Plaintiffs v Defendants

Supreme Court of Victoria|2022-08-24|Before: DELANY J

PRACTICE AND PROCEDURE - Application to 'split' trial requiring defendants to close its case so as to enable the plaintiff to determine whether to elect to give evidence or maintain right to silence due to claim of privilege against self‑incrimination in relation to existing criminal proceeding - Whether 'split' trial is in the interests of justice - Whether plaintiff would otherwise be required to prove a negative - Whether issues relating to the application for 'split' trial are intertwined with other issues in the proceeding - Consideration of disruption to timely and efficient conduct of trial - Importance of right to silence - Consideration of seriousness of criminal charge and exposure to criminal prosecution - Consideration of ability to obtain a certificate pursuant to s 128 of the Evidence Act 2008 (Vic) Application refused - Evidence Act 2008 (Vic), (Vic) - (Vic), - ; , applied - ; ; ; , considered.

For the Plaintiffs by Original Proceeding and First Defendant by Counterclaim

For the First to Third Defendants by Original Proceeding and Plaintiffs by Counterclaim

For the Plaintiff by Original Proceeding and First Defendant by Counterclaim

For the Defendant by Original Proceeding and Plaintiff by Counterclaim

1 This ruling concerns an application in proceeding S ECI 2019 04430 ('the Timeless Sunrise proceeding') that the plaintiffs ('the David Brandi parties') be permitted to split their case at trial in relation to forgery allegations concerning transactions which relate to two mortgages made against David Brandi, which are relied upon in the Defence and Counterclaim of the first to third defendants ('the Jason Brandi parties').

2 The Timeless Sunrise proceeding is being heard and determined together with three other proceedings: proceeding S ECI 2020 01675, proceeding S ECI 2020 04804 and proceeding S ECI 2021 04644 ('the Zigaroo proceeding'). Prior to trial, an order was made that evidence in the Timeless Sunrise proceeding, S ECI 2020 01675 and S ECI 2020 04804, is evidence in the Zigaroo proceeding. All four proceedings concern the Brandi family. For convenience, in these reasons, and with no disrespect intended, I will refer to the members of the Brandi family by their given names.

3 David Brandi ('David') is the middle sibling of three children of Erminio Brandi, ('Ernie') (deceased, and Fernanda Brandi ('Fernanda'). Tania Brandi ('Tania') is the eldest child and Jason Brandi ('Jason') is the youngest.

4 David, and the companies associated with him - Timeless Sunrise Pty Ltd ('Timeless Sunrise') and Mr Landlord Pty Ltd - make a number of claims in the Timeless Sunrise proceeding against Jason and companies controlled by him - Big J Enterprises Pty Ltd, and PDJ Crew Pty Ltd ('PDJ Crew') as trustee of the PDJ Crew Unit Trust. Other defendants in the Timeless Sunrise proceeding include Zigaroo Pty Ltd (Administrators Appointed) (ACN 006 005 401) ('Zigaroo') as trustee of the MK No 13 Trust.

5 In proceeding S ECI 2020 01675, Tania is the plaintiff and David is the defendant. In proceeding S ECI 2020 04804, David is the plaintiff and Jason is the defendant. In the Zigaroo proceeding, David and his wife Tina Brandi are the plaintiffs, and Zigaroo is the defendant.

6 The disputes which are the subject of the trial arose following the breakdown in the relationship between David and Jason in October 2018. David and his wife Tina (and their interests) are opposed in the litigation to Jason, Tania, and their parents, Fernanda and Ernie. Ernie made two affidavits in the Timeless Sunrise proceeding prior to his death. Fernanda, aged 87, is currently the sole director of Zigaroo.

7 Over many years prior to the breakdown in their relationship, David and Jason, both personally and via entities controlled by them, engaged in a number of property investments and developments.

8 The subject matter of the main claims made by the David Brandi parties in the Timeless Sunrise proceeding concerns a development site at 9 Newsom Street, Ascot Vale ('Newsom Street'), held in the name of PDJ Crew. Newsom Street was sold in June 2020 and the sale proceeds were paid into trust. The David Brandi parties allege an entitlement to 50% of the units in the PDJ Crew Unit Trust. They allege that the sale of Newsom Street in June 2020 by PDJ Crew under Jason's control was in breach of fiduciary duty. The Jason Brandi parties deny that the David Brandi parties, or any of them, ever had any interest in the PDJ Crew Unit Trust, or Newsom Street. They deny any duty was owed concerning the sale of Newsom Street in June 2020 and they deny breach.

9 Other disputes raised by the David Brandi parties in the Timeless Sunrise proceeding concern:

(a) the MK No 13 Trust, a discretionary trust of which Zigaroo is the trustee and David and Jason are specified beneficiaries and the (joint) appointors and guardians;

(b) a property at 2072 Inverloch-Venus Bay Road, Tarwin Lower, held in a trust structure with 60% of the interests held and controlled by David and Jason equally, but with the remaining 40% interests held by investors external to the Brandi family;

(c) a property at Lot 28, 157 Epsom Road, Ascot Vale, being air rights to a completed unit development with all other units having previously been sold. Lot 28 is held in the name of The Little Man Holdings Pty Ltd in which David and Jason each hold a 50% interest;

(d) a property at 48 Holmes Road, Moonee Ponds, previously owned by David and Jason as equal tenants-in-common until sold by mortgagee sale in December 2021 (the net sale proceeds were paid into Court); and

(e) a property at 86 Cooper Street, Essendon where Fernanda and Jason live, owned by David and Jason as equal tenants-in-common;

10 By their further amended counterclaim ('FAC') in the Timeless Sunrise proceeding, the Jason Brandi parties make a number of monetary claims against David and against Childs Play International Pty Ltd ('Childs Play'). Childs Play is a company that currently operates the accounting practice 'Brandi & Co', a business established by David and which, over the years, provided accounting services to Jason and entities associated with him. The counterclaim against David and Childs Play alleges breaches of fiduciary duty and of retainer, both by David and by Childs Play. In addition, Jason and PDJ Crew make substantial claims against David pursuant to a guarantee, alleged to have been given by David in relation to loans to a steel making business in which David was involved, conducted at the relevant time by Independent Tube Mills Pty Ltd (in liquidation) ('ITM'). The guarantee upon which the Jason Brandi parties rely is not in the possession of the Jason Brandi parties and no copy of the alleged guarantee is included in the Court Book (which currently comprises over 16,000 pages).

11 In proceeding S ECI 2020 01675, Tania makes a claim against David in relation to a guarantee alleged to have been given by him concerning loans made to ITM. In substance, this claim is the same as the guarantee claim made by Jason and PDJ Crew. No copy of the guarantee relied upon by Tania is included in the Court Book.

12 Related to the personal guarantee disputes in the Timeless Sunrise proceeding and proceeding S ECI 2020 01675, David seeks orders against Jason, PDJ Crew, Tania and the Registrar of Tiles for the removal of caveats lodged over a property of which he is the registered proprietor at 111 Wellington Parade South, East Melbourne.

13 In the Zigaroo proceeding, David and Tina seek orders that Zigaroo holds the proceeds of sale of the property at 306 Ascot Vale Road, Moonee Ponds, on trust for them. That property was sold in October 2021. The sale proceeds were paid into Court. Administrators were appointed to Zigaroo on 11 July 2022. On 22 July 2022, the Court gave leave to proceed against Zigaroo in the Timeless Sunrise proceeding.[1]

14 The trial of the proceedings commenced on 15 August 2022. Opening addresses occupied more than four full days and have now concluded. It is necessary to rule on the split trial application before witnesses commence to give evidence.

15 At the outset of the trial, the application by the David Brandi parties was broader; it was to split the trial concerning three issues pleaded by the Jason Brandi parties in their FAC, but also relied upon by them in their Defence. On the fifth day of the trial the application was amended to delete references to two of the three issues, leaving issues relating to the alleged forgery by David of two mortgages and associated documents as the sole subject matter of the application.

