On 1 October 2014 as Duty Judge I made orders ex parte on the application of the plaintiffs. The orders required the defendants to permit an independent solicitor appointed for the purpose of obtaining access to a computer owned or operated by one or more of the defendants and to permit a computer expert to make copies of specifically identified relevant material. The first defendant is Mr Paul Fordyce, solicitor, and the second defendant is PMF Legal, an incorporated legal practice. The other defendants were persons connected with the practice. I shall refer, in the balance of these reasons, to Mr Fordyce as including his incorporated legal practice as nothing turns on that distinction. My reasons for the order, given ex tempore, are set out in Ho v Fordyce (ex parte) [2014] NSWSC 1404.
The background to the dispute is as follows:
1. Mr Fordyce acted for Mr Ho, Rhodium NSW Pty Ltd ("Rhodium") and The Trading House Pty Ltd ("Trading House") in various proceedings. Rhodium and Trading House are companies controlled by Mr Ho. There is no doubt that Mr Fordyce did carry out extensive work for these clients including in a matter for Mr Ho involving the Guardianship Tribunal and a matter relating to a restaurant known as BBQ King. There is no dispute that Mr Fordyce also acted in some earlier litigation for Mr Ho or his companies, one matter involving another restaurant known as Golden Century, for which work Mr Fordyce was paid. It appears common ground that Mr Ho and/or Rhodium or Trading House have paid money to Mr Fordyce on account of the costs incurred in the more recent litigation although there is a dispute about how much exactly has been paid.
2. Mr Fordyce has issued invoices to Mr Ho, Rhodium and Trading House and has sought payment of the outstanding amounts.
3. Mr Ho, Rhodium and Trading House have not paid all of the amounts which Mr Fordyce claims are due.
4. Mr Ho lodged two Costs Applications in June 2014 and has objected to the bills of costs given to him by Mr Fordyce see Exhibit MJW to Mr Mark Webeck's affidavit of 29 September 2014 (in Assessment Number 2014/180275 and in Assessment Number 180287).
5. Mr Fordyce responded on 16 July 2014 to each of the Cost Assessment Applications with a Response to Application by Client for Assessment of Costs.
6. In the two Costs Applications Mr Ho asserted:
"There is no costs agreement between myself and the law practice".
1. The response of Mr Fordyce in 2014/180275 (see p 128 of the exhibit to Mr Webeck's affidavit of 29 September 2014) contained the following:
"Enclosed are:
(i) Engagement letter dated 4 September 2013 in matter No. HO90/130027 which was forwarded to the costs applicant on that day;
(ii) Engagement letter dated 28 January 2014 in matter No. HO90/140009 which was forwarded to the costs applicant on that day"
a similar response was made in 2014/180287 (see pp 257-8 of Mr Webeck's exhibit).
1. What were stated to be the enclosures referred to in (7) were included in the Response.
2. There are other issues arising out of the Applications and Responses including allegations of over-servicing, duplication and overcharging and related matters which allegations are denied by Mr Fordyce and which are not presently for determination.
On 1 October 2014 Mr Ho, Rhodium and Trading House commenced proceedings by Summons seeking declarations that the six costs agreements relied on by Mr Fordyce were of no force and effect and should be set aside, that in the Costs Applications a declaration should be made that the assessments proceed on "terms that there is no costs agreement between" Mr Fordyce and the plaintiffs, and an order that Mr Fordyce is required to refund any overpayment made as a result of the declarations sought being made.
At the heart of the Summons is the allegation that, contrary to Mr Fordyce's assertion in the Costs Responses, no costs agreements or "engagement letters" as Mr Fordyce describes them, were ever delivered by Mr Fordyce to the plaintiffs.
In support of the orders sought on 1 October 2014 the following affidavits were read: affidavit of Mr Ho of 1 October 2014, affidavit of Mr Wilson Wong of 1 October 2014 and affidavit of Mr Mark Webeck of 29 September 2014.
The plaintiffs sought the orders which were granted on 1 October on the basis that they believed that access to Mr Fordyce's computer would demonstrate that the letters said to evidence the cost agreements which Mr Fordyce had attached to his Costs Responses were not created on or close to the dates which they bear and that that evidence would be very supportive of their contention that they had never received the costs agreements or engagement letters which Mr Fordyce says he sent to Mr Ho on or about the dates which the letters bear.
As I explained in my reasons of 1 October it seemed to me that the results of the investigation could be very helpful to the plaintiff's case and that to obtain an order for discovery in the usual manner would run the risk that the contents of the computer could be wiped. I explained that the application had some similarity to the application in Markus v Provincial Insurance Co Ltd (1983) 25 NSWCCR 1 and also Halpin v Lumley General Insurance Limited (2009) 78 NSWLR 265 and in my reasons I also referred to Australia's Residential Builder Pty Ltd v Wiederstein (2014) VSC 430, to which my attention had that day been drawn as a case in which orders were made after commencement of proceedings of discovery. I granted the orders sought by the plaintiffs, making the matter returnable before the Duty Judge on 15 October 2014. The similarity of Markus and Halpin was not in the circumstances but rather the desire of a party in the course of proceedings not to alert the other party to evidence that it had or wanted to obtain without it being compromised.
On 15 October 2014 the matter was listed before Pembroke J and orders were made by consent in relation to further steps relating to the material to be obtained from Mr Fordyce's computer. On 20 October 2014 Mr Fordyce swore an affidavit bearing that date in compliance with the orders made on 15 October 2014. The affidavit was provided to the independent solicitor but not the plaintiffs' solicitor under the hearing on 17 December 2014: see T48.
On 12 November 2014 the matter was listed before Stevenson J and on that occasion Mr Fordyce foreshadowed a motion to set aside the orders made on 1 October.
On 19 November 2014 the matter was listed before Stevenson J and the proceedings against the fourth defendant were dismissed.
On 28 November 2014 the matter was listed before Robb J and orders were made granting leave to Mr Fordyce to file a Further Amended Notice of Motion and in respect of the service of evidence supporting Mr Fordyce's Notice of Motion.
On 12 December 2014 the matter was listed before Bergin CJ in Eq and her Honour, after a lengthy directions hearing with Mr Fordyce appearing for himself in the matter and Mr Kelly of counsel appearing for Mr Ho and his companies, listed the matter before me on 15 December. Her Honour noted that Mr Ho was willing to provide security of $30,000 and orders were made for that to occur although subsequently by agreement the money was placed into the trust account of the plaintiff's solicitor (see T.21- 44). It should be noted that Mr Kelly has been instructed by a different firm to that which had instructed counsel on 1 October because of Mr Fordyce's wish to join both the barrister, Mr Hyde, who had acted for Mr Ho and his companies on 1 October and the solicitor who had instructed him, Mr Bryan Belling of K&L Gates. Mr Hyde and Mr Belling were later excused from attending the hearing of the present Notice of Motion.
