Sayour v Elliot

The primary claim - alleged misapplication of trust funds

1. The primary claim relates to what are said to have been trust moneys forming part of the assets of the Sayour Family Trust. That claim (which is for an amount of around $5 million) is pleaded in the amended statement of claim in alternative ways.
2. First, the plaintiffs allege (at [7]-[50]) that the deceased caused moneys (totalling some $5,003,080) to be deposited on or about 6 January 2015 into a Westpac bank account held in the names of the deceased and Moustafa Sayour "as Trustee for Sayour Family Trust" (at [11]). The plaintiffs say that those are trust moneys; that they were withdrawn by the deceased from that account without authorisation; and that they can be traced into accounts held in the deceased's name in the Bank of Sydney. Reliance is placed on Ex parte Kingston; re Gross (1871) LR 6 Ch App 632 for the proposition that, by naming accounts as trust accounts for the Sayour Family Trust and by depositing funds into the accounts so named, the deceased declared the funds to be trust funds.
3. The alternative way in which the primary claim is pleaded ([51]-[107]) is to trace the funds that were deposited into the Westpac bank account in January 2015 further back into other accounts, by reference to which it is again alleged that the moneys withdrawn by Jamil (without authorisation) were trust moneys. The original source of the relevant funds is identified as being cheques drawn in favour of the Sayour Family Trust on the partnership account between Broadway Plaza, as trustee for the Sayour Family Trust, and BPI. (The plaintiffs say that copies of these cheques have already been provided to the first defendant as part of the accountant's report produced in the probate proceedings and that the first defendant has therefore had this information since 2 September 2016.) It is said that this (alternative) basis on which the misappropriation claim is put provides the strongest grounds for concluding that the deceased was acting without authority and for dishonest gain (reference being made in this context again to Alesco Corporation at [58]-[60]).

The secondary claim - alleged receipt of secret commissions

1. The second, and distinct, claim (not related to the payments referred to at [16]-[17] above) relates to amounts alleged to have been received by the deceased as secret commissions out of Broadway Plaza's share of proceeds of sale of residential units forming part of the Broadway development (see [199]-[217] of the amended statement of claim). The plaintiffs claim that, prior to his death, the deceased assisted in the management of the affairs of a partnership between Broadway Plaza and BPI (a company associated with a Mr Fouad Deiri). It is alleged that the deceased acted in collusion with Mr Deiri in relation to the management of the affairs of the partnership; that the deceased acted in breach of fiduciary duties owed by him to Broadway Plaza (namely, breaches of what are referred to colloquially as the "no profit" rule and the "no conflict" rule) and in breach of an equitable duty faithfully and loyally to serve the second plaintiff as its agent; and that the deceased's estate is accordingly liable to Broadway Plaza for equitable compensation for losses caused by his breach(es) of duty. The payments the subject of the secret commissions claim were made at a time much earlier than the payments the subject of the primary claim. The plaintiffs say that they have not been able to trace those funds into any extant accounts in the deceased's name; hence the claim in respect of those moneys is brought as an unsecured claim.
2. The plaintiffs say that the quantification of the losses suffered by Broadway Plaza by reason of the deceased's breach(es) of duty cannot finally be quantified until after the taking of partnership accounts between Broadway Plaza and BPI (the taking of such accounts being one of the issues in a third set of proceedings, between Broadway Plaza and BPI, to which the first defendant is not a party). The plaintiffs say this on the basis that Broadway Plaza may recover some or all of its losses by succeeding on surcharges and/or falsifications in the process of the taking of those partnership accounts. However, the plaintiffs maintain that no such difficulty arises in relation to the primary claim (and their position is that the first defendant should be required without further delay to inform the Court what the estate's answer is to that claim). They say that they do not need to press the "back up claims" (i.e., those relating to the secret commissions) if the primary claims are accepted (see T 27.46), since those claims would exhaust the estate's funds.