16 The proposed orders for which the David Brandi parties contend, which have been marked up to reflect the abandonment of two of the three issues are as follows:

The trial of the proceeding (and the Related Proceedings) be split on the basis that:

(a) in the David Brandi parties' case and Child's Play's case:

(i) the David Brandi parties and Child's Play will not be required to lead evidence directed to:

(A) in paragraphs 9A to 12AD, 12B to 12J and 26B to 26J of the Further Amended Counterclaim dated 10 February 2022: and

(B) in paragraphs 21(g)(ii), 23, 42(b), 43(a), 43(c), 44, 45, and 47 of the Further Amended Defence dated 9 February 2022 (FAD) insofar as they refer to and rely upon any issue referred to in paragraphs 1(a)(i)(A) of this Order;

(ii) unless the David Brandi parties have led evidence on the issue, there be no cross-examination of any of the David Brandi parties' witnesses in relation to any matter referred to in order 1(a)(i) above;

(iii) unless Child's Play has led evidence on the issue, there be no cross-examination of any of Child's Play's witnesses in relation to any matter referred to in order 1(a)(i) above;

(b) unless the David Brandi parties have led evidence on the issue, the David Brandi parties may have a case in rebuttal on the issues set out in order 1(a)(i) above;

(c) unless Child's Play has led evidence on the issue, Child's Play may have a case in rebuttal on the issues set out in order 1(a)(i) above;

(d) the David Brandi parties have leave to file an amended reply and an amended defence to the Further Amended Counterclaim at the conclusion of the Jason Brandi Defendants' case on the issues set out in order 1(a)(i) above.[2]

17 The revised form of order limited in paragraph (a)(i)(A) to paragraphs 9A-12AD of the FAC provides for the issues concerning the alleged forgery by David of a mortgage over Newsom Street in favour of Atida Pty Ltd ACN 166 407 898 ('Atida'), Perpetual Corporate Trust Limited ABN 88 602 779 993 ('Perpetual'), Frilara Pty Ltd ACN 132 822 989 ('Frilara') and Fralara Pty Ltd ACN 132 822 970 ('Fralara') ('Atida mortgage') dated 4 October 2018,[3] and associated documents, to be the subject of a split trial order. The Atida mortgage was preceded by a caveat lodged over Newsom Street on 31 May 2018, by which CEG Direct Securities Pty Ltd ('CEG') claimed an interest as mortgagee ('CEG Caveat').[4] The CEG mortgage and various associated documents are also alleged to be forgeries by David.[5] If the split trial order now contended for by the David Brandi parties is made, issues concerning the CEG mortgage will also be the subject of that order.[6] Paragraph 1(a)(B) of the proposed split trial order cross-references the issues relied on in paragraphs 9A-12AD of the FAC to relevant paragraphs of the Jason Brandi parties' further amended defence in the Timeless Sunrise proceeding dated 9 February 2022 ('FAD').

18 The two issues no longer pressed as part of the split trial application concern a 2016 loan from a company called Leaning Back Pty Ltd ('Leaning Back') and a loan entered into by PDJ Crew with the Westpac Banking Corporation in February 2008.

19 The following is alleged in relation to these matters:

(a) Leaning Back, a company controlled by David, made a loan for approximately $2 million to PDJ Crew.[7] The Jason Brandi parties allege the loan was entered into on the basis of false representations made by David in September 2016 and repeated in July and November 2017.[8] Dishonest breach of fiduciary duty is alleged against David.[9]

(b) The Jason Brandi parties alleged that on 21 February 2008, PDJ Crew applied to Westpac for a loan and that Jason's signature on the loan application was forged.[10]

20 There is also an the implied allegation of forgery by David of the financial statements of the PDJ Crew Unit Trust dated 30 June 2015 and 30 June 2016.[11] This implied forgery is pleaded as follows:

(a) the Jason Brandi parties allege that David asked Jason if PDJ Crew could advance him the proceeds of the loan the subject of the Westpac Loan Application as an interest-free loan ('David Brandi Loan');[12]

(b) the accounts of the PDJ Crew Unit Trust dated 30 June 2015 signed by David and lodged with the Australian Taxation Office recorded the David Brandi Loan amount to be $593,532; and

(c) in the period from 30 June 2015 to 30 June 2016, PDJ Crew did not receive any repayment for the David Brandi Loan and $593,532 remains owing by David.[13]

21 The two issues no longer pressed are pleaded at those paragraphs of the FAC struck through in paragraph 15 above.

22 The David Brandi parties have provided a trial plan, depicting how the course of the trial in which all four proceedings are to be heard and determined together is anticipated to unfold if a split trial order is made. In accordance with that plan:

(a) David will be the first witness for the plaintiffs. It is proposed that he will give evidence and be cross-examined on all matters excluding the Atida and CEG mortgages.

(b) The evidence of his wife, Tina Brandi and the expert evidence of a land valuer, Luana Kenny, concerning the value of Newsom Street as at April 2022, will follow.

(c) Next, the Jason Brandi parties' lay and expert witnesses will give their evidence, including a handwriting expert as to forgery, including of the Atida and CEG mortgages, Melanie Holt and a witness subpoenaed to give evidence, a solicitor, Michael Skerrett, whose signature on the Atida and CEG mortgages and certain related documents is alleged to have been forged.

(d) After the Jason Brandi parties have led all of their evidence, including evidence from Jason, Tina and Fernanda, the David Brandi parties will have the option to decide whether or not to call evidence, including evidence from David, in relation to the Atida and CEG mortgages.

(e) Thereafter, the lay witnesses for Childs Play in the Timeless Sunrise proceeding and the remaining witnesses relied on by David and Tina Brandi in the Zigaroo proceeding will give their evidence. Childs Play support this proposed trial plan and support the split trial order.

23 The split trial order is opposed by the Jason Brandi parties. In short, they submit that:

(a) the interests of justice do not favour a split trial order;

(b) the issues in the four proceedings are intertwined (and that includes the Atida and CEG mortgages);

(c) they would be materially prejudiced in their ability to cross-examine David as to credit if not permitted to cross-examine him concerning the Atida and the CEG mortgages; and

(d) the fact of those mortgages being arranged by David, facts not known to Jason until January 2019, are relevant to PDJ Crew and Jason's defence of claims against them by David for the sale of Newsom Street in breach of trust and in pursuit of a dishonest and fraudulent design.[14]

24 The Jason Brandi parties rely upon the expert evidence of Ms Holt to seek to establish that David Brandi forged Jason's signature on over 100 occasions. They allege that David forged Tina's signature and that critical documents concerning the purported transfer of units in the PDJ Unit Trust were backdated from 2019 to 1 July 2014. The alleged forgery of the Atida and the CEG mortgages is said to be relevant not just to the Jason Brandi parties' counterclaim but, as alleged in the FAD, to be relevant to the defence by Jason of claims made against him by the David Brandi parties.[15]

25 For the reasons that follow, I have determined that this is not an appropriate case to make the split trial order sought. Instead, the appropriate course in the interests of justice and so as to achieve fairness to all parties, is, as was canvassed in argument, to require Mr Skerrett and Ms Holt's evidence to be given first, before David or any of the witnesses to be called on behalf of the David Brandi parties is required to give their evidence.

26 Before referring to the applicable principles and legislation relevant to the determination of the application, it is necessary to identify the pleadings in the Timeless Sunrise proceeding and to consider the issues in the proceedings more generally.

27 The current pleadings in the Timeless Sunrise proceeding include:

(i) Third Further Amended Statement of Claim dated 18 July 2022 ('FASC');

(ii) FAD dated 9 February 2022;

(iii) Defence of the Fourth Defendant (Zigaroo) dated 12 February 2021;

(iv) Reply to Amended Defence dated 25 March 2021;

(v) FAC dated 10 February 2022;

(vi) First Defendant's Defence to Further Amended Counterclaim dated 25 March 2022 ('DFAC');

(vii) Second Defendant's Defence to Further Amended Counterclaim dated 10 May 2022; and

(viii) Reply to First Defendant's Defence to Further Amended Counterclaim dated 20 July 2022.

28 On 12 August 2022, the Jason Brandi parties informed the Court that they seek leave to file a second Further Amended Defence and a second Further Amended Counterclaim. Although the application to amend is yet to be determined, as only one issue raised by the amendment is contentious, in opening and for the purposes of the split trial application the parties proceeded on the basis of the proposed draft pleadings.

