is vigorously resisted and is a claim that could not be determined by me on the material before me as to this Notice of Motion. 22 Upon consideration I accept the position put by both parties that it would not be necessary for the Court to consider that material in order to determine the Notice of Motion. 23 The leave sought in this Notice of Motion by the applicants to use the identified documents for the purpose of other proceedings is refused. 24 Indemnity costs are sought by the respondents. The Court has not been addressed on that aspect. If agreement as to costs cannot be reached, the parties may make further short submissions.

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