Unfortunately due to the terrible events in Martin Place on Monday 15 December 2014 and their aftermath the Court could not sit on the appointed date and the matter was re-listed for the afternoon of Wednesday 17 December. A regime for further submissions was put in place at the end of that day and further submissions have been provided by both Mr Kelly and Mr Fordyce (Mr Kelly's received on 13 February 2015 and Mr Fordyce's on 2 March 2015). In accordance with orders made on 3 March 2015 I received further submissions from Mr Kelly on 18 March 2015 and Mr Fordyce's submissions in response on 1 April 2015. I should note that Mr Fordyce attached to his submissions of 2 March 2015 material in regard to which no leave was given to adduce and I have paid no regard to that material. I shall refer to Mr Fordyce's submissions handed up in Court on 17 December as "PFS", Mr Kelly's submissions in response as "HS", Mr Fordyce's submissions in reply "PFSR", Mr Kelly's submissions dated 18 March 2015 as "HSR" (these also bear the name and signature of Mr T.G.R Parker SC) and Mr Fordyce's further submissions dated and received on 1 April 2015 as "PF Supp". Subsequently I received yet further submissions from Mr Fordyce dated 7 April 2015 which Mr Fordyce explained as having been accidentally omitted from the PF Supp.
What is before the Court now is one matter only, namely whether in accordance with the relief sought in paragraphs 1, 2 and 3 of Mr Fordyce's Further Amended Notice of Motion filed on 24 November 2014 orders made by me on 1 October 2014 should be set aside on the basis of an alleged failure of the plaintiffs and their legal advisors to apprise the Court of matters said by Mr Fordyce to be critical to the granting of the orders. The matters asserted are:
1. That the Court's attention was not brought to the need, if an Anton Piller order was to be made, for a strong prima facie case to be established, and that no strong prima facie case was established.
2. The fact that no residential address for Mr Ho was disclosed in the summons or his affidavit in support.
3. The fact that the independent solicitor appointed to oversee the access to and copying of Mr Fordyce's computer (Mr Seamus Burke of Laycock Burke Castaldi Lawyers) had been, before 1 October, a partner of Mr Bellings and that in the following exchange:
"HIS HONOUR: Is there any reason for using a Newcastle solicitor as the independent solicitor?
MR HYDE: only that he has experience in these sorts of matters, particular experience"
(see T 8.2 - 7 of 1 October 2014) no mention was made of that fact.
That the Court's attention was not drawn to the fact that Mr Fordyce emailed Mr Wilson Wong and Ms Claudia Leung on 18 September 2014 advising that:
"Need copy of executed costs agreement with Mr Ho"
Mr Fordyce contends that:
1. since the email was sent to Mr Wong, Mr Wong was on notice of the existence of a costs agreement in September 2013 when he swore his affidavit of 1 October 2014;
2. the existence of a costs agreement at that time was entirely inconsistent with the contention of the plaintiffs that Mr Fordyce had only created the document in 2014 (and hence inferentially had not sent any costs agreement or letter to the plaintiffs at the time he says he did); and
3. the email should have been disclosed to the Court.
1. That the plaintiffs failed to disclose to the Court as required by practice Note SC Gen 13 para 20 that he did not have the ability to meet the undertaking as to damages from his assets within Australia. Mr Fordyce asserts that Mr Ho has no assets in Australia.
2. That the plaintiffs did not reveal that the termination of the retainer did not come about because Mr Fordyce's fees were claimed to be excessive.
3. That Rhodium and Trading House have no assets and had both been deregistered until Mr Fordyce took steps to have them restored to the register as part of the litigation he conducted for Mr Ho.
Some of the factual matters in dispute can only be understood with knowledge of a number of matters of background:
1. Mr Ho is of advanced years. He has lived in Australia for many years having come here from Hong Kong. He travels to Singapore from time to time where he provides consultancy services to restaurants.
2. Some time after Mr Ho and or his companies had retained Mr Fordyce in respect of the Golden Century litigation, Mr Ho retained Mr Fordyce in connection with the appointment, by the Guardianship Tribunal, of members of Mr Ho's family to act as Guardian for Mr Ho. Mr Ho wished to contest the orders of the Tribunal and with Mr Fordyce's assistance the orders were set aside or not continued.
3. Mr Ho, Rhodium and Trading House retained Mr Fordyce to act for them in connection with proceedings known as the BBQ King litigation. That litigation is ongoing and is being conducted now on their behalf by the solicitors currently acting for Mr Ho in these proceedings.
4. Mr Wilson Wong is Mr Ho's accountant and has a very close association with Mr Ho.
5. Ms Claudia Leung is an employee of Mr Wong's accountancy firm Bennelong Partners and had been given a power of attorney by Mr Ho (see Tab 24 Exhibit PMF1).
6. Mr Ho directed Mr Fordyce to address all correspondence to him at a P.O box in Chatswood ("the P.O Box"). Mr Fordyce complied with that request.
7. Mr Fordyce did meet with Mr Ho on a number of occasions but he had far more extensive contact with Mr Wong (and Ms Leung).
8. As part of the regime established by the orders made on the 1 October, Mr Burke was appointed as the independent solicitor. A firm of independent forensic computer examiners, Klein & Co, were retained, and authority given to the individuals associated with the firm, to obtain access to Mr Fordyce's computers and to prepare a report. Mr Ardavan Ghorbani of Klein & Co in his affidavit explains the process leading to the preparation of the report including the assistance provided by Mr Bill Morgan, an information technology consultant assisting Mr Fordyce.
9. Prior to 17 December Klein & Co had obtained access to all of the computer records of Mr Fordyce to which they were permitted to access and had created images of those records. They also had been provided with a copy of Mr Fordyce's affidavit of 20 October 2014 (to which I referred in [8] above). There was one file, a file relating to the costs agreement dated 27 April 2012 which they were not able to locate on the two files which they had searched and they pointed out that they had, in accordance with the instructions they had been given, not searched the other exhibits which they had obtained. Mr Ghorbani does say that the report which he provided was based on a very limited initial forensic analysis of the data source held. Whilst they had not examined all of the records they had been able to prepare a report based on their initial analysis. That report is Exhibit 2 and it includes an Appendix 1.
10. At the hearing on 17 December 2014 I was advised of the existence of the report (see T38) and that although a copy of the report had been provided to Mr Fordyce, no copy had been provided to the plaintiff's solicitors or counsel. Mr Kelly sought production of the report in full to the Court which production was opposed by Mr Fordyce. Having read the report I ordered that a copy of it be made available to Mr Kelly and his instructing solicitor.
11. I subsequently ordered on 20 December 2014 at a directions hearing that Mr Kelly and his solicitor were permitted to summarise the document for Mr Ho, Mr Wong and Ms Leung and to permit those three persons to view the report but ordered that copies of the report were not to be made available to anyone but Mr Kelly and his instructing solicitor.
Mr Fordyce's opposition to the production of the draft Klein report was linked to his contention that because the October orders were improperly obtained the plaintiffs should not be able to have access to the "fruits" of their conduct. Mr Kelly contended that the report should be viewed as part of the process of determining whether or not the orders made on 1 October should be set aside.