29 Pursuant to pre-trial orders pursuant to s 23 of the Civil Procedure Act 2010 (Vic) ('the CPA'), on 10 June 2022 the parties in all proceedings, except the Zigaroo proceeding, filed an Updated Joint Statement of Issues. That statement provides a convenient summary of the issues for determination on the pleadings in those proceedings:[16]

(a) Regarding the PDJ Crew Unit Trust and Newsom Street:

(i) whether the PDJ Crew Unit Trust was established in 1 July 2007 or March 2008, with PDJ Crew as trustee and BigJ Enterprises and Melbourne Property Group Pty Ltd ('MPG') (a company associated with David) as equal unitholders pursuant to the terms in the trust deed;

(ii) whether the transfer of 60 units in the PDJ Crew Unit Trust from MPG to Timeless Sunrise took place in 2014;

(iii) whether documents relied upon by the David Brandi parties were only created in 2019;

(iv) whether the transfer of units was valid and effective, or whether the units vest in Mr Landlord Co upon its appointment as trustee of the (David) Brandi Family Trust;

(v) whether Newsom Street became assets of the PDJ Crew Unit Trust such that the property and the sale proceeds are held by PDJ Crew in its capacity as trustee of the PDJ Crew Unit Trust;

(vi) whether Jason pursued the sale of Newsom Street in a time and manner that was disadvantageous, thereby resulting in a sale at an undervalue;

(vii) whether PDJ Crew owed and breached its fiduciary duties as trustee of the PDJ Crew Unit Trust (further, whether the liabilities and expenses incurred or paid by PDJ Crew, or on its behalf under Jason's ownership and control, were not properly incurred); and

(viii) if Newsom Street, and the proceeds of sale therefrom, are not held by PDJ Crew as trustee of the PDJ Crew Unit Trust, whether Jason and PDJ Crew hold those assets on constructive trust for David such that they are liable to account to him in respect of his alleged beneficial interest.

(i) Who are the beneficiaries and what are the assets of the MK No. 13 Trust?

(ii) Has Zigaroo breached its duties as trustee of the MK No. 13 Trust?

(iii) Is Jason liable as an accessory for Zigaroo's breach of trust?

(c) Regarding the claims by the Jason Brandi parties concerning the CEG loan and Atida mortgage:

(i) Did David and/or Brandi & Co (Childs Play) breached their fiduciary duties in connection with the CEG loan and Atida mortgage?

(iii) Have Jason and/or PDJ Crew suffered detriment as a result of the alleged breaches ($173,000 in legal costs is alleged to have been incurred by Jason and PDJ Crew seeking to secure the removal of the Atida mortgage)?

(d) Regarding Tarwin Group Pty Ltd and 2072 Inverloch-Venus Bay Road, Tarwin Lower:

(i) Was the transfer of 25 units in the JAG Group Unit Trust from MPG to Timeless Sunrise documented as having occurred in July 2014 a valid transfer?

(ii) If that transfer was not valid, do the 25 units vest in Mr Landlord Co?

(e) Regarding Lot 28, 157 Epsom Road, Ascot Vale: who should be appointed as trustee of the trust property in the place of The Little Man Holdings Pty Ltd?

(f) Regarding the removal of Caveats over the East Melbourne Property: do Jason and/or PDJ Crew have an interest in the East Melbourne Property arising from personal guarantees alleged to have been given by David as alleged in the caveats?

(g) Regarding claims advanced by the Jason Brandi parties:

(i) Whether Jason and his associated entities retained David and/or Brandi & Co (i.e. Childs Play) pursuant to the Retainer alleged?

(ii) If so, whether David and/or Brandi & Co (i.e. Childs Play) owed fiduciary duties to Jason and his associated entities; and

(iii) If so, whether those duties were breached.

(h) Regarding the claim by PDJ Crew against David for loan:

(i) whether David and PDJ Crew entered into a loan between February and April 2008; and

(ii) whether $593,532 is due and payable by David.

(i) Regarding the claim by PDJ Crew in respect of the David Brandi ITM Loan:

(i) whether David entered into the David Brandi ITM Loan with PDJ Crew in the amount of $624,585.46;

(ii) if so, was the entry into that loan in breach of David's fiduciary duties to PDJ Crew and/or Jason.

(j) Regarding the claim by PDJ Crew against David for the ITM Loan ('PDJ Loan Agreement'):

(i) whether PDJ Crew entered into a loan agreement with ITM in respect of which David provided a personal guarantee in the terms alleged;

(ii) whether David acknowledged the debt owed by ITM to PDJ Crew at the time of ITM's liquidation; and

(iii) whether, under the personal guarantee provided by David, David is liable for the sum of $9,425,021 to PDJ Crew.

(k) Regarding the claim by Jason against David for the ITM loan:

(i) whether David, Jason and Tania entered into a joint loan agreement with ITM to which David provided a personal guarantee in the terms alleged;

(ii) whether David acknowledged the debt owed by ITM to Jason at the time of ITM's liquidation;

(iii) whether David made a part repayment of the Joint Loan Agreement in the sum of $250,667 on 17 October 2016;

(iv) whether David is liable for the sum of $2,769,845 (as at February 2021) to Jason under the joint loan agreement; and

(v) whether David made a part repayment of the joint loan agreement in the sum of $250,667 on 17 October 2016.

(l) Regarding the claim in respect of Leaning Back Pty Ltd:

(i) whether David and/or Brandi & Co (i.e. Childs Play) breached their fiduciary duties to Jason and/or PDJ Crew in connection with the Leaning Back loan of $2 million by misrepresenting that Leaning Back Pty Ltd was a company controlled by Sanjeev Gupta when it was in fact a company controlled by David; and

(ii) if so, what is the appropriate measure of damages in respect of such breach.

(m) Regarding the production of financial documents: are Jason, BigJ Enterprises and PDJ Crew entitled to an order for the production of all books and records held by David, and/or Brandi & Co (i.e. Childs Play), and/or David's representatives relevant to the financial affairs of Jason, BigJ Enterprises and PDJ Crew?

(n) Regarding Cooper Street and Holmes Road: what orders should be made in relation to these properties and any proceeds of sale?

(o) Regarding the claim by Tania against David:

(i) whether Tania entered into a joint loan agreement with ITM in respect of which David Brandi provided a personal guarantee;

(ii) whether David acknowledged the debt owed by ITM at the time of ITM's liquidation;

(iii) whether David is liable for the sum of $250,000 plus interest outstanding under the joint loan agreement;

(iv) whether the guarantee provided Tania with a right to lodge a caveat on land owned by David; and

(v) whether David is entitled to an order withdrawing the caveat.

30 The plaintiffs in the Zigaroo proceeding have filed a separate list of issues in that proceeding. There is no need to refer to that list in this ruling.

The Pleadings Concerning the Atida and CEG Mortgages

31 The allegations in paragraphs 9A-12AD of the FAC to which the application relates are identified below.

32 The Jason Brandi parties allege that the following documents were claimed to support the CEG Caveat:

9B.1 a purported Loan Agreement between CEG and PDJ Crew, dated 30 May 2018 (CEG Loan);

9B.2 a purported General Security Agreement between CEG and PDJ Crew, dated 30 May 2018;

9B.3 a purported Guarantee and Indemnity given by Jason and David in favour of CEG, dated 30 May 2018;

9B.4 a purported Agent Certification of Michael Skerrett (Skerrett), solicitor, on 30 May 2018 relating to Jason;

9B.5 a purported Agent Certification signed by Chris Lilley (Lilley), solicitor from Dorsia Legal, on 30 May 2018 relating to David;

9B.6 a purported Australian Legal Practitioner's Certificate of Skerrett, solicitor, dated 30 May 2018;

9B.7 an Australian Legal Practitioner's Certificate, dated 30 May 2018 signed by Lilley and David;

9B.8 purported Mortgage provided by PDJ Crew in favour of CEG, dated 31 May 2018;

9B.9 a purported Representations by Mortgagors, dated 30 May 2018;

9B.10 a purported Settlement Instruction;

9B.11 a purported Power of Attorney, dated 30 May 2018 in relation to Jason;

9B.12 a Power of Attorney, dated 30 May 2018 and signed by David and witnessed by Lilley; and

9B.13 a purposed Power of Attorney, dated 30 May 2018 in relation to PDJ Crew.[17]

(a) The documents listed in 9B.1-9B.3, 9B.6, 9B.8, 9B.9, 9B.10 and 9B.12 of the FAC, extracted above, were not signed by Jason, whether on behalf of PDJ Crew or in his personal capacity. It is alleged that David forged Jason's signature on those documents.[18]

(b) The documents listed in 9B.4, 9B.6 and 9B.12 of the FAC, extracted above, were not signed by Mr Skerrett. It is alleged that David forged Mr Skerrett's signature on those documents.[19]

34 Separate from the forgery allegations, the Jason Brandi parties allege the following:

(a) The purpose of the CEG Loan, as that term is defined in the FAC, was to buy steel coils.[20]

(b) Dorsia Legal purported to act for PDJ Crew in relation to the CEG Loan without receiving any instructions to do so from Jason.[21]

(c) On either 30 or 31 May 2018, funds were advanced by CEG pursuant to the CEG Loan and were disbursed to the trust accounts of Maddocks and Dorsia Legal.[22]