The relief claimed

1. The relief claimed in the present proceedings encompasses: declaratory relief (including declarations to the effect that the estate of the deceased is insolvent; that the sum of $5 million deposited by the deceased into an identified Bank of Sydney account in February 2015 was money that was held on trust for Broadway Plaza as trustee of the Sayour Family Trust and that the moneys standing in the name of the deceased in particular accounts is held on trust for Broadway Plaza); orders for an enquiry to determine into what account or assets the $5 million was converted or applied; equitable compensation; and damages and/or a judgment for Broadway Plaza in the sum of $5,003,080 against the estate of the deceased (prayers [1]-[8] of the amended statement of claim). Further orders for judgment in favour of Broadway Plaza in other lesser amounts are also sought, as well as other declaratory relief and a further enquiry as to the accounts or assets into which those other moneys were converted or applied (see prayers [9]-[20]).
2. Similar relief is sought in favour of Fatimah Sayour in respect of funds of $710,000 said to have been transferred by the deceased on 2 and 10 September 2013 from and to accounts held at the Bank of Sydney (prayers [21]-[25]).
3. An enquiry is also sought to determine the source of funds "used to cover payments by the deceased" in connection with the acquisition of certain land at Rockdale and Arncliffe (prayers 26-27).
4. Finally, there are general claims for equitable compensation (prayer [28]) and "damages for conversion" (prayer [29]), as well as claims for interest (on various bases), costs and interest on costs (prayers [30]-[33]).
5. With that broad background in mind, I turn to the respective applications.

Request for particulars

1. As noted, on 12 December 2016, Lindsay J made directions for the service of any request by the first defendant for particulars by 31 January 2017. The amended statement of claim was filed (in accordance with the directions made by his Honour) on 21 December 2016. However, the request for particulars was not served until 24 February 2017 (i.e., some 3-4 weeks late). That request was 15 pages long and posed 51 questions, many of which had sub-questions embodied within them.
2. Notwithstanding service (albeit late) of a lengthy request for particulars (which, from the very fact that it was served, would ordinarily lead one to infer that an answer to the request was sought), the response from the plaintiffs' solicitors to that request was to rely upon the lateness of its service as the premise for the assertion that "we are entitled to assume consideration of an answer to your request is not necessary and you should prepare your clients [sic] defence". (I interpose to observe that it is by no means clear that such an assumption flows logically from the stated premise.) They also asserted that the matters requested were neither necessary nor proper requests for particulars.