My attention was drawn to the decision of Brereton J in Brags Electrics Pty Ltd t/as Inscope Building Technologies v Gregory [2010] NSWSC 1205 and Gleeson J in Geneva Laboratories Ltd v Nguyen [2014] FCA 1270 (25 November 2014). Having regard to the approach taken in [12]- [13] and [17] in Brags and those decisions at [49]- [52] of Geneva I formed the view that I should receive the Klein report which is contained in a letter of 24 October 2014 and to which I shall refer as "the Klein report".
The Klein report, and particularly its appendix, provides information that in my view is both relevant to the issue of recent creation and to the question of whether the orders made on 1 October should be set aside as I shall explain below.
In his submissions Mr Fordyce makes reference to various aspects of the evidence contained in his affidavit of 14 November 2014 ("PF14") and 18 November 2014 ("PF18") (in addition to drawing attention to material found in Mr Webeck's exhibit to his affidavit of 29 September 2014). I summarise the items of evidence in Mr Fordyce's own affidavit to which he makes reference:
1. That a fee agreement was provided for the Golden Century litigation and the settlement monies were paid: PF14, para 4 Exh 1, page 1.
2. That Mr Ho had told [Mr Ho's wife] that he had an arrangement to pay Mr Wong 40% of the settlement monies (this being contained in an affidavit of Mr Ho's ex wife which Mr Fordyce attached to his affidavit).
3. That Mr Ho had a number of different addresses whilst Mr Fordyce was retained by him: see PF14 77- 80.
4. That Mr Ho was as at November 2014 73 years of age: PF14 para 82(e).
5. That Mr Ho was estranged from his children: PF14 para 82.
6. That Mr Ho has an elder brother who lives in Sydney: PF14 para 82(d).
7. That Mr Ho left the matrimonial home in Davidson for the last time in January 2012: PF18, para 14 Annex C, page 20, para 5 (being again part of an affidavit of Mr Ho's ex wife).
8. That Mr Ho's daughter Sarah commenced proceedings against him in the Guardianship Tribunal asserting that he was suffering from dementia and was under the control of Mr Wong: PF14, Exh 1, p 142.
9. That before the matter was heard in the Tribunal Mr Ho left Australia for New Zealand and then went to Singapore to act as a consultant for a restaurant business: PF14, Ex 1, pp 143- 144 (these pages are actually part of the Tribunal's Reasons for Decision and do not actually establish the matters asserted).
10. Orders were made by the Tribunal taking over control of Mr Ho's financial and personal affairs: PF14, Exh 1, pp 158- 159.
11. In April 2014 Mr Fordyce told Mr Wong that he was proposing to cease acting for Mr Ho in the BBQ King proceedings and served a draft Notice of Intention of Ceasing to Act: PF14, para 52, p 136.
12. Mr Wong requested Mr Fordyce not to file the Notice of Intention of Ceasing to Act: PF14, p 133- 134.
13. In April and May 2014 expert reports were received from Mr Doyle and Mr Arnold, relating to PAYG Tax and GST: PF14 para 33, tabs 4 and 5.
14. Mr Fordyce advised Mr Wong that the matters the subject of the reports referred to in (13) should be advised to the ATO, but Mr Wong instructed him not to do so.
15. That Mr Wong told him to take out any reference to Mr Wong in the bills (see PF14, para 113).
In addition:
1. Mr Fordyce claims that Mr Ho is very frail and he does not know how Mr Ho collects mail from this post office box, which is also located within proximity of the office of Bennelong Partners." (para 8 and 80 PF14)
2. Mr Fordyce draws attention to the fact that all invoices which he has sent out to Mr Ho contain the notation: see para 16 of PF14-
"You may apply under s.328 of the Act to set aside any costs agreement, or a provision of any costs agreement entered into between us on the basis that it is not fair and reasonable."
1. In PF14 Mr Fordyce says at [64]
"In this conversation Mr Wong said to me: "Mr Ho has dual passports. All of his assets are safely located in Asia. He doesn't intend to have his affairs controlled by his children or the orders made by the Guardianship Tribunal. If he can't have the orders set aside he won't ever need to return to this country and he won't be. He has a business in Singapore- there is no need for him to return."
1. And at [75]
"The assets of Mr Ho as accounted for by the NSW Trustee & Guardian were in the sum of $910.10 as set out in the letter and attached material sent to Mr Ho, care of our office, dated 6 February 2014. A copy of this letter is at Tab 17."
1. Mr Fordyce says he has never been certain where Mr Ho is in fact living at any point of time.
2. That Mr Fordyce says that if he recovers legal costs against Mr Ho
"I am not aware of any assets that Mr Ho has in Australia where any such costs determination could be recovered from Mr Ho."
1. That it was Mr Fordyce's practice not to require his clients to sign letters of engagement: see PF14 para 8 (d)- (n).
A number of matters asserted by Mr Fordyce in his affidavit are denied by Mr Wong. For example Mr Wong denies what is asserted by Mr Fordyce at PF14 para 64. He denies Mr Fordyce's assertions in PF 82(b) and (c) and says that all of the monies paid by Bennelong Partners to Mr Fordyce were reimbursed by Mr Ho: see WW2 para 25. He denies that he said to Mr Fordyce what is attributed to him at PF14 para 112: see WW2 para 26, and what is attributed to him at PF14 para 11 and 12 PF18 para 8.
Mr Fordyce claimed that Mr Ho was living at the office of Bennelong Partners: see paras 4 and 5 of Mr Fordyce's affidavit of 25 November 2014, a contention for which he does derive support from the affidavit of Mr Connell (see para 8) although the conversation with Mr Wong to which Mr Connell refers was in March 2012 and there is not in the conversation any indication of the period of time for which that had occurred or was likely to continue. This is disputed by Mr Wong and Ms Leung in their affidavits of 10 December 2014.
Mr Ho in his affidavit explained that he is able to get around even though he uses a walking stick: see HO2 para 7 and 8.
Mr Fordyce claimed that the summons was an attempt to delay or hinder Mr Fordyce from recovering his costs from Mr Ho (see PFS 89) and one of the reasons attributed to that delay in Mr Fordyce's submissions is the fact that settlement of the BBQ King case is imminent. The genesis of these proceedings is the costs which Mr Fordyce seeks to recover from Mr Ho and his companies. There is something ironic in a solicitor resisting an application by a plaintiff on the basis that the plaintiff has no funds from which the solicitor's costs of defending the application can be met when the plaintiff's case arises out of the solicitors' attempts to recover costs from the plaintiff.
Mr Fordyce in his submissions PFCS para 43 asserted that Mr Burke was tainted by reason of the failure of Mr Hyde to disclose Mr Belling's former connection with Mr Burke. No evidence has been put forward to support the contention that Mr Burke has not acted appropriately in the matter.
Mr Fordyce contends that it is clear that Mr Ho is living overseas (see PFS 67). The evidence does not support that contention and Mr Ho says he has been a resident in Australia since 1960: see HO2 para 2.