(d) On approximately 1 June 2018, Dorsia Legal withdrew $164,276.48 from the Dorsia Legal trust account and transferred those funds by electronic funds transfer to PDJ Crew's account with the NAB.[23]

(e) All transactions in relation to funds received into and disbursed out of the Dorsia Legal trust account in connection with the CEG Loan were made on the instructions of David to Dorsia Legal.[24]

(f) At all material times, neither PDJ Crew nor Jason had any knowledge of the existence of the CEG Loan, any of the documentation referred to paragraph 9B of the FAC (as extracted above) concerning the CEG Loan, the CEG Caveat, or the funds received or disbursed pursuant to the CEG Loan.[25]

35 The Jason Brandi parties allege that the following documents were claimed to support the Atida mortgage:

9P.1 a letter from Ron Fuchs of Cornwall Stodart (acting for the mortgagees) to Lilley of Dorsia Legal (purportedly acting for PDJ Crew), dated 23 August 2018;

9P.2 a purported Facility Agreement between Frilara, Fralara Pty Ltd ACN 132 822 970, Perpetual Corporate, Atida, PDJ Crew and Jason (undated) (Facility Agreement);

9P.3 a purported mortgage form naming PDJ Crew as mortgagor and Frilara, Perpetual Corporate and Atida as mortgagees (Mortgage Form);

9P.4a Memorandum of Common Provisions AA3553 (MCP);

9P.5 a purported General Security Deed between Frilara, Fralara Pty Ltd CAN 132 822 970 (Fralara), Perpetual Corporate, Atida and PDJ Crew (General Security Deed);

9P.6 a purported Resolution of the Sole Director of PDJ Crew (undated);

9P.7a purported Statutory Declaration of Jason on behalf of PDJ Crew, dated 1 September 2018;

9P.8 a purported Acknowledgment by Guarantor by Jason, (undated) (Guarantee);

9P.9a purported Australian Legal Practitioner's Certificate 1 of Skerrett, regarding PDJ Crew, dated 3 September 2018;

9P.10 a purported Australian Legal Practitioner's Certificate 2 of Skerrett regarding Jason, dated 3 September 2018; and

9P.11 a purported Form of Acknowledgment given by a borrower of surety to the Australian legal practitioner, by Jason and Skerrett, dated 3 September 2018.[26]

(a) the documents listed in 9P.2-9P.7a and 9P.11 of paragraph 9P of the FAC (extracted above) were not signed by Jason, whether on behalf of PDJ Crew or in his personal capacity or at all. It is alleged that David forged Jason's signature on those documents.[27]

(b) The documents listed in 9P.9a-9P.10 of paragraph 9P.11 of the FAC (extracted above) were not signed by Mr Skerrett and otherwise do not contain his signature. It is alleged that David forged Mr Skerrett's signature on those documents.[28]

(a) The purpose of the Facility Agreement was to repay the debt to CEG.[29]

(b) Dorsia Legal purported to act for PDJ Crew in relation to the Facility Agreement and matters related to it.[30]

(c) On approximately 4 October 2018, funds were advanced and disbursed pursuant to the Facility Agreement which included payments to the Ronayne Lawyers and Dorsia Legal trust accounts.[31] Further, between 5-8 October 2018, several transfers were made from the Dorsia Legal trust account.[32]

(d) All transactions in relation to funds received and disbursed to and from the Dorsia Legal trust account in connection with the mortgage were made on the instructions of David to Dorsia Legal.[33]

(e) None of the withdrawals referred to in paragraph (c) above were made with the authority or knowledge or consent of PDJ Crew or Jason, or for the benefit of PDJ Crew or Jason.[34]

(f) At all material times, neither PDJ Crew nor Jason had any knowledge of the existence of the Atida mortgage, the Facility Agreement, the documents referred to in paragraph 9P of the FAC or the matters referred to in paragraphs (a)-(c) above.[35]

(g) Further, Jason did not instruct Dorsia Legal to act on behalf of PDJ Crew in connection with the Atida mortgage, the Facility Agreement, the documents referred to in paragraph 9P of the FAC or the matters referred to in paragraphs (a)-(c) above.[36]

38 On 12 September 2019, the Atida mortgage was removed without notice to Jason or PDJ Crew.[37]

39 The Jason Brandi parties allege that the conduct with respect to the CEG Caveat and Atida mortgage (as set out in paragraphs 9A-9AA of the FAC) resulted in a breach of David's and Brandi & Co's fiduciary duties to PDJ Crew and/or Jason, which caused detriment to PDJ Crew and/or Jason, resulting in loss and damage.[38] It is also alleged that the conduct surrounding the CEG Caveat and Atida mortgage resulted in a breach of the retainer that the Jason Brandi parties allege was entered into between Jason and David and/or Brandi & Co from November 2001 until March 2019.[39]

Response from David Brandi Parties and Childs Play

40 In response to the CEG and Atida mortgage allegations, the David Brandi parties have pleaded as follows:

(a) The David Brandi parties admit that the CEG Caveat was lodged by Ronayne Owens Lawyers on 31 May 2018.[40]

(b) Concerning the balance of the FAC paragraphs that deal with the CEG allegations, the David Brandi parties plead:

He [David Brandi] does not plead to the allegations...on the grounds that he [David] claims privilege against self-incrimination and/or exposure to penalty, and he refers to and repeats paragraph 52 below.[41]

(c) The David Brandi parties admit that the withdrawal of the CEG Caveat was lodged on 4 October 2018 and the Atida mortgage was lodged on 4 October 2018.[42]

(d) The David Brandi parties admit that the Atida mortgage was discharged on 12 September 2019. It is alleged that the discharge of the Atida mortgage would have been apparent to PDJ Crew, Jason and their lawyers through a title search or alert during 12 to 23 September 2019.[43]

(e) Concerning the balance of the FAC paragraphs that deal with the Atida mortgage allegations, the David Brandi parties plead:

He [David Brandi] does not plead to the allegations...on the grounds that he [David] claims privilege against self-incrimination and/or exposure to penalty, and he refers to and repeats paragraph 52 below.[44]

41 In relation to the allegations of breach of fiduciary duty, the David Brandi parties deny that PDJ Crew and/or Jason suffered detriment and otherwise claim privilege against self-incrimination and/or exposure to penalty.[45]

42 In further answer to all of the claims advanced in the FAC, David seeks to set-off the amount of his claims pleaded in paragraphs 39 to 47 of the Statement of Claim against any liability arising from the claims in the FAC.[46]

43 In response to the allegations of breach of fiduciary duties and Retainer by virtue of the CEG and Atida mortgage, Childs Play:

(a) pleads that the allegations in sub-paragraphs (a)-(c) of paragraph 12AA and (a)-(c) of paragraph 12AC in the FAC are impermissibly rolled up, embarrassing, devoid of meaningful particulars and liable to be struck out;

(b) denies that any of the conduct alleged in paragraphs 9A to 9AA of the FAC, if established, was conduct of David attributable to Brandi & Co; and

(c) otherwise denies every other allegation.[47]

44 The Atida mortgage allegation is the subject of a pending criminal charge against David under s 83A(1) of the Crimes Act 1958 (Vic).

The accused at Toorak on 03/09/2018 did make a false document with the intention that he use that document to induce another person namely RON FUCHS to accept that document as being genuine and relying on that document did act to his prejudice in that fraudulently obtaining a 2nd mortgage loan for property 9 Newsom Street, Ascot Vale to the value of $3,976,000 by falsifying the signature of Jason BRANDI...[48]

46 The criminal matter is listed for return before the Magistrates Court of Victoria on 3 October 2022.[49] There has been no application by David to stay the Timeless Sunrise proceeding, or any of the other proceedings until after the completion of the criminal matter.

47 There is no evidence of criminal charges, actual or pending, or that there is a real or appreciable risk of criminal charges in relation to the CEG mortgage or any of the other matters arising on the pleadings.

48 Relevant to the split trial application are the allegations made by the David Brandi parties that Jason, through PDJ Crew, caused Newsom Street to be sold at an undervalue.