The submissions

1. The first defendant maintains that the request for particulars is warranted in circumstances where the amended statement of claim: is lengthy; contains allegations in relation to business affairs of the plaintiffs and the deceased, going back to 2011, in which it is said she had no involvement; and refers to a third set of proceedings (those to which I have referred above), to which the first defendant is not a party (2016/00282940). That third set of proceedings is referred to in the affidavit sworn by Moustafa Sayour on 5 April 2017 in connection with the present applications at [6].
2. In submissions made on behalf of the first defendant (and in her solicitor's affidavit sworn 17 March 2017 filed in support of her interlocutory applications at [7]) it is asserted that she has no personal knowledge of most of the material in the amended statement of claim.
3. Complaint is made by the plaintiffs that the first defendant has not filed any affidavit in the present proceedings deposing to the asserted lack of knowledge, nor of the facts and circumstances giving rise to her need for further particulars of the claims made against the estate. It was in that context that the first defendant proceeded to tender para [9] from the affidavit affirmed 29 July 2016 and filed by the first defendant in the probate proceedings, in which she deposed that she was not aware of any basis to the caveator's claim that he and two other companies were owed moneys by Jamil.
4. The first defendant accepts it is unusual in this Court for particulars to be ordered to be provided but submits that the request for particulars is justified to enable her to obtain information in circumstances where it may be necessary for her to seek judicial advice before filing a defence. In the absence of such information it is submitted that any defence will be of very little utility and may simply plead a lack of knowledge and put the plaintiffs to proof of their claims (see T 16.43-49).
5. The plaintiffs, on the other hand, characterise the request made by the first defendant as prevarication on her part. They maintain that, prima facie, a request of the length of the request for particulars that was served by the first defendant in February 2017 is unlikely to be necessary and therefore that it is vexatious. They assert that the request made by the first defendant "is properly to be seen as a tactic to delay and increase costs, in the hope that the plaintiffs will be embarrassed by the delay and cost into making unwarranted financial concessions in favour of the first defendant".
6. Pausing there, sweeping statements have been made by both sides in their submissions on the present applications: from accusations against the legal representatives of the first defendant of "prima facie over-servicing" and the assertion that the proceedings are being defended by the first defendant on a "scorched earth" policy, on the one hand, to the description of the plaintiffs' conduct as the pursuit of a strategy of "total litigation" on the other. Such statements are, to say the least, unhelpful. Whatever the acrimony between the parties (and the proceedings are clearly emotionally charged on both sides, with accusations by the parents of stealing and betrayal by their late son and complaints by the first defendant as to their treatment of her and her children after Jamil's death, including that the family has denied the validity of a marriage ceremony that it is said they witnessed), litigation in this Court should be conducted (and both inter-parte correspondence and submissions would more helpfully be couched) in a balanced and objective way, adhering to the principles mandated by ss 56-59 of the Civil Procedure Act 2005 (NSW).
7. Turning to the request for particulars as initially served, both sides' legal Counsel deprecated the need for them (or for the Court) to endure the tedium of going through the request in detail. Attractive as such a course might be, that is not an appropriate course in the face of the opposing stances taken by the parties as to the need for the particulars. In those circumstances what would have been of more assistance than general complaints and broad accusations would have been a focussed explanation as to the need or otherwise of the particulars requested.
8. Moreover, to the extent that the plaintiffs were able to provide answers to at least some of the questions the subject of the request for particulars in their written submissions on the present applications, this suggests that, had they chosen to respond to the requests (or some of them) in the first place, rather than to reject out of hand the need for a response by reference to the request being some 3-4 weeks out of time, the ambit of the present dispute might have been much narrower if not avoided altogether. (Of course, whether that would have been the case would also have depended on co-operation by the first defendant and subsequent events suggest that this might have been a forlorn hope.) In any event, the response by the plaintiffs to my suggestion that such a course might have been adopted was, in effect, that it was considered that "the line had to be drawn somewhere" and that any attempt at so doing would simply have presaged further disputation. I accept that there is some force to the latter observation since even the now reduced request for particulars is relatively lengthy and has still been met by resistance to the provision of the requested particulars.
9. As it was, the first defendant had indicated prior to the hearing of the applications that she did not press certain of the initial request for particulars (though it seems she has since reinstated some of those withdrawn requests). Having extracted in the course of the oral submissions certain answers from the plaintiffs' Counsel as to how their claim is articulated (which I summarise below and to which I indicated that the plaintiffs should be held at the ultimate hearing of the matter), I directed the first defendant to prepare a revised (and more focussed) request for particulars. This she has done, with the result that the request is now almost halved in length to seven pages (albeit, as the plaintiffs point out, still containing some 39 questions).
10. Complaint is again made by the plaintiffs to the revised request for particulars. They maintain that to respond in detail to each of the revised requests would be an "unjustifiably lengthy exercise", choosing instead to respond to the revised request by way of examples as to why the requests made: must be the subject of evidence by the plaintiffs; are said not to be proper requests; are matters of comment; or seek information which it is said does not directly arise; or extends to matters of background information; or "cannot be seriously the matter of any dispute" (see [5] of the submissions in reply dated 10 May 2017).