Mr Ho denies that he has ever told Mr Fordyce that Mr Wong or Ms Leung had authority to make decisions for him and that they ever have: see HO2 para 6.5.
Uniform Civil Procedure Rules 2005 (NSW) 25.20 provides
"Requirements for grant of search order
The court may make a search order if the court is satisfied that:
(a) an applicant seeking the order has a strong prima facie case on an accrued cause of action, and
(b) the potential or actual loss or damage to the applicant will be serious if the search order is not made, and
(c) there is sufficient evidence in relation to a respondent that:
(i) the respondent possesses important evidentiary material, and
(ii) there is a real possibility that the respondent might destroy such material or cause it to be unavailable for use in evidence in a proceeding or anticipated proceeding before the court."
and see also Practice Note SC Gen 13
"8. The affidavits in support of an application for a search order should include the following information:
(c) why the order is sought, including why there is a real possibility that the things to be searched for will be destroyed or otherwise made unavailable for use in evidence before the Court unless the order is made;"
"20. An applicant ex parte for a search order is under a duty to the Court to make full and frank disclosure of all material facts to the Court. This includes disclosure of possible defences known to the applicant and of any financial information which may cast doubt on the applicant's ability to meet the usual undertaking as to damages from assets within Australia."
Mr Fordyce also refers to Wiederstein at [48] in which McMillan J said:
"[48] To establish an entitlement to a search order, the plaintiffs must show:
(a) a strong prima facie case;
(b) serious potential or actual loss or damage to the applicants if the search order is not made;
(c) sufficient evidence that the first defendant possesses important evidentiary material and the real possibility that he may destroy such material or cause it to become available for use in the proceeding."
What is said in Wiederstein, I accept, reflects what was said in Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55, 62 per Ormrod LJ; to this I would add what is said in Liberty Financial Pty Ltd v Scott [2002] FCA 345 [40]- [49] per Weinberg J.
The plaintiffs in their resistance to Mr Fordyce's motion relied on the following evidence:
1. Affidavit of Mr Ho of 1 October 2014.
2. Affidavit of Mr Wong of 1 October 2014.
3. Affidavit of Mr Webeck of 29 September 2014.
4. Affidavit of Mr Wong of 15 December 2014.
5. Affidavit of Mr Ardavan Ghorbani of 10 December 2014.
6. Affidavit of Mr Webeck of 10 December 2014.
7. Affidavit of Mr Bryan Belling of 10 December 2014.
8. Affidavit of Mr Ho of 12 December 2014.
None of the plaintiffs' witnesses, or Mr Fordyce, were cross examined.
[2]
In relation to (1): Anton Piller
Mr Fordyce's submissions treat this case as being one entirely within the normal Anton Piller style of case and criticises both Mr Hyde of counsel who appeared for the plaintiffs and my reasons of 1 October. Indeed Mr Fordyce expresses the view that the plaintiff's application was doomed to fail and should never have been brought. As will be apparent from the transcript and my judgment I did not regard the matter as falling within the typical Anton Piller or search order case. I referred to Markus and Halpin as cases in which a party wished to avoid using the normal procedures because of a concern as to the alteration of evidence and endeavored to deal with the fact that on the plaintiffs' case they have never received the costs agreement and that Mr Fordyce has only created the costs agreements at a date much later then the date on which they are purported to have been first created (see para 36 Mr Wongs' affidavit) and that they were seeking evidence that that was the position. Their evidence that they had never received the costs agreement was evidence that it had never been sent to them (although leaving open a possibility that mail had been sent to the wrong address). The fact that Mr Fordyce did not attach a signed copy of the agreements to his Costs Responses was a relevant matter. That Mr Fordyce now explains that he does not insist on obtaining signed copies by return (and he says rarely does receive them back signed) does not alter the fact that the absence of any signed copy of the agreement is relevant in determining whether in fact the copies were ever made at the time that Mr Fordyce says they were created and provided to the plaintiffs.
I sought in my judgment to avoid any suggestion that I had concluded on the material before me that Mr Fordyce had in fact created documents in or after June 2014 but bearing earlier dates. That comment was not intended to express an opinion on the strength or weakness of the plaintiff's case. I was endeavouring to deal with a situation in which the plaintiff wished, in effect, to obtain discovery in connection with those costs applications that process having already commenced but without appraising Mr Fordyce of that in advance. The application was not to seize items that would be taken from a defendant but to search his computer for the costs agreements and copy those documents and or their metadata removing the risk that material on Mr Fordyce's computer important to the plaintiff's case would be wiped, hence defeating 'the ends of justice' (see Denning LJ in Anton Piller at p 61B). The absence of any costs agreement signed by Mr Ho, the evidence of Mr Ho and Mr Wilson that they had not received any of the six costs agreements and the absence of any letter or correspondence from Mr Fordyce enclosing the cost agreements or seeking their return signed supported the plaintiffs' contention that the costs agreements were only created in or after June 2014, and were not provided to them. The matters referred to in para 37(a) of Mr Wong's first affidavit provided some support for the plaintiffs' contention as well. Mr Fordyce attacks those items in his submissions but I am not persuaded at present that they are factually wrong and again Mr Wong was not cross examined on these matters. For reasons which I shall explain below I think that the plaintiffs' contentions are strengthened by the Klein report. They are also strengthened by the absence of any letters from Mr Fordyce requesting Mr Ho, or Mr Wilson and Ms Leung, to send back signed copies of what he claims had previously been sent to Mr Ho, even after the Tribunal required that he do so.
I referred in my reasons for judgment of 1 October 2014 to Wiederstein. That case had commenced as a case for freezing orders but also concerned an application for a search order involving computers and devices, company records and a rooftop compartment against a defendant who had by that stage been made bankrupt. McMillan J, it is clear, looked at the matter as a search order requiring a strong prima facie case to be established, that the plaintiff establish the serious potential for (or actual loss or damage) if the search orders were not made and sufficient evidence that that defendant might destroy such material or cause it to become unavailable for use in the proceeding. His Honour held that the evidence established that the first and third defendants (inter alia) were persons who may have concealed books and records, he also said:
"There is also sufficient evidence that the first defendant possesses important evidentiary material and there is a real possibility that he may destroy that material or it will become unavailable for use in the proceeding. If the search order is not made, the plaintiffs will suffer serious potential or actual loss and damage."
Apart from matters going to the creation of document allegedly bearing false dates there was no evidence against Mr Fordyce of the kind which was found in Wiederstein, and it is true Wiederstein was determined in accordance with the usual requirements of an Anton Piller case. I accept on closer analysis that Wiederstein, whilst establishing that an order can be obtained once proceedings have commenced, offers no support for a less stringent test than that established in Anton Piller.
As I have endeavored to point out in my reasons of 1 October, the plaintiffs could have sought an order for discovery from Mr Fordyce. To insist on that step would have been to alert Mr Fordyce to the wish of the plaintiffs to obtain that information from him, allowing him an opportunity to remove it from the hard drive or change the hard drive, if he was so minded.