49 In January 2018, David and Jason received an offer from August Estates Pty Ltd to purchase Newsom Street for $15 million, plus GST.[50]

50 In his first witness statement, David alleges that he and Jason discussed whether to accept the offer on Newsom Street or wait until the application for the permit and amendment application process (to effect the re-zoning of Newsom Street) has been completed.[51] David says that he and Jason should continue with the permit and amendment process as the re-zoning would add value to the property, to which Jason allegedly agreed.[52]

51 It is common ground that David and Jason's relationship broke down in October 2018.

52 On 19 June 2020, Jason, through PDJ Crew, entered into a written contract of sale with Metro Ascot Vale Pty Ltd for the sale of Newsom Street for the sum of $10.5 million.[53]

53 The David Brandi parties allege that this sale process was pursued by Jason in a manner and at a time which was disadvantageous to PDJ Crew and resulted in the sale of Newsom Street at an undervalue.[54]

54 The David Brandi parties allege that the impact of Jason's conduct in relation to the sale process is apparent when considering the expert valuation report from Ms Kenny, who valued the Newsom Street Property as at 26 April 2022 (i.e. the date of her inspection) at $11.7 million, excluding GST.[55]

55 In oral submissions, senior counsel for the David Brandi parties stated that their case is not that the Court should use hindsight to determine that Jason acted inappropriately in selling Newsom Street when he did.[56] Rather, the allegation is that when the Court considers the real financial pressures faced by Jason, and the pressures exerted by his lawyers who were acting for him in the sale, PDJ Crew (of which Jason was a sole director and shareholder at the time)[57] as trustee for the PDJ Crew Unit Trust ought not to have sold Newsom Street at that time and in those circumstances.[58]

56 In response, counsel for the Jason Brandi parties submitted that the Jason Brandi parties should be able to cross-examine David in relation to the events that occurred from the breakdown of the relationship until the date of Ms Kenny's report.[59] Such cross-examination would inevitably include the facts and circumstances surrounding the presence of the CEG Caveat and mortgage and Atida mortgage in 2018. The Jason Brandi parties submit that if a split trial order is made, they will not be afforded with an opportunity to cross-examine David in relation to these matters.[60]

57 Counsel for the Jason Brandi parties submitted that the case put by the David Brandi parties fails to account for the circumstances that existed at the time, including the ongoing need to pay the costs of maintaining Newsom Street.[61] Further, the Jason Brandi parties submitted that Jason's motivations at the time were caused by David's actions in connection with the Atida mortgage.[62]

58 The circumstances in which a court will make a split trial order as a matter of practice and procedure and the considerations relevant to the making of such an order are well established. They were helpfully identified and discussed by Tate J (with whom Ashley JA agreed) in Clayton Utz (a firm) v Dale:[63]

In summary, the exercise of the discretion to oblige a defendant to lead its evidence in support of its defence first, before a plaintiff leads evidence on those issues, while guided by questions of whether the case for the plaintiff and the defendant are intertwined, is ultimately determined by matters of fairness. The question of who bears the onus of proof on any issue is important but not decisive. It is also important to consider the extent to which a plaintiff would otherwise be obliged to prove a negative.[64]

59 In a number of other decisions, including Protean (Holdings) Ltd v American Home Assurance Co,[65] French v Triple M Melbourne Pty Ltd (Ruling No 2),[66] Simpson Ltd v Arcipreste,[67] S, DJ v Channel 7 Adelaide Pty Ltd,[68] Marsden v Amalgamated Television Services Pty Ltd,[69] Slater v Smith,[70] and Roberts-Smith v Fairfax Media Publications Pty Ltd (No 13)[71] (among others) courts have considered applications for split trial orders. Drawing on those authorities, particularly Dale, the position is as follows:

(a) First, a direction to order a 'split trial' is a matter of practice, not a matter of law.[72] Whether such an order should be made is ultimately determined by matters of fairness.

(b) Second, a critical factor is whether the evidence the plaintiff seeks to reserve is properly 'a rebutting case', or whether it forms part of the plaintiffs' own case.

(c) The question of who bears the onus of proof on an issue is not decisive as to who should lead evidence first.[73]

(d) A guiding principle for the exercise of the discretionary power is the extent to which the plaintiff would otherwise be obliged to prove a negative.[74] On the facts in Protean Holdings, Marks J regarded the extent to which the plaintiff would be required to do so 'highly pertinent and of considerable weight'.[75]

(e) Even where each party knows what it is that its opponent contends, to require the plaintiffs' expert evidence to be given first will require, at least to some degree, the giving of expert evidence in a factual vacuum.[76]

(f) A split trial order is less likely to be made where the issues the subject of the proposed split trial order are intertwined with other issues.[77] The extent to which the issues are intertwined is an important consideration.

(g) Where there is difficulty separating out the issues with respect to which the plaintiffs have the burden of proof, permitting that evidence to be led without the plaintiff also embarking on evidence to counter anticipated evidence of the defendant will be a factor against making a split trial order.[78]

(h) Consideration must be given to whether it is unreasonable to expect counsel for the defendant to cross-examine the plaintiff on certain issues while at the same time being prevented from cross-examining on others (the subject of the proposed split trial order).[79]

(i) Where the deferral of part of the plaintiffs' cross-examination may cause substantial disruption to the orderly conduct of the trial, or where it would likely be unfair to the defendant to require a piecemeal cross-examination, particularly where issues of credit are involved, a split trial order is not likely to be made.[80]

(j) The more serious the allegation the subject of a split trial application, the more likely the Court will favour such an order, particularly where exposure to criminal prosecution or civil penalty provisions are concerned.[81]

60 I propose to apply the observations of Tate JA in Dale, reproduced at paragraph 58 above, and to have regard to the matters set out in paragraph 59 when determining this application.

61 In the particular circumstances of this case, s 128 of the Evidence Act 2008 (Vic) ('the Evidence Act') requires consideration. That section relevantly provides:

(1) This section applies if a witness objects to giving particular evidence, or evidence on a particular matter, on the ground that the evidence may tend to prove that the witness -

(a) has committed an offence against or arising under an Australian law or a law of a foreign country; or

(b) is liable to a civil penalty.

(2) The court must determine whether or not there are reasonable grounds for the objection.

(3) Subject to subsection (4), if the court determines that there are reasonable grounds for the objection, the court is not to require the witness to give the evidence, and is to inform the witness -

(a) that the witness need not give the evidence unless required by the court to do so under subsection (4); and

(b) that the court will give a certificate under this section if -

(i) the witness willingly gives the evidence without being required to do so under subsection (4); or

(ii) the witness gives the evidence after being required to do so under subsection (4); and

(c) of the effect of such a certificate.

(6) The court is also to cause a witness to be given a certificate under this section if -

(a) the objection has been overruled; and

(b) after the evidence has been given, the court finds that there were reasonable grounds for the objection.

(7) In any proceeding in a Victorian court or before any person or body authorised by a law of this State, or by consent of parties, to hear, receive and examine evidence -

(a) evidence given by a person in respect of which a certificate under this section has been given; and

(b) evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence -

cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence.

(8) Subsection (7) has effect despite any challenge, review, quashing or calling into question on any ground of the decision to give, or the validity of, the certificate concerned.

62 In Harvey Spence v R,[82] the Court of Appeal discussed the purpose of a certificate given under s 128 of the Evidence Act and contrasted the provision of a certificate with an indemnity from prosecution: [83]

It is necessary to say something of the nature and effect of a certificate under s 128 of the Act. Such a certificate bears some similarity to - but has important differences from - an indemnity. An indemnity is a written promise by an authorised person (in this State, usually the Director of Public Prosecutions) to relieve a person of the penal consequences of a criminal act. Ordinarily, an indemnity is conditional on the indemnified person giving truthful evidence against others. The practical effect of a certificate given under s 128 is to give the witness both use and derivative use immunity in respect of evidence (except, of course, with respect to criminal proceedings relating to the falsity of the evidence). But, unlike an indemnity, a certificate under s 128 does not render the witness immune from prosecution with respect to the offence or offences about which the witness gives evidence.
The effect of a certificate under s 128 was discussed in Macarthur. In that case, the appellant contended that, in his trial for defrauding the Commonwealth, the trial judge erred in failing to inform the jury that the evidence of two prosecution witnesses 'was tainted in that they had received immunity from prosecution in respect of self-incrimination in other proceedings under s 128 of the Evidence Act'. Trial counsel had made an application to the trial judge for the judge to inform the jury that the relevant witnesses had given evidence 'under the protection of a s 128 certificate'. The trial judge refused. Grove J (with whom James and Barr JJ agreed) said of the effect of a certificate:

Section 128 of the Evidence Act provides an elaborate procedure in circumstances similar to where, prior to that statute, a witness was cautioned as to entitlement to claim privilege against answering on the ground of possible self-incrimination. Under the statutory provision, in short, if a court determines that a witness should answer a question of that quality, a certificate is given which, subject to exception not presently material, prevents that evidence, given under 'protection of the certificate', from being used in proceedings against that witness later.