Matters already the subject of clarification

1. Before turning to the applicable principles when considering the revised request, I note the following matters that I consider were sufficiently clarified in the course of oral argument on 26 April 2017 such that the provision of any further particulars at this stage in relation to those matters is not required.
2. First, the request made at para 4 of the initial request for particulars sought clarification as to what was meant by the pleading, in various paragraphs of the amended statement of claim, that the deceased had wrongfully "converted" amounts which were Sayour Family Trust money. The letter stated that it was assumed that the pleader was not intending to plead either "conversion in equity" or conversion of a chose in action (including money in a bank account).
3. The response, in the written submissions served by the plaintiffs, was that this request was argumentative and that it "condescends to an unwarranted suggestion of ignorance on the part of the pleader" but that in any event the pleading plainly stated that "what was converted by these unauthorised withdrawals of money was money of the Sayour Family Trust". Reference was made to the passage set out at [22-28] of Jacobs' Law of Trusts (8th ed, 2016, LexisNexis), s 47 of the Limitations Act 1969 (NSW), and Re Sharp [1906] 1 Ch 793.
4. Confusion on the part of the first defendant as to what was intended by the pleading that the deceased had wrongfully "converted" moneys to his own use is not altogether surprising, given the general claim for damages in conversion in the prayers for relief. In any event, in oral argument Counsel for the plaintiffs confirmed, in effect, that the reference to conversion was not to the tort of conversion (nor to any claim for "conversion in equity") but, rather, that what is alleged is that the deceased was in breach of fiduciary duty in having taken "trust money" (namely, money held in a bank account designated with the title "as trustee of …") without authorisation and using it for his own purposes (see T 12.38-13.8). The verb "converted" is therefore not being used in the technical sense of conversion at common law, nor was a reference to the equitable doctrine of conversion apparently intended (as to which, see Jacobs' at [26-01]).
5. Second, insofar as the original request sought particulars of the facts relied upon for the assertion that any particular account that was opened was a trust account (see the requests at paragraphs 1-2), what became clear in oral argument is that (at least for the first way in which the primary claim is put) the plaintiffs rely on no more than the fact that when the account in question was opened it was designated or styled as an account in the relevant name(s) "as trustee for"; and hence that there was a declaration or acknowledgment (by reference to the designation of the account) that the account was a trust account and that moneys deposited in that account were trust money (see T 17.46-18.1). The plaintiffs qualified this by saying that where additional matters are pleaded (referring to [51]-[107] of the amended statement of claim) beyond the fact of the designation of the account as a trust account, then the allegation is not so limited but they assert that in relation to those allegations the additional matters for the allegation are there pleaded.
6. Third, there was clarification of some linguistic confusion arising from the fact that at various parts of the amended statement of claim (see for example the particular at [199.4]) there is an allegation that the deceased "assumed" to do certain things (such as "assumed to take part in these negotiations on behalf of the second plaintiff"). That was subject of an unanswered request for particulars. In the course of the hearing of the present applications the plaintiffs clarified that this expression, wherever used, could be taken to mean that the deceased took it upon himself to do those things (T 31.15).

Principles

1. It is convenient at this point to summarise the relevant principles relating to the provision of particulars.
2. The function of particulars is well known, as is the distinction between material facts and particulars (see Bruce v Odhams Press Limited [1936] 1 KB 697 at 712-713 (Scott LJ); Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72 at 75-76 (Scott LJ)). In Rubenstein v Truth and Sportsman Limited [1960] VR 473, Adam J referred (at 476) to that distinction and repeated the statement of Scott LJ in Odhams Press that particulars cannot cure a "bad" statement of claim. (See also what was said by Gleeson CJ in Goldsmith v Sandilands (2002) 190 ALR 370; [2002] HCA 31 at [2].)
3. The plaintiffs note that under the Uniform Civil Procedure Rules 2005 (NSW) particulars must be "necessary" (UCPR r 15.1). They point out that the party seeking particulars must demonstrate that they are justified (see Philliponi v Leithead (1959) 59 SR (NSW) 352; Bailey v Commissioner of Taxation (1977) 136 CLR 214 at 227 (Aitken J)) and that it is not necessary that particulars be detailed as to matters of background or context, nor will a high degree of specificity necessarily be warranted even in respect of central allegations (referring to Fregnan v Stanzo (2016) 92 NSWLR 318; [2016] NSWCA 264).
4. However, it must also be noted, as was pointed out recently by the Court of Appeal (Nadinic v Drinkwater [2017] NSWCA 114 at [45]-[46] (Leeming JA, with whom Beazley P and Sackville AJA agreed at [1] and [152]-[156], respectively), that allegations of fraud must be pleaded specifically and with particularity. In Nadinic, Leeming JA quoted a passage from the judgment of French CJ, Gummow, Hayne and Kiefel JJ in Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [25]-[26], including their Honours' emphasis that the requirement for particularity in pleading fraud "is no pleader's quibble" and that this requirement reflects fundamental requirements for the fair trial of allegations of contravention of law.