Mr Fordyce attacks the reasons for judgment on the basis that they do not set out the conclusions that are required for the making of an Anton Piller order and claims that counsel for the plaintiffs failed in their duty to the Court. In so doing he wrongly, in my view, ascribes blame to counsel for the plaintiffs. It was my suggestion that the matter could be approached as one that was not a strict Anton Piller application and that was taken up by counsel. Even if the approach I took was erroneous because I did not direct attention to whether the conditions outlined in Anton Piller were established I do not think it would in any event be appropriate to set aside the orders made because of any claimed breach of obligation by counsel.
I turn now to the question of whether there was a real possibility that if the plaintiffs did not obtain the October order that Mr Fordyce might destroy such material as existed on his computer that would reveal that the costs agreements were not in fact created on the date that they bear. In this connection Mr Fordyce points to the fact that he is a solicitor and officer of the Court. He also points out that there was no evidence that established any concern that he might seek to have the computer record altered to remove any trace of recent creation being established. It is true that one expects a very high standard of conduct from solicitors of this State. There have, however, been cases when those standards have not been met and a notorious case of fabrication of a costs agreement was seen in the matter of Law Society of New South Wales, Council of v Foreman (No 2) (1994) 34 NSWLR 408. It is true that the plaintiffs had no expert evidence which established that documents could be removed without an electronic trace. I do not think that the plaintiff was required to have evidence that a person can delete material from a computer (that is common knowledge) or that material can be deleted without a trace. I do not think it would be appropriate to require a computer expert to detail methods by which dates on a computer could be erased in an undetectable fashion. If a person has created a document that bears a false date it must follow that there is a serious risk that they may seek to remove evidence of that fact if given advanced warning. If there is a proper basis for contending (ie as opposed to clear evidence) that a person has created a document bearing a false date and given the ease by which documents can be deleted from a computer I think it follows that there is a real possibility that the evidence which the plaintiffs seek might be wiped if advance notice is given. I do not think that it is appropriate, where evidence otherwise establishes a right to the relief sought, to refuse the grant of relief because the defendant is a solicitor and an officer of the Court. It is relevant in my view that, notwithstanding the intrusive nature of the orders sought, what was sought was the opportunity to copy only, not to remove the relevant information from the possession or control of Mr Fordyce, in a context where Cost Assessment and Response had already been lodged, ie a litigation framework.
Mr Fordyce has made much of the fact that the presence of the experts in his board room has been very disruptive and he complains that the Court was not told how disruptive the process would be: see PFS 31- 38. Mr Kelly claims that the copying process could have been undertaken in a very short time if Mr Fordyce had agreed to his computer being taken for a short period to Klein & Co's office but he would not agree to that course. Mr Fordyce was entitled to insist that the computer stay at his office. Mr Ghorbani stated that the process would have taken half the time had Mr Fordyce been willing to allow Klein & Co to remove the computer, with I infer, less interruption to Mr Fordyce. It is somewhat unfair to criticise Mr Hyde for not describing the process as likely to take the time which it has in fact taken, but it does appear that the extent of time for the operation was underestimated.
[3]
In relation to (2): Address
Mr Ho did not give a residential address on the summons but rather a P.O box. On his affidavit he gave his address care of HWL Ebsworth Lawyers with that firm's address. My attention was not drawn on 1 October 2014 to the fact that Mr Ho had not given a residential address. Mr Fordyce says it should have been.
A party is required to provide an address and also an address for service on any originating process: rule 4.2(1)(g) of the Uniform Civil Procedure Rules. It does not provide that the first mentioned address must be a residential address. The address for service must not be a post office box. Mr Ho gave as his address a P.O box but that was not the address for service. It has been held that a P.O box is not, within the meaning of rule 4.5 of the Uniform Civil Procedure Rules, a proper address for service: Kelly v Mosman Municipal Council (2010) 178 LGERA 136 at [64] per Campbell JA. There is no decision on whether a P.O box is an address for the purpose of rule 4.2(1).
Mr Ho explained in his second affidavit (of 12 December 2014) why he was reluctant to disclose his home address. Not only was he not cross examined on this evidence but it is consistent with Mr Fordyce's conduct in the past on behalf of Mr Ho: see letter 10 October 2013 from Mr Fordyce to Tribunal, Wong affidavit 15 December 2014 Annex A para 22-27, and see PF14 p 197- 199. Mr Ho did give an address in his affidavit of 12 December 2014. Mr Fordyce in his submissions challenged the address but did not cross examine Mr Ho and did not lead any evidence to support his contentions about that address.
If there was a failure to provide an address, and in my view a P.O Box address is not sufficient, I would not regard that as a basis for setting aside the orders made on 1 October 2014. I think that my attention should, however, have been drawn to the anomaly.
There is authority for the proposition that a residential address need not be given in an affidavit: Short v Burn [2012] NSWSC 695 [42]- [43] per Adamson J. The affidavit in that case gave as the deponent's address care of the solicitor's address, and her Honour held that the affidavit was not irregular in form.
[4]
In relation to (3): Independent Solicitor
The rules require that the independent solicitor cannot be a member or employee of the applicant's firm of solicitors and in this case the independent solicitor was not a member or employee of the applicant's firm.
I accept that the applicant for appointment of an independent solicitor is not required to advise the Court that he or she personally knows the proposed candidate. However having been asked the question that I did ask I think full candour required Mr Hyde (or those instructing him if he did not know it) to inform the Court that Mr Belling had been a partner of the applicant solicitor in recent times since, I infer, that was at least one of the reasons for his selection. I can accept that views may differ on this point and I do not regard it as a significant failure to meet the high standards that are required of counsel and solicitors on an ex parte application. I am not sure that had I been informed of that connection I would have required the appointment of another person but it is at least possible that I would have done so.
Having said that I accept Mr Kelly's contention that the conduct of the independent solicitor has not been impugned in any respect. No complaint was made about this when the matter came before Pembroke J on 15 October 2015 and I note that on that occasion Mr F Lever SC appeared for Mr Fordyce. I note too that experienced counsel, Mr Bruce Connell, assisted Mr Fordyce in dealing with the matter on 2 October 2014: see report of Klein & Co p 8 annexed to the affidavit of Mr Ardavan Ghorbani of 10 December 2014 and see T11 26- 35 (confirmed by Mr Connell's affidavit of 26 November 2014 paras 9- 18).