The submission that these witnesses were given immunity from prosecution, by the certificate or otherwise, misunderstands what occurred. Both witnesses remained vulnerable to prosecution. No indemnity was received. Either could be prosecuted but the s 128 certificate did no more than prevent what was said on this occasion from being admissible against them in any such prosecution.

63 The David Brandi parties submitted that a person may be prejudiced in the conduct of their criminal defence even where evidence given in an earlier trial is given under cover of a certificate under s 128. In X7 v Australian Crime Commission,[84] Hayne and Bell JJ observed that where evidence has been given in prior proceedings that is relevant to a pending charge, the accusatorial process is fundamentally altered, because:

... the accused person would have to decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to what answers he or she had given ...[85]

64 Senior counsel for the David Brandi parties also referred to Kaye JA's reasons in DPP v Roberts (Ruling No 7)[86] as an illustration of where the remarks by Hayne and Bell in X7 can be applied in broader circumstances, particularly in the context of determination in relation to s 128 of the Evidence Act 2008 (Vic).[87]

65 The David Brandi parties relied upon written submissions dated 13 July 2022,supplemented by oral submissions. The written submissions include the following:

David has maintained his right to silence in the criminal proceeding and intends to continue to do so. While full details of the criminal proceeding are not yet available, having regard to the charge and to the subject matter and nature of the allegations pleaded by Jason in the civil proceeding, it appears likely that there will be a direct overlap between the criminal proceeding and this proceeding. David will be prejudiced if required to give evidence and be cross-examined in the civil proceeding in respect of the overlapping matters and other matters in respect of which David has claimed the privilege against self-incrimination and/or exposure to penalty.

...

Privilege against self-incrimination and exposure to penalty: The privilege against self- incrimination has been described as the right to refuse to answer any question, or to produce any document or thing, if to do so may tend to expose, or would expose, a person to conviction for a crime.[88] It is a privilege "deeply ingrained in the common law", which "reflects 'a cardinal principle' which lies at the heart of the administration of the criminal law in this country".[89] The privilege encompasses both the accusatorial principle (which provides that the onus of proof in criminal proceedings rests on the prosecution) and the companion rule (which provides that an accused person cannot be compelled 'to convict himself out of his own mouth').[90]

The related privilege against self-exposure to a penalty or "penalty privilege" has a close affinity with the privilege against self-incrimination, but it is distinct.[91]

In a civil action, it is necessary for a person claiming the privilege to establish as a threshold matter that there is a real and appreciable risk of criminal prosecution or tendency to subject them to a penalty.

As Lindgren J stated in Microsoft Corporation v CX Computer Pty Ltd:[92]

"The true scope of the privilege against self-incrimination must be understood. It cannot, without qualification, be identified simply as a privilege against being compelled to do something which may tend to show that the person has committed an offence. ... because the privilege operates to prevent a person from being compelled 'to answer any question, or to produce any document or thing, if to do so 'may tend to bring him into the peril and possibility of being convicted as a criminal'".

In ASIC v Mining Projects Group Ltd & Ors[93], Finkelstein J addressed the manner in which a civil proceeding should be conducted in circumstances where a person claiming the privilege against self-incrimination wishes to run a positive case, as follows:

"There is a potential problem if, as in this case, a defendant wishes to run a positive case. Ordinarily a positive case must be raised in the defence. Whether it must be raised in a defence in a civil action to recover a penalty is by no means clear. The view I favour is that there can be no such requirement as it would be inconsistent with the privilege. On the other hand, if a defendant who wishes to run a positive case is required to plead his case that can be accommodated while maintaining the privilege. What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff's case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent. That is the experience of those who prosecute criminal cases. The advocate who runs a civil penalty proceeding should be equally adept at dealing with the defendant and his witnesses without knowing in advance every word they are about to say."[94]

66 Referring to Protean Holdings, the David Brandi parties submitted:

... There is a rule of practice explained by Marks J in Protean (Holdings) Limited v American Home Assurance Co,[95] conveniently referred to as a 'Protean Holdings split', whereby the order in which the evidence is to be called at the trial is programmed such that the plaintiff is permitted a case in rebuttal to matters raised in a defendant's defence, and so the plaintiff is not required to lead evidence and the plaintiff's witnesses are not permitted to be cross- examined in relation to those matters until the defendant's case is closed.
In Clayton Utz (a Firm) v Dale the Victorian Court of Appeal said that ultimately whether a defendant should be required to lead its evidence in support of its defence first and before the plaintiff leads its evidence on those issues was to be determined by considerations of fairness. Tate JA (with whom Ashley and Ferguson JJA agreed) said:[96]

"In summary, the exercise of the discretion to oblige a defendant to lead its evidence in support of its defence first, before a plaintiff leads evidence on those issues, while guided by questions of whether the case for the plaintiff and the defendant are intertwined, is ultimately determined by matters of fairness. The question of who bears the onus of proof on any issue is important but not decisive. It is also important to consider the extent to which a plaintiff would otherwise be obliged to prove a negative."[97]

67 Senior counsel for the David Brandi parties also advanced oral submissions in support of the split trial application, relevantly:

(a) The proposed split trial is workable from a case management perspective as it is now a discrete topic.

(b) The proposed split trial will avoid serious unfairness to David in the context where there is a pending criminal charge about the Atida mortgage.

(c) The proposed split trial does not lead to any unfairness to the Jason Brandi parties. A split trial would not prevent the Jason Brandi parties from cross-examining David. Rather, it is a question of when, not if, David can be cross-examined.

(d) The option of having Ms Holt and Mr Skerrett give evidence first is not an adequate response to the unfairness to David. It does not give David the opportunity to know how the overall evidence lands to then determine whether the benefits of running a positive case outweigh the costs and risks of doing so.

(e) It is incorrect to say that David has waived his right to privilege against self-incrimination by bringing the Timeless Sunrise proceeding. The allegations that are the subject of the split trial application were brought by the Jason Brandi parties in their further amended counterclaim.

68 Senior counsel for the David Brandi parties referred to CC Containers Pty Ltd (ACN 128 976 803) v Desmond Ming Lee[98] and ASIC v Mining Projects Group Ltd & Ors[99] as support for the proposition that the trial judge has some discretion as to how the split trial should best work and in recognition of the approach in ASIC v Mining Projects Group Ltd & Ors in cases such as the Timeless Sunrise proceeding, which is not a penalty proceeding.[100]

69 The David Brandi parties also submitted that defamation cases such as Channel Seven and Roberts-Smith should be treated with caution as the insertion of a serious allegation in these cases does not have the same result as in Dale.[101]

70 In response to the submission that there are factual overlays upon which cross-examination will occur such that a split trial is unworkable (considered in further detail at paragraph 75, below), senior counsel for the David Brandi parties submitted:

(a) With regard to the backdating of ASIC documents, the backdating falls outside the subject matter of the split trial. However, cross-examination of David Brandi would not be permissible in the first part of the trial so far as the Jason Brandi parties seek to connect the backdating with an implied consciousness of guilt in respect of the Atida mortgage.[102]

(b) With regard to the sale of Newsom Street at an undervalue, the Jason Brandi parties are able to ask David any questions relating to the sale of a property with a second mortgage attached.[103] Senior counsel for the David Brandi parties accepted that if a split trial order were made, it would not be open to the Jason Brandi parties to cross-examine David as to the fact alleged that he organised the Atida mortgage.

(c) Regarding David's claim in equity based on the failure of the substratum of the relationship: the breakdown of the brothers' relationship in October 2018, which the Jason Brandi parties contend was David's fault and therefore prevents him from pursuing his claim in equity, is a separate issue to the breakdown of the 'Joint Enterprise'[104] to purchase Newsom Street, which the David Brandi parties plead (in the Third Further Amended Statement of Claim)[105] failed or terminated without attributable blame on the part of David. In this regard, there is no conceivable overlap.[106]

71 Childs Play relied on written submissions dated 13 July 2022 and upon oral submissions. Generally, Childs Play supported the position of the David Brandi parties.

72 As noted by Childs Play, ultimately, the decision whether or not to order a split trial will not have a substantial impact on Childs Play, given that, in any event, Childs Play would not be required to commence its evidence until after all other parties.[107] In the circumstances, it is unnecessary to say anything further about the position adopted by Childs Play on the application.