Plaintiffs' submissions

1. The plaintiffs maintain that the pleading is itself quite detailed and that the first defendant has had the benefit of the evidence filed in the probate proceedings, as well as material produced under directions made by Lindsay J, including electronic copies of material from the partnership proceedings referred to above (as well as the production of documents by the plaintiffs in answer to her notice to produce dated 23 February 2017, to which I refer in due course). They contend that the first defendant has not established that it is "necessary" for the requested particulars to be provided, particularly where she has sworn no affidavit as to her lack of knowledge of the matters the subject of the allegations in the statement of claim.
2. The plaintiffs also point out that the bulk of the particulars requested relates to the pleading of the secondary (or "back-up") claims in relation to the alleged secret commissions. They argue that, as administratrix, the first defendant should not delay in providing her answer to the primary claim. They submit that the duty of the first defendant as administratrix and, in that capacity, as constructive trustee of the "stolen trust money" (the latter assertion presupposing the ultimate conclusion in the proceedings) is to exercise reasonable business prudence. They argue that this duty, as well as the first defendant's obligations under s 56 of the Civil Procedure Act, requires the first defendant to concentrate first on the principal claims that might exhaust the extant funds rather than spending time and controlled trust money, "or even estate money", on extensive investigation of the "subsidiary" unsecured claims.

Determination

1. In the present case, the plaintiffs make very serious allegations of misappropriation of trust funds as well as allegations tantamount to fraud in relation to the receipt of secret commissions. Whether or not the secret commission allegations are subsidiary or "back-up" claims, in the sense that the estate will be exhausted if the primary claim is established and hence any liability for the other claims may in a practical sense prove to be moot, the fact remains that the plaintiffs have chosen to make very serious allegations as to the conduct of the deceased and there is no allegation on the face of the pleading as to knowledge by the first defendant of the matters the subject of the allegations made against the deceased. The administratrix of his estate is entitled to know precisely what is alleged in relation to the deceased's conduct.
2. In those circumstances, and notwithstanding that the only evidence directly from her on the present applications came in the form of the paragraph tendered from an affidavit filed in the probate proceedings, the first defendant's request for particulars should be viewed with some sympathy (not, I stress, for the personal circumstances in which she and her children are now left, however difficult they may well be; rather, for the fact that she is being called upon to respond, in her capacity as administratrix of the deceased's estate, to such serious allegations and yet there is nothing to point to her having any personal knowledge as to the detail of the conduct on which those allegations are based).
3. In the plaintiffs' submissions, reference was made to suspicions held by the plaintiffs that the first defendant knows much more than the Court is being told. It is submitted that there is evidence (referring to the affidavits of Mr Ti and Moustafa Sayour) demonstrating that there is reason to think that the first defendant "is acting in concert with Mr Deiri". Reference is made to the first defendant's evidence in the probate proceedings in which she disclosed that she has received substantial sums from Mr Deiri. It is said that she could have made enquiries of Mr Deiri in relation to the matter and it is noted that she has put on no evidence as to what she may or may not have learnt from him. However, as referred to above, on the pleadings there is no assertion of collusion (or knowledge of the deceased's conduct) on the part of the first defendant. The content of, or any explanation for, dealings between the first defendant and Mr Deiri or payments made by the latter to the first defendant after the deceased's death are matters that would have to be explored, if relevant to any particular issue, at the hearing of the proceedings. Moreover, it is not for the first defendant to interrogate third parties (or trawl through affidavit or other material in separate albeit related proceedings) in order to ascertain precisely what is here being alleged by the plaintiffs as to the past conduct of the deceased. A defendant, let alone a defendant sued in the capacity in which the first defendant is here sued, should not be called upon to speculate as to what is being alleged against it.
4. Accordingly, I am of the view that it has been established that the provision of particulars relating to the issue of the alleged fraudulent conduct is necessary in the sense required by the rules in relation to the provision of particulars. That said, as I trust I made clear in the course of the hearing, that does not mean that the first defendant can embark with impunity on a "kitchen sink" type approach to the content of the request for particulars. They must be shown to be necessary in order for her to understand and plead to the claim made by the estate.