[5]
In relation to (4): The Email of 18 September 2013
In my view Mr Fordyce's reliance on the email of 18 September is misconceived. I accept the submissions of the plaintiff that the existence of the email was not detrimental to the plaintiff's case. At worst from the plaintiff's point of view it is neutral and on one view (the view I prefer) it supports the plaintiff's case because:
1. it does not attach a copy of the alleged cost agreement asking that it be signed
2. it notes that the Tribunal has said that it needed a signed copy of a costs agreement
3. it does not record that Mr Fordyce has sent a copy of the costs agreement to the Tribunal
4. it does not ask Mr Wong and Ms Leung to have Mr Ho sign the costs agreement notwithstanding the fact that the Tribunal said they wanted a signed costs agreement and Mr Fordyce knew either that he did not have a signed costs agreement from Mr Ho (or his companies) or that it was most unlikely that he did (given his evidence recorded at 20 above)
5. the first named addressee of the email is Georgina Wu, an employee of Mr Fordyce
In para 66 of PF14 Mr Fordyce asserts that
"In our email to Mr Wong and Claudia Leung of 18 September 2013, sent at 1:27 pm, I asked for a copy of the cost agreement in the BBQ King case to be signed by Mr Ho for the Public Guardian. That did not happen, and as far as I am aware, I have been able to determine no response was made to that request. I did not have a signed copy of this costs agreement at the time that I sent the email to Mr Wong and none was sent to me in response to my request."
What was sent to the Tribunal was in fact a costs agreement in relation to the BBQ King litigation and not a costs agreement in relation to the application before the Tribunal. The agreement relating to the Tribunal was not, according to the Klein report, created until 16 June 2014.
The Tribunal's letter of 10 September 2013 said
"please confirm as follows… 3. whether you are presently acting for the person in any matter? Please provide forward a copy of the Costs Agreement for all matters for this Office's consideration"
The Tribunal by its letter of 19 September 2013 pointed out that they needed a signed copy of the costs agreement but they were not favoured with a response.
The copy sent to the Tribunal did not have Mr Fordyce's signature on it either, although the copies sent with his Costs Response do contain his signature.
The email of which Mr Wong and Ms Leung were recipients did not ask for a copy of the costs agreement "in the BBQ King case" to be signed. The email did not assert that there was a costs agreement in existence. It did not ask Mr Wong or Ms Leung to arrange for execution by Mr Ho and there is no evidence of any follow up by Mr Fordyce or Ms Wu seeking the return of a signed costs agreement.
I also accept Mr Wong's evidence and Ms Leung's evidence that they were not conscious of receipt of that email and did not understand that a letter of engagement was intended to mean 'costs agreement'. Had they been conscious I accept that they would not have understood the email to be detrimental to their case since on its face it is entirely consistent with no costs agreement ever having been prepared and forwarded to Mr Ho. There is nothing to indicate that counsel or the solicitors for the plaintiffs were aware of the email.
Mr Fordyce submitted at PFS 35(e) that
"the existence of the costs agreement provided to the Guardian in September 2013, which Mr Wong knew was the subject of discussion, renders this evidence of costs agreement being created in or about June 2014 totally nugatory".
I am unable to accept that submission for the following reasons:
1. The fact that on 10 September 2013 Mr Fordyce sent a copy of an unsigned letter of engagement (or 'costs agreement') bearing date 3 April 2011 to the Guardian does not prove that it was in existence at any time prior to 10 September 2013.
2. The letter to the Guardian was sent on 10 September 2013 and it enclosed a "letter of engagement" dated 3 April 2012. According to the Klein report the file relating to the Tribunal on which that letter to Mr Ho is located was created on 10 September 2013. What that demonstrates prima facie is that Mr Fordyce created the letter bearing date 3 April 2012 on 10 September 2013. That is consistent with the plaintiffs' case that they did not receive any letter of engagement or as they would understand it costs agreement, in April 2012. There is thus a strong prima facie case that Mr Fordyce never did send Mr Ho the letter of 3 April 2012. Mr Fordyce has offered no explanation for the existence of two letters of engagement in relation to the Tribunal matter. Both letters bear a date which antedates the file creation date by a lengthy period (17 months and 9 months respectively).
3. Mr Fordyce seems to endeavour to paint the plaintiffs' case as being wholly hinged on whether the costs agreements were created in or about June 2014. Creation of a letter in September 2013 bearing date 3 April 2012 is still a fabrication even if not effected in June 2014. The second Tribunal fee agreement letter was, according to the Klein & Co table, created in June 2014.
4. Mr Fordyce did not inform Mr Wong or Ms Leung that he had sent anything to the Tribunal.
Mr Fordyce contends that the Klein report
"shows all sorts of wrong, inconsistent and nonsensical things- not material that would conclusively establish whether there were grounds for making the order" (DSR para 41).
He then embarks upon a detailed analysis of the Klein report and asserts, for example, that the Klein report can be shown conclusively to be proven wrong.
Mr Kelly pointed out that the Klein report does not purport to be the final report but is, and was clearly expressed to be, an initial analysis. With that qualification in mind, of the eleven documents in respect of which examination was conducted (including the six letters of engagement) the document date and the date of file creation taken from what the Klein report describes as "the internal document timestamps of the files" which I take it might also be described as "meta-data" are radically different in four instances ie, according to the report in respect of an engagement letter dated 3 April 2012 the file was created on 17 June 2014, in respect of one letter bearing date 27 April 2012 the file was created on 17 June 2014 and in respect of two engagement letters dated 4 September 2013 the file was created 16 June 2014.
Prima facie the Klein report establishes that a number of the files were only created a significant period after the date which the costs letter bears hence lending support to the plaintiffs' case that the costs agreements were not in existence at the time that Mr Fordyce has asserted in his costs responses they were.
Mr Fordyce refers to the fact that some of the documents in the table in the Klein report bear a date a few days before the date of file creation. I do not see this as undermining the Klein report at all- the expert does not know why each letter of engagement was dated with the date it bears. The computer does not date stamp the text of letters that are created- a letter, I assume, can be created with any date the author chooses. What cannot be changed so readily is the date that the file was created. Mr Fordyce draws attention to the fact that the report shows for the first item an engagement letter bearing date 3 April 2012 a date last printed of 16 September 2010. That does seem rather odd and will require explanation but that particular letter of engagement is one which, according to the report, was created after the date of file creation. The Klein report itself does not explicitly assert that the letters have never been printed (and it is not clear to what 'printing of an application' refers) but the table, by the absence of any date under 'Application Last Printed', suggests that. I accept that, in relation to the other documents, there may be issues relating to printing but I do not think this of itself necessarily undermines Klein & Co's evidence as to the date of creation. Mr Fordyce made submissions orally at T59 concerning the Klein report asserting that his hard drives had been replaced and material moved in the past impugning the reliability of any conclusion based on what is currently found: T59.33- T60.2. There is in that a mixture of asserted but unproven facts and, in effect, conjecture which do not detract from the initial conclusions in the Klein report concerning the dates that files were first created in contrast to the dates which they bear.
The further submissions of Mr Fordyce of 7 April 2015 contain contentions to the effect that no regard should be had to the Klein report because of the principles discussed by the Court of Appeal in Australian Securities and Investments Commission v Rich [2009] NSWSC 1456. He submitted that the independent computer experts cannot act in the matter any further because they were in attendance at his office (and in Court on 17 December) and that this has rendered them unable to complete an independent and impartial report. Indeed the submissions contend that the experts should not be permitted to undertake a futher (ie final) report in the matter. Mr Fordyce contends that they have accepted both an investigatory role and an expert witness role.
