Procter v Kalivis

REASONS FOR JUDGMENT 1 This is a proceeding between Eva Lynne Procter and Brenda Maureen Procter, applicants, and Evangelo Kalivis, ACN 088 370 966 Pty Ltd, Patricia Anne Dabrowski, Timothy John Dabrowski and Berri Developments Pty Ltd, respondents. The proceeding was commenced on 19 December 2008. Before they had filed defences, the respondents brought an application seeking an order that the Statement of Claim, or, in the alternative, certain paragraphs in it be struck out, or, in the further alternative, that the applicants provide particulars of a number of allegations in the Statement of Claim. The applicants brought an application seeking orders that the respondents provide discovery before particulars. On 12 August 2009, I made the following orders, relevantly: "1. On or before Wednesday 2 September 2009, the Respondents are to make discovery in terms of paragraph 1 of the Applicants' Amended Notice of Motion dated 1 April 2009. 2. The Applicants are granted leave to file an Amended Statement of Claim on or before Wednesday 30 September 2009. 3. The Respondents are to file a Defence to the Applicants' Amended Statement of Claim, together with any Cross Claim, on or before Wednesday 28 October 2009." 2 My reasons for making those orders are set out in Procter v Kalivis [2009] FCA 795. Those reasons for judgment also contain a description of the various allegations made by the applicants against the respondents (see [6]-[35]). 3 As a result of the first order, the respondents were required to make discovery in the following terms: "1. All documents in the possession, power or control of the Respondents recording or evidencing: 1.1 instructions from each or any of the Respondents to the relevant financial institutions regarding any withdrawal of funds; 1.2 the date on which the funds were withdrawn; 1.3 the amount of funds withdrawn; 1.4 the manner in which the funds were withdrawn (ie. by cash, cheque, telegraphic transfer and/or any other method); and 1.5 how the funds withdrawn were applied and for what purpose(s), in relation to the following Bank facilities: 1.6 Westpac Bank account number 43-4102 held in the name of Miss Eve Lynne Procter (defined as 'Lynne Procter's Westpac loan facility' in sub-paragraph 41.2.1 of the Statement of Claim); 1.7 Westpac Bank account number 43-3353 held in the name of Ms Brenda Maureen Procter (defined as 'Maureen Procter's Westpac loan facility' in sub-paragraph 41.2.2 of the Statement of Claim; 1.8 Bank SA account number 101966740 held in the names of Patricia A Dabrowski, Timothy J Dabrowski, Eve L Procter and Brenda M Procter (defined as 'the Bank SA Primary Facility' in sub-paragraph 60.1 of the Statement of Claim). 1.9 Bank SA account number 102147340 held in the names of Patricia A Dabrowski, Timothy J Dabrowski, Eve L Procter and Brenda M Procter (defined as 'the Bank SA Secondary Facility' in sub-paragraph 74.1 of the Statement of Claim); 1.10 Challenger Bank 'Loan Code' 5835 held in the names of Ms Eve Lynne Procter and Ms Patricia Anne Dabrowski (defined as the 'Challenger Bank Loan Facility' in paragraph 105 of the Statement of Claim); and 1.11 All bank facilities established by the First Respondent, Evenagelo [sic] Kalivis, on behalf of the investors in the Middleton Shores Project (as defined in the Statement of Claim) including, but not limited to, the Bank SA loan facility(ies) established by the First Respondent at the commencement of the Middleton Shores Project, along with the Adelaide Bank loan facility(ies) established by the First Respondent in or about July 2005. I will refer to this as the existing discovery order. 4 The respondents filed and served a List of Documents on 2 September 2009. That list of documents was replaced by an Amended List of Documents ("List of Documents") filed and served on 14 October 2009. In that List of Documents, the first, third and fourth respondents each depose to the accuracy of the List of Documents, and the first respondent also does that on behalf of the second respondent. The first respondent is the sole director of the second respondent. 5 On 28 October 2009, the respondents filed a defence and on the same day, they filed a cross-claim. 6 On 12 November 2009, the applicants issued a notice of motion in which they sought the following orders, relevantly: "1. Pursuant to Order 14 rule 9 and Order 15 rule 2 of the Federal Court Rules, the first, third and fourth respondents attend the Court for cross-examination on their respective affidavits sworn on 14 October 2009. 2. The respondents make further and better discovery in terms of paragraph 1 of the applicants' Amended Notice of Motion dated 1 April 2009." 7 At the hearing of the applicants' notice of motion, the applicants tendered three affidavits of their solicitor, Mr Stephen Dickinson, and those affidavits were sworn by Mr Dickinson on 12 November, 20 November and 4 December 2009 respectively. The respondents objected to certain paragraphs in Mr Dickinson's affidavit sworn on 12 November and his affidavit sworn on 20 November 2009. The grounds of objection were primarily relevance and impermissible conclusion or submission. As the submissions proceeded, the objections became of little if any significance. I am able to decide the applicants' notice of motion without relying on the paragraphs to which objection was taken. 8 The respondents relied on the following affidavits: 1. Affidavit of David Ian Crase, sworn on 7 December 2009; 2. Affidavit of Denis Fitzpatrick, sworn on 8 December 2009; 3. Affidavit of Angelo Kalivis, sworn on 8 December 2009. 9 The applicants' application was refined as the submissions proceeded. The applicants accepted that, at this stage, they could not press for an order for cross-examination of the first, third and fourth respondents. That concession was correctly made and I refer generally to my discussion of the circumstances in which cross-examination may be ordered in Procter v Kalivis [2009] FCA 1518 at [35]-[41]. 10 In terms of their application for further and better discovery, the applicants initially sought an order that there be further and better discovery of 13 categories of documents set out in a schedule dated 4 December 2009. By the conclusion of submissions, they sought orders to the following effect: 1. Paragraph 1 of the existing discovery order be amended to add after "Respondents" and before "recording or evidencing" the words "including email transmissions, tax invoices or other requests for payment". 2. Paragraph 1.11 of the existing discovery order be amended so that it reads as follows: "The following bank facilities established, arranged, procured and/or controlled by the first respondent, Evangelo Kalivis, on behalf of the investors in the Middleton Shores Project (as defined in the Statement of Claim): 1.11.1 the Bank SA loan facility (IES) established, arranged and/or procured by the first respondent at the commencement of the Middleton Shores Project; and 1.11.2 the Adelaide Bank loan facility (IES) established, arranged and/or procured by the first respondent in or about July 2005;" 3. A paragraph be added to the existing discovery order as follows: "2. To the extent that funds were withdrawn from each or any of the bank facilities listed in paragraphs 1.6-1.11 (inclusive) above and subsequently transferred or deposited into each or any of the following bank accounts - 2.1 Bank SA account No 102295040 in the names of Ms Patricia A Dabrowski and Mr Timothy J Dabrowski; 2.2 ANZ Bank Account No 3504-40444 in the name of ACN 088 370 996 Pty Ltd; 2.3 Westpac Bank Account No 14-2239 in the name of ACN 088 370 996 Pty Ltd; all documents in the possession, power or control of the respondents (including tax invoices and other requests for payment) recording or evidencing how any such funds withdrawn or transferred were applied and for what purpose(s)."