Revised request for particulars

1. I turn then to the revised request for particulars. The plaintiffs point out that this request reinstates some of the requests that had been expressly withdrawn prior to the hearing before me - namely the requests now made at paragraphs 3, 5 and 6 - and retains some of the requests dealt with at the hearing on 26 April 2017 (namely those appearing at paragraphs 1 and 2). Unfortunately, it remains necessary to consider the revised request for particulars in some detail.
2. Paragraph 1 of the revised request (referring to [15], [52] and [121] of the amended statement of claim) seeks particulars as to the plea that the deceased opened the relevant accounts "claiming" to act in his name or in his name and that of Moustafa Sayour. As the plaintiffs have pointed out, this was in substance dealt with during oral debate on the last occasion. The plaintiffs rely on the fact that the accounts were opened by the deceased and were styled as they were. No further particulars are necessary. If, for some reason, a copy of the formal or written application for the opening of a particular bank account is necessary, presumably that can be obtained by subpoena to the bank or a notice to produce identifying with precision the document sought.
3. Paragraph 2 of the revised request (referring to [22], [48], [50], [75], [82], [90], [101], [139], [144], [148], [163], [172], [173], [197], and [213] of the amended statement of claim) asks, in relation to the allegation of transfers from one bank account to another, "what is being alleged as converted"? This was answered on the last occasion (see [39] above). No further particulars are necessary.
4. Paragraph 3 of the revised request (referring to [29] and [31] of the amended statement of claim), seeks the identification of certain bank accounts to which reference is there made. The plaintiffs have now identified the account numbers in their submissions in reply (albeit asserting that the information was already contained elsewhere in the pleading). No further particulars are necessary.
5. Paragraph 4 of the revised request (which does not in terms refer to any particular paragraph of the amended statement of claim but presumably relates to the allegations in respect of a bank account referred to in the pleading as the CBA Partnership Account - see [55]), seeks details as to the "partnership". The pleading does not here allege the existence of a partnership as such. It refers to the title of the designated account. In any event, the plaintiffs' submissions on the present application make clear that what is referred to is the alleged partnership between Broadway Plaza and BPI the subject of the third set of proceedings to which I have referred. As to who it was that drew the relevant cheque, if that be necessary to determine it can be the subject of a subpoena or a notice to produce a copy of the relevant cheque. The relevance of this is not immediately apparent. No further particulars are necessary.
6. Paragraphs 5 and 6 of the revised request (referring to [57] and [63], respectively, of the amended statement of claim) seek information as to who deposited a particular cheque. The relevance of who deposited the cheque into a particular bank account is not immediately apparent. This was a request withdrawn prior to the hearing on 26 April 2017 but now, without explanation, reinstated. No further particulars are necessary.
7. Paragraph 7 of the revised request (referring to [93] and [99] of the amended statement of claim) seeks particulars of the allegation that the deceased obtained and held a cheque ([93]), and deposited that cheque in breach of his duty ([99]), as agent for Broadway Plaza. In my opinion this request should be answered. Insofar as the complaint made against the estate is that he acted in breach of his duty as agent or contrary to the interests of his principal, the facts, matters and circumstances on which the plaintiffs rely for the allegation of agency should be made clear. If (as may be the case) all the plaintiffs rely upon is that the deceased had possession of the cheque, then they should at least make that clear.