These further submissions are not submissions in reply- they raise for the first time a matter that should have been dealt with in Mr Fordyce's submissions handed up in Court on 17 December 2014 or at least in the submissions of 2 March 2015. They also involve assertions of bias on the part of Mr Ardavan Ghorbani that were not put to Mr Ghorbani. For these reasons I do not intend to consider them (see Bull v Lee (No 2) [2009] NSWCA 362 [8]- [10]), save to say that in my view it is entirely reasonable for a forensic computer examiner to attend at the office of the person whose computer and electronic peripherals are to be examined, and there was no impediment to him to be present in Court to answer any questions which might have arisen (as indeed they did see T47- 48) or even to be cross examined by Mr Fordyce should that course have been taken.
In short I am persuaded that the Klein report provides support for the allegations made by the plaintiff, and is sufficiently cogent as to warrant Klein & Co being given the opportunity to complete their report.
[6]
In relation to (5): Mr Ho's Assets
Mr Fordyce asserts that Mr Ho has no assets in Australia and that this should have been disclosed. I have set out Practice Note SC Gen 13 and 20 relied on by Mr Fordyce to support his contention that Mr Ho should have disclosed financial information which
"may cast doubt on the applicant's ability to meet the usual undertaking as to damages from assets within Australia".
Mr Ho in his affidavit of 12 December 2014 para 9 explains that when he gave the undertaking as to damages on 1 October (see para 32 of his affidavit of 4 October 2014)
"I had available to me assets which I believed were adequate to support the undertaking including an amount on deposit with Citigroup and an order which then became a judgment in my favour for payment of costs."
The Citigroup deposit was an amount of $24,677.43 and the order dated 22 September 2014 was for the payment to him of $77,713.34 (see Annex "B" and "C"). The order became a judgment on 2 October 2014.
Mr Ho does not specify what other debts he had at the time, but he was not cross examined on the point. In my view the fact that an order or judgment is obtained against a third party does not establish that a plaintiff has the value of the order or judgment as an asset available to a defendant who ultimately succeeds in establishing that the orders should not have been obtained.
A question arises as to the duty of a solicitor and barrister to ensure that a client who gives an undertaking to pay any damages has the wherewithal to meet such an order from assets in Australia. If a solicitor or barrister is aware that their client does not have funds in Australia to meet such an obligation then, they would, in my view have such an obligation. It has not been established what the solicitor and barrister for Mr Ho knew.
When a plaintiff proffers an undertaking as to damages that might result from obtaining an order ex parte that is ultimately found not to have been justified, careful consideration needs to be given to whether the plaintiff has adequate assets within the jurisdiction to meet such an order. In my view in this case there were reasons why the plaintiffs might not have the wherewithal to meet their obligation:
1. It is not suggested that the corporate plaintiffs had any funds out of which damages could be paid.
2. Mr Ho was incurring liabilities to his solicitors in relation to these proceedings. It is true that the evidence is that he has paid all of the accounts of his current lawyers promptly (see Mr Webeck's affidavit of 10 December 2014 and that as at 10 December 2014 the trust account was $20,000 in credit and see Mr Belling's affidavit of 10 December 2014 showing that bills of his have been paid promptly) but the willingness of those solicitors to accept a risk that that would not occur is not to be equated to the defendants' position.
Mr Ho does have a connection with Singapore it appears and the small amount of money which he pointed to as his assets in Australia seems to suggest that the bulk of his assets are held elsewhere.
[7]
In relation to (6): Termination of Mr Fordyce's Retainer
The reason for the termination of Mr Fordyce's retainer is disputed. I do not think it is relevant to the question of whether Mr Fordyce had or had not created costs agreements at dates much later than those they bear, and hence as to whether he did provide the costs agreements to the plaintiffs as he says he did. Whether the plaintiffs' history of payment of bills was poor as Mr Fordyce claims is also irrelevant to the present matter. Criticisms of the form of the costs objections are also irrelevant.
[8]
In relation to (7): Formerly Deregistered Companies
There is no evidence before the Court as to whether Rhodium and Trading House now hold any assets but proceeding on the basis that they do not the question is whether Mr Ho, who gave the undertaking on his own behalf as well as a director of Rhodium and Trading House, can meet any obligation that the plaintiffs have to pay damages for obtaining the orders and I have dealt with that.
[9]
Alleged breach of duty by Mr Fordyce
The plaintiffs claimed that Mr Fordyce had himself failed in his duty to the Court in two respects (see HS (51) and (53):
1. That on 11 December 2014 when appearing before Bergin CJ in Eq, Mr Fordyce as an explanation for the urgency of a hearing informed her Honour about an article that had appeared on an internet blog. Mr Fordyce handed up a copy of the article but failed to draw to her Honour's attention the fact that the article had been altered following representations made by Mr Fordyce to the administrator or blogger.
2. On the same occasion Mr Fordyce informed her Honour that no report had been received from Klein & Co, when in fact he had received a report (ie the Klein report).
3. These criticisms were not the subject of any response from Mr Fordyce but even accepting the plaintiffs are correct in their contention, what Mr Fordyce has said in the presence of an opponent is different to what has been said with no opponent present. I do not think that breaches by Mr Fordyce, even if established, can assist the plaintiffs.
[10]
The amount involved
In an endeavour to encourage the parties to resolve their disputes (either partially or wholly) and before further expense was incurred, I enquired, at the hearing on 17 December 2014, as to what difference a failure by a solicitor to provide a costs agreement would have on what the solicitor would recover. There was no agreement on that point and indeed both sets of submissions have referred to the topic. Mr Fordyce's submissions have been particularly detailed and he claims that the effect of not having provided a costs agreement (ie contrary to his case that he did) is of a very small order- and could be as low as $22,000 (see PFSR para 2.17 (xiii)). This is contested by the plaintiffs. In my view the size of the financial effect is irrelevant and I do not intend to enter upon it.
[11]
Failure to disclose and Ex Parte Orders
An important decision in this area is that of the NSW Court of Appeal in Garrard t/as Arthur Anderson & Co v Email Furniture Pty Ltd (1993) 32 NSWLR 662 per Mahoney AP with whom Clarke JA agreed
"The courts have, for many years, required a high standard of candour and responsibility of those who seek ex parte orders"
and his Honour then cited what had been said by Isaacs J in Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 approving in turn of what had been said in Dalglish v Jarvie (1850) 2 Mac & G 231
"that it is the duty of a party asking for an injunction ex parte to bringunder the notice of the Court all facts material to the determination ofhis right to that injunction, and it is no excuse for him to say that he wasnot aware of their importance. Uberrima fides is required, and the partyinducing the Court to act in the absence of the other party, fails in hisobligation unless he supplies the place of the absent party to the extentof bringing forward all the material facts which that party wouldpresumably have brought forward in his defence to that application.Unless that is done, the implied condition upon which the Court acts informing its judgment is unfulfilled and the order so obtained mustalmost invariably fall. I add the word 'almost' in deference to such anexceptional case as Holden v Waterlow 15 WR 139. The obligation isstated by Turner LJ in that case (at 140) to be to 'state their case fullyand fairly', and so by Sugden LC in Dease v Plunkett Drury 255 at 261where he said: 'The plaintiff had not fully and fairly disclosed the entirefacts of the case'."