73 The Jason Brandi parties relied on written submissions dated 13 July 2022 together with oral submissions.

74 The written submissions from the Jason Brandi parties objected to the split trial order, including for the following reasons:

First, at least some factual / temporal overlap exists between:

(i) the subject matter with respect to which David Brandi principally seeks the split; namely, the "CEG Loan" and "Atida Loan": paragraphs 9A-9AA, Counterclaim filed on 22 February 2022 (Counterclaim); and

(ii) David Brandi's own case regarding Jason's delinquency in selling the "Newsom Street Property": paragraphs 23 to 33, Second Further Amended Statement of Claim filed on 20 December 2021 (Statement of Claim).

More specifically:

(a) In the principal claim in proceeding S ECI 2019 04430, David claims that, in June 2020, Jason sold Newsom Street at an undervalue: paragraph 30B(b), Statement of Claim. In doing so, David claims that, between September 2019 and October 2019, Jason conducted with the assistance of Savills an "EOI campaign" which was a "flawed sale process": paragraphs 25, 28 and 29, Statement of Claim. David seeks, among other things, equitable compensation for such matters: paragraph 32(ac), Statement of Claim.

(b) By way of counterclaim in the same proceeding, Jason essentially claims that, by reason of the second mortgage registered over Newsom Street under the unauthorised "Atida Loan," PDJ Crew lost the opportunity in July 2019 to sell Newsom Street to a third party for a price of $15 million: paragraph 12A, Counterclaim.

In this way, the David's own Atida Loan provides an alternative cause for, or is otherwise relevant to, the loss and damage David claims occurred via the sale process. Such an overlap militates against a split: Clayton Utz (A Firm) v Dale [2015] VSCA 186, [70]-[76] (Tate JA, Ashley and Ferguson JJA concurring) referring to, with approval, S, DJ v Channel Seven Adelaide Pty Ltd and Australian Broadcasting Corporation (2009) 260 LSJS 287 (Bleby J).

Secondly, understood in context, the situation does not require David to "prove a negative" in the relevant sense discussed by the authorities - that is, proving a negative without knowledge or appreciation of the basis of the case against him: Clayton Utz [2015] VSCA 186, [62]-[64], [68]-[69]. In light of the Counterclaim's allegations, the gist of what David must prove is very specific; namely, that he did not forge the documents used in connection with the CEG and Atida Loans: cf paragraphs 9K, 9K, 9Z and 9AA, Counterclaim.

Thirdly, David Brandi's credibility is very likely to be in issue. Importantly, he does not seek to have his claims put off, even though those claims might traverse the forged CEG and Atida Loans (see above). Rather, David seeks orders immunising his credibility from attack on this front. This is forensically unfair. Even if the Court is disposed to allow the split, it should not make Order 1(a)(i)(C) sought in the Annexure to the plaintiff's submissions. Rather, should David's cross-examination extend to such matters, he can be adequately protected by a certificate granted pursuant to s 128 of the Evidence Act 2010 (Vic). He cannot both choose to run his case and be protected from attack on matters germane thereto.[108]

75 In opposition to any split trial order, leading counsel for the Jason Brandi parties advanced several submissions, including:

(a) A key consideration that underpins a split trial order as held in Protean Holdings, and in cases thereafter, is the need to ensure the respondent to allegations is not required to go into evidence without notice of the case to be met. That issue can be addressed in this case by Mr Skerrett (the solicitor who will give evidence that the signature on the Atida mortgage and associated documents is not his signature; and Ms Holt; the handwriting expert who will give evidence that Mr Skerrett's signature and that of Jason on the Atida mortgage and associated documents are a forgery; giving evidence as the first two witnesses in the trial.

(b) A split trial order will not be appropriate where the issues in the proceeding are intertwined and, as a result, the making of such an order would operate unfairly to the party against whom such an order is sought.

(c) In this case, the making of such an order would operate unfairly to the Jason Brandi parties:

(i) it would materially impact the Jason Brandi parties' ability to cross-examine David, together with the other David Brandi parties in the Timeless proceeding and also his wife Tina, the second plaintiff in the Zigaroo proceeding;

(ii) there is overlap on the pleadings;

(iii) there are factual overlays and a chronological coincidence of events upon which cross-examination will occur; and

(iv) the proposal to call Mr Skerrett and Ms Holt as the first witnesses in the trial, together with the fact that Jason Brandi's witness statements have been filed and served, means that the David Brandi parties will not be required to anticipate and/or prove a negative.

76 The question requiring resolution on this application is: how are the interests of justice best served? That question falls to be determined having regard to the overarching obligation provided for in s 7(1) of the CPA. That section provides:

(1) The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute.

77 In this case, I am in no doubt that the interests of justice demand that the application for a split trial be refused.

78 The first reason concerns the fact and the degree to which the issues the subject of the application are intertwined with the other issues for trial.

79 The issues concerning the alleged sale of Newsom Street at the wrong time by Jason and the taking out of the CEG and Atida mortgages without Jason's knowledge and in circumstances where he alleges his signature, and that of the solicitor, Mr Skerrett were forged, are so intertwined that a trial relating to both issues which is fair to both parties cannot occur if the mortgage issues at paragraph 9A - 12AD of the FAC are split.

80 Newsom Street was initially contracted to be purchased by PDJ Crew pursuant to a contract of sale dated 26 November 2004. Soil contamination issues were discovered. Those issues resulted in the initial contract of sale being renegotiated and a new contract being entered into in its place on 2 December 2007. Thereafter steps were taken to secure advantageous development approvals for the site which include the purchase of an adjacent parcel of land purchased by PDJ Crew on 19 September 2013, which resulted in a total development site in excess of 5,700m².

81 On 11 November 2015, PDJ Crew made an application for a planning permit. In January 2018, an offer was made for the purchase of the property in the sum of $15 million, subject to obtaining planning approval to construct 41 townhouses on the site. When opening their case, the David Brandi parties placed considerable emphasis upon this offer in support of their claim that Jason should not have sold Newsom Street when he did, for the price he did (being $10.5 million) in June 2020. At that time it appears the COVID‑19 pandemic may have impacted the property price.

82 In his first witness statement, David stated that on 30 October 2018 he suggested in an email to Jason that it might be worthwhile 'testing out the price' of Newsom Street but Jason did not agree to do so.[109]

83 On 29 November 2018 planning permission was obtained to construct 38 townhouses on Newsom Street.[110] It is safe to proceed on the basis that, with the certainty of planning permission having been obtained for the site, it was readily marketable as a development opportunity.

84 The obtaining of planning permission occurred shortly after the falling out between David and Jason. It also occurred shortly after the withdrawal of the caveat concerning the CEG mortgage and the registration of the allegedly forged Atida mortgage on 4 October 2018, both of which events were, according to the Jason Brandi parties, events that occurred without their knowledge or consent. When David, according to his witness statement suggested 'testing out the price' of Newsom Street, on 30 October 2018 this was less than one month after the date of the Atida mortgage.

85 In his first witness statement, Jason says that he first found out about the Atida mortgage on 6 January 2019. The Atida mortgage was discharged on 12 September 2019. On 23 September 2019, Jason and PDJ Crew commenced a proceeding in this Court against Atida in relation to the Atida mortgage. By the FAC, the Jason Brandi parties claim damages against David in relation to the CEG and Atida mortgages, seeking to recover approximately $173,000 in legal costs incurred in seeking to have the Atida mortgage removed. On 26 September 2019, the David Brandi parties commenced the Timeless Sunrise proceeding.

86 The case which the David Brandi parties bring against Jason concerning the sale of Newsom Street covers the time period from October 2018 to April 2022; at the end of which time, the David Brandi parties contend, Newsom Street should have been sold. The David Brandi parties rely upon expert evidence from Ms Kenny to say that as at April 2022 the market value of Newsom Street was $11.7 million. The loss allegedly sustained due to breach by PDJ Crew and Jason is approximately $1.2 million. It is a key aspect of Jason's defence to the claim against him concerning the sale of Newsom Street, and its timing, that he was not prepared to sell Newsom Street with the Atida mortgage in place and first moved to have that mortgage removed. The Atida mortgage secured debt of $3.97 million.[111] In circumstances where, on Jason's case, he knew nothing about the Atida mortgage until January 2019, and given the amount of the debt secured, there appears to be some force to that argument.

87 In addition to the intertwined issues discussed above, there is the positive allegation by the David Brandi parties that the 'Joint Enterprise' concerning Newsom Street failed or terminated without attributable blame on the part of David. Testing that proposition in cross‑examination is highly likely to include issues concerning the Atida mortgage, unless that issue is deferred as a result of a split trial order. Given the positive allegation by David, it is not appropriate to shut out cross‑examination on the Atida mortgage when responding to that allegation.

88 The second reason to refuse the application concerns the need to balance the fairness in the conduct of the trial to all parties.