8. Paragraph 8 of the revised request (referring to [109] of the amended statement of claim) seeks particulars of the representation there alleged to have been made by the deceased to Moustafa Sayour. The plaintiffs say that this has been deposed to by Moustafa Sayour in an affidavit filed in the probate proceedings. Again, the first defendant should not be expected, in my opinion, to trawl through affidavits served in other (even though related) proceedings in order to divine the detail of the representation alleged to have been made (see, albeit in a different context, Watiwat v Dixon [2017] NSWSC 360; Collier v Country Women's Association of New South Wales [2016] NSWSC 1361; Collier v Country Women's Association of New South Wales [2017] NSWCA 22). This request for particulars was in my opinion a proper request. However, it has now (in the submissions in reply to the revised request) been answered sufficiently by reference to identified parts of Moustafa Sayour's affidavit. No further particulars are necessary.
9. Paragraph 9 of the revised request (referring to [116] and [117] of the amended statement of claim) seeks particulars of the allegation that a particular company (Moulikyah Pty Ltd) was not involved in any aspect of the business activities of the first and second plaintiff, namely in respect of what period the allegation is made and what were the business activities of the first and second plaintiffs in that period. The complaint made by the plaintiffs is that this asks for particulars of statements of a negative character. It does not. It asks for the time period in question and the nature of the business activities to which reference is there made. Those are matters which must peculiarly be within the knowledge of the respective first and second plaintiffs. Those particulars should be provided.
10. Paragraph 10 of the revised request (referring to [132] of the amended statement of claim) seeks particulars as to the allegation that the deceased forged the signature of Moustafa Sayour. The plaintiffs refer to the preceding allegations at [130]-[131]; and the following allegations as to how the deceased obtained and dealt with the cheque. As I read it, they should be taken as having answered this request in effect as relying, for the allegation that the deceased forged the signature, solely on the fact that Moustafa Sayour denies placing his signature on the document; that it should be concluded that the signature therefore is a forgery; and that the cheque was obtained by the deceased from Mr Deiri and BPI and subsequently deposited by him into the said bank accounts. On that basis, no further particulars are necessary.
11. Paragraph 11 of the revised request (referring to [135], [159] and [193] of the amended statement of claim) seeks particulars as to the existence of the partnership there referred to (if different from the partnership referred to at [4]). The plaintiffs complain that this (and the requests at paragraphs 12, and 31(b)) are "an unnecessary distraction" and assert that the first defendant "cannot be serious" in asking these questions. That diatribe is itself an unnecessary distraction in circumstances where the submissions in reply identify the partnership in question (as the partnership between Broadway Plaza and BPI, which it is said has now been wound up by order of the Court and is the subject of the dispute as to the taking of partnership accounts. It is asserted that the first defendant "has already had access to thousands of pages of served documents in that partnership dispute". If the assertion is that the first defendant already has a copy of the relevant partnership agreement then it would have been a simple matter for that to be stated; and that should now be made clear. Once that is done no further particulars are necessary in answer to this request.
12. Paragraph 12 of the revised request (referring to the previously mentioned paragraphs of the amended statement of claim and the assertion that particular cheques were obtained "on the basis that it was a partnership distribution to the second plaintiff") the plaintiffs seek particulars of the facts, matters and circumstances for the allegation that the cheque in each case was obtained on that basis. The complaint made by the plaintiffs (see above) does not adequately respond to this request. It is by no means apparent from the pleading how it is said that the deceased obtained the cheques on the stated basis. It should not be for the first defendant to have to trawl through thousands of pages of documents to attempt to discern on what facts the plaintiffs rely for this allegation. This request for particulars should be answered.