Mahoney AP noted that the non-disclosure in that case was not deliberate.
As mentioned earlier two important cases dealing with ex parte orders are Brags and Geneva.
At [17]- [18] of Brags, Brereton J summarised the position
"[17] First, where an Anton Pillar order is made ex parte (as it ordinarily will be), an applicant to set the order aside bears an onus of showing some reason why it should be set aside. However, it may be a sufficient reason to set aside the order that the grounds for such an order were not satisfied. Secondly, where such an application is made on the ground that there has been bad faith or material non-disclosure, then the court may set aside the order ab initio, but otherwise a discharge will operate in futuro only. Thus, where an application is made to set aside or discharge the order on the basis that the grounds for making such an order were not established, that will be of little utility if made after the order has been executed. At least in the absence of bad faith or non-disclosure, the remedy for a defendant where it is shown ultimately that an Anton Pillar order ought not have been made, is not to have the order set aside, but pursuant to the undertaking as to damages. Thirdly, on an application to set aside an Anton Pilar order, the court may take into account on the hearing of the application the "fruits of the order" - that is to say, any evidence or admission procured as a result of the order - and any further evidence adduced in the meantime.
[18] Generally speaking, an applicant for an Anton Pillar order must show a strong prima facie case, serious potential or actual damage to the plaintiff, clear evidence that the defendant has in its possession incriminating documents or things, and a real possibility that they may be destroyed before any inter-partes application can be disposed of, is that the risk of damage occasioned to the defendant and its affairs by the order is not excessive or disproportionate to the legitimate object of the order. Although sometimes strong adverbs are used - such as "extremely" strong prima facie case or "very serious" potential damage [see Austress Freyssinet at [15]] - I am not convinced that those extreme adverbs form part of the test. In every case, the court will be involved in balancing the strength of the case, the seriousness of the damage, the gravity of the risk of destruction, and the potential injury to the defendant. These are factors to be taken into account in the exercise of a discretion, rather than essential proofs."
In Geneva Gleeson J made reference to Brags and then said
"[51] In Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 4) (2010) 269 ALR 76 ; [2010] FCA 398at [69], Yates J said (albeit not in the context of an application to set aside an ex parte application):
…even in the case of orders of a procedural nature, the principle of finality of litigation does have a role to play which, having regard to considerations of case management, is not unimportant. It is to be borne in mind that the civil practice and procedure provisions respecting this court, including its rules made under the Federal Court of Australia Act, must be interpreted and applied, and every power conferred by them must be exercised or carried out, in the way that best promotes the overarching purpose identified in s 37M of the Act of facilitating the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. That overarching purpose will not be achieved, but will be subverted, by a too-ready resort to, or incautious application of, the power to vary or set aside orders that have been made and entered, even where the orders are of a procedural nature.
[52] In JC Techforce, Branson J identified the following two factors "telling against the exercise of the discretion" to set aside a search order, after the order had been executed:
(1) the failure of the respondents to identify any utility which would result from the setting aside of the order;
(2) the delay (of 3 months) which attended the making of the application."
There is a theme in Mr Fordyce's submissions that somehow the onus of proof has been inverted, ie that he has been required to prove his innocence. I think this misstates the position. The only factual question in issue to which these proceedings relate is whether Mr Fordyce in fact provided to the plaintiffs costs agreements in the Tribunal matter and the BBQ matter at or about the dates which the costs agreements attached to his costs response bear. The plaintiffs say that he did not do so and wish to establish as fact that the costs agreements were created later and hence could not have been sent by post to Mr Ho when Mr Fordyce says he sent them. It may well be that the plaintiffs were hoping to establish that all of the costs agreements were created around the time of the cost responses but I do not see the particular later date as of critical importance. Mr Fordyce is not being required to prove anything- rather what was required of him was to give discovery by permitting access to his computer to reveal dates of creation before there is any opportunity to remove that material. If the metadata does not establish that the plaintiff's contention is correct then a potentially important part of their case will be removed. If it does establish that the documents were created at later dates than that which the document bear their case will, at least arguably, be assisted.
I have given consideration as to whether the failure to draw attention to the limited nature of Mr Ho's assets in Australia is of an order which should lead to the revocation of the orders made. I have come to the view that it should not and for the following reasons:
1. Mr Ho believed that he had the means to compensate Mr Fordyce out of the funds he held with Citibank. There is no evidence that Mr Ho is paying his solicitors out of funds held in Australia.
2. Mr Ho was entitled to consider that the loss to Mr Fordyce of the anticipated interruption of his legal business would be relatively slight. Mr Fordyce has claimed as at December 2014 that he has spent $115,000 in defending himself (of which only $7,400 is for Mr Lever's fees) and much of it is Mr Fordyce's own time costing and for his work in seeking to have the orders revoked.
3. Mr Ho offered to provide security of $30,000. That amount was not challenged before Bergin CJ in Eq as inappropriate by Mr Fordyce, and would be available and very likely sufficient to compensate Mr Fordyce for any likely damage that might have been caused by the obtaining of the orders ex parte were the Court to have formed the view that they should not have been made and should be revoked. It is relevant in that connection that no steps were taken initially by Mr Fordyce to have the orders set aside, and he complied with the orders including the provision of his affidavit of 20 October 2014.
4. In my view none of the other matters to which I have referred justify setting aside the orders.
The orders which I made on 1 October 2014 have been executed. No further steps are required of Mr Fordyce nor is any further access to his computer required. No application was made at the time of receipt of the order or even on 15 October when Mr Fordyce was represented to set aside the order or to preclude the expert from preparing his report. The report is not in final form. The experts have what they need to finalise the report but have been prevented from so doing pending the outcome of this application. The material to which the experts have had access is material to which the plaintiffs would be entitled to see as part of the normal discovery process. The Klein report, notwithstanding that it is not a final report, coupled with Mr Ho and Mr Wilson's evidence and the evidence relating to the correspondence with the Tribunal in my view constitute a sufficiently strong prima facie case to warrant the continuation of the orders.
Even were I wrong in that conclusion I think there is enough to warrant the completion of the Klein report in any event. There is a practical aspect to the matter to which attention needs to be given namely that if Mr Fordyce's computer does reveal that documents were created well after the date which they bear as the Klein report indicates at least on the material analysed by Mr Ghorbani to date I do not think it can be said that it is in the interests of justice to set aside the orders and require the return of copies made of relevant files and data on Mr Fordyce's computer.
[12]
Conclusion
It follows that in my view the orders made on 1 October 2014 should not be set aside. The defendants' motion should be dismissed and the defendants should pay the plaintiff's costs.
[13]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 11 May 2015