89 The David Brandi parties' claim concerning the timing of the sale of Newsom Street requires an investigation of the events that took place and the reasons the property was not sold prior to April 2020. That is particularly so in light of the $15 million conditional offer in 2018. The allegedly forged signatures on the Atida mortgage are central to those issues. The David Brandi parties have elected to make and pursue that claim in the Timeless Sunrise proceeding. David Brandi wants to proceed with that claim. He has not sought a stay of that claim pending the trial of his criminal proceeding. It would be unfair in the extreme to Jason to require him to meet that claim without the ability to cross-examine on any of the issues relating to the CEG mortgage, the Atida mortgage or the associated documents referred to in paragraphs 9B and 9P of the FAC, which the Jason Brandi parties allege to have been forged. If the split trial order were made, as contended for by senior counsel on behalf of the David Brandi parties, it would not even be open to Jason to cross-examine David about the fact that both mortgages were obtained and lodged without his consent.

90 Fairness to David, in relation to the allegedly forged mortgage (which is the subject of a criminal charge) dictates that it is appropriate that Mr Skerrett, the solicitor whose signature was allegedly forged on the Atida mortgage, the CEG mortgage and on solicitors certificates referred to in the pleadings, is called as the first witness in the trial. Further, fairness dictates that Ms Holt, the handwriting expert, is called as the next witness in the trial (that is, before David is required to give evidence). To approach the evidence of the witnesses in that order means that David will know the case he has to meet on critical issues before giving evidence. Once David does give evidence, if he elects to do so, it will be a matter for him whether he elects to give evidence-in-chief concerning the Atida and CEG mortgages. He can expect to be cross-examined about the fact that those mortgages were obtained without the consent of the sole director of PDJ Crew - Jason - and about the alleged forgery by him of the signatures of Mr Skerrett and Jason. At that point, it will be open to him to claim privilege against self-incrimination, and issues concerning a certificate pursuant to s 128 of the Evidence Act may arise for determination.

91 The third reason to refuse the application involves trial management and, in particular, the timely and efficient conduct of the trial.

92 Issues relating to the privilege against self-incrimination and s 128 certificates will likely arise in the context of the CEG and Atida mortgages. Even if a split trial order is made, and David elects to give evidence, it is almost inevitable that those same issues would arise. As the DFAC reveals, privilege against self-incrimination is not only raised in response to allegations concerning the Atida and CEG mortgages. The same plea made in response to those allegations appears on a number of occasions in the DFAC. It also appears in relation to allegations of dishonesty concerning the Leaning Back loan where the Jason Brandi parties allege breach of fiduciary duty. It was appropriately conceded in argument by senior counsel appearing for the David Brandi parties that it could reasonably be anticipated that s 128 issues and privilege claims would arise in relation to both of those matters which would need to be determined.[112] It is much more efficient to be able to deal with all such applications and to rule on them as required at the same time.

93 The fourth reason concerns the criminal charge. Accepting that the forgery criminal charge, and David's right to silence, is a very serious matter to be weighed in the balance, although by no means perfect, and noting the observations of Hayne and Bell JJ in X7, the prospective ability of David to claim privilege against self-incrimination and to obtain a certificate pursuant to s 128 of the Evidence Act goes some distance to ameliorating the prejudice that would otherwise flow from refusing the application.[113]

94 The fifth reason concerns the onus of proof. David bears the onus in relation to the complaint concerning the sale of Newsom Street. The Jason Brandi parties bear the onus in relation to the approximate $173,000 in damages alleged to be sustained by reason of the Atida mortgage. As evidence by Mr Skerrett and Ms Holt will be given first, David will not need to anticipate the case he has to meet. Nor will he be required to prove a negative. The concerns in that regard expressed by Marks J in Protean Holdings, and adopted by the Court of Appeal in Dale are addressed by managing the order of witnesses and requiring the relevant expert evidence to be given first.

95 Finally, all four proceedings involve serious credit issues. There will be cross-examination of David about the alleged forgery of numerous documents and concerning the alleged backdating of documents including the 2014 unit transfers relating to the PDJ Crew Unit Trust and matters concerning the 2072 Inverloch-Venus Bay Road, Tarwin Lower, venture. There are very serious allegations made concerning the Leaning Back loan and the Westpac loan application. Notwithstanding that the Atida mortgage is the only matter to be the subject of a pending criminal charge, I consider it artificial and not conducive to the fair conduct of the trial to carve out that single issue from a whole series of inter-related issues and to provide for a split trial of the CEG and Atida mortgage issue.

96 For the reasons set out above, the application is refused.

CHILDS PLAY INTERNATIONAL PTY LTD (ACN 140 794 547)

[1] Timeless Sunrise Pty Ltd v BigJ Enterprises Pty Ltd (No 2) (Unreported, Supreme Court of Victoria, Delany J, 22 July 2022), [32].

[2] Plaintiffs in Timeless Sunrise proceeding, Proposed Form of Order dated 17 August 2022.

[3] First to Third Defendants in Timeless Sunrise proceeding, Further Amended Counterclaim dated 10 February 2022 ('FAC'), [9O]-[12].

[6] So much is accepted by counsel for the Jason Brandi parties; see Transcript of Proceedings, Timeless Sunrise Pty Ltd (ACN 126 299 634) as trustee for Davina Family Trusts & Ors v BigJ Enterprises Pty Ltd (ACN 084 199 084) as trustee for Jason Brandi Family Trust & Ors (Supreme Court of Victoria, Delany J, 15-22 August 2022) ('Transcript'), 393.

[11] Ibid, [12I]. See also Transcript, 195-196.

[14] Plaintiffs in Timeless Sunrise proceeding, Third Further Amended Statement of Claim dated 18 July 2022 (FASC), [35].

[15] FAD, [21(g)(ii)], [23], [42(b)], [43(a)], [43(c)], [44]-[45] and [47].

[16] For convenience, unless otherwise specified, capitalised terms in this paragraph have the meanings ascribed to them in the pleadings.

[40] First Defendant in Timeless Sunrise proceeding, Defence to Further Amened Counterclaim dated 25 March 2022 ('DFAC'), [9A].

[45] Ibid, [12A], referring also to [10].

[47] Second Defendant in the Timeless Sunrise proceeding, Defence to Counterclaim dated 10 May 2022, [12AA], [12AC].

[48] Plaintiffs in Timeless Sunrise proceeding, Affidavit of James Edgar sworn 15 June 2022, [10].

[50] Plaintiffs in Timeless Sunrise proceeding, First Witness Statement of David Brandi dated 20 August 2021, [103].

[53] Plaintiffs in Timeless Sunrise proceeding, Third Further Amended Statement of Claim, 18 July 2022, [30A].

[55] Plaintiff in Timeless Sunrise proceeding, Outline of Opening Submissions dated 8 August 2022, [53].

[57] Plaintiffs in Timeless Sunrise proceeding, Third Further Amended Statement of Claim dated 18 July 2022, [2(c)].

[63] [2015] VSCA 186, (2015) 47 VR 48 (Ashley, Tate and Ferguson JJA) ('Dale').

[66] [2008] VSC 548 (J Forrest J) ('Triple M').

[67] [1989] SASC 1951; (1989) 53 SASR 9 (Cox, Duggan and Mullighan JJ).

[68] [2009] SASC 6 (Bleby J) ('Channel Seven').

[71] [2021] FCA 549 (Besanko J) ('Roberts-Smith').

[72] Clayton Utz (a firm) v Dale [2015] VSCA 186; (2015) 47 VR 48, [58] (Tate JA).

[73] S, DJ v Channel Seven Adelaide Pty Ltd [2009] SASC 6, [26] (Bleby J).

[74] Clayton Utz (a firm) v Dale [2015] VSCA 186; (2015) 47 VR 48, [62] (Tate JA).

[75] Protean (Holdings) Ltd v American Home Assurance Co [1985] VicRp 18; [1985] VR 187, 191.

[76] French v Triple M Melbourne Pty Ltd (Ruling No 2) [2008] VSC 548, [13] (J Forrest J).

[78] Clayton Utz (a firm) v Dale [2015] VSCA 186; (2015) 47 VR 48, [64] (Tate JA).

[79] S, DJ v Channel Seven Adelaide Pty Ltd [2009] SASC 6, [31] (Bleby J).

[81] Roberts-Smith v Fairfax Media Publications Pty Limited (No 13) [2021] FCA 549, [48], [52]-[53], [56] (Besanko J).

[82] [2016] VSCA 113 (Redlich, Priest and Ferguson JJA).

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