13. Paragraph 13 of the revised request (referring to [141] of the amended statement of claim) seeks confirmation that the withdrawal in question was from a particular bank account (that being the account stated in the heading to this section of the pleading) and for identification of the account(s) to which the said sum was transferred, the manner of transfer, and if it occurred by way of two or more transfers the amount of each transfer. As to the first of those matters, it might be inferred from the heading but in any event it can hardly be oppressive for the plaintiffs simply to clarify this. As to the balance of the request, there is some confusion in the pleading insofar as it is said that the amount was transferred "to an accounts …". It is not suggested by the plaintiffs that this information would not easily be able to be provided. This request should be answered.
14. Paragraph 14 of the revised request (referring to [146], [147] and [148] of the amended statement of claim) seeks clarification as to whether it is there intended to refer to more than one withdrawal and, if so, particulars are sought of each withdrawal. Again this request seems to be precipitated by the reference to "the withdrawal" in the particulars to [146] but to "these withdrawals" and the "said withdrawals" in [147] and [148]. That should be able to be easily clarified. This request should be answered.
15. Paragraph 15 of the revised request (referring to [173] of the amended statement of claim) seeks particulars of the recipient and bank or other account of the recipient of an amount referred to as "the said further withdrawal". In circumstances where the allegation is that the deceased converted this amount to his own use, the allegation must either be that he transferred it to a particular account or that he otherwise used it. This should be made clear.
16. Paragraph 16 of the revised request (referring to [179] of the amended statement of claim) requests, not unreasonably, clarification as to whether the withdrawals to which reference is there made should in fact be a single referral (as appears to be the case by reference to [175] and the particulars thereto). Again, it is not unreasonable for the first defendant to seek information as to whether the cheque was presented and, if so, to what bank or institution, particularly since later there is an allegation apparently predicated on there having been a payment made to "Combined Projects Arncliffe" (see [188]). This request should be answered.
17. Paragraph 17 of the revised request (referring to [180] of the amended statement of claim) seeks particulars as to the allegation that Sayour Holdings Pty Ltd (the second defendant) holds its shares in Combined Projects (Arncliffe) Pty Ltd as trustee for the Sayour 2 Family Trust. The relevance of this alleged trust relationship is not immediately apparent. The allegation at this part of the pleading appears to be that the second defendant holds its interest as shareholder in the said company on trust for Broadway Plaza or otherwise that Broadway Plaza is entitled to compensation from the estate of the deceased for the relevant withdrawal if it does not recover the $1.75 million from the second defendant (a company controlled by Moustafa Sayour). Given the confusing nature of the pleading in this respect, this request should be answered.
18. Paragraph 18 of the revised request (referring to [181] of the amended statement of claim) seeks particulars of the allegation that Combined Projects (Arncliffe) Pty Ltd was formed for the purpose alleged (of acquisition and development of a property at Arncliffe). It is not immediately apparent that the purpose for which the company was allegedly formed has any relevance to the claim pleaded against the estate of the deceased in relation to the payment of the moneys in question to it. If the plaintiffs do not rely on the said "purpose", and confirm this, then no further particulars are necessary. Otherwise the particulars should be provided.
19. Paragraph 19 of the revised request (referring to [186] of the amended statement of claim) seeks particulars of the office in which it is alleged the deceased was acting in making the payment there alleged. That is understandable given that the allegation is that he was acting "inter alia" as an officer of the second defendant. This should be clarified, as should the basis on which it is alleged that the deceased was an officer of the relevant entity.
20. Paragraph 20 of the revised request (referring to [187] of the amended statement of claim) seeks particulars of the alleged acquisition by the second defendant of the "interest" as creditor or shareholder in Combined Projects (Arncliffe) Pty Ltd to which reference is there made. Given that the allegation is that the second defendant did not contribute any of its own money to the acquisition and that this appears to be part of the basis on which it is alleged that the second defendant holds its interest in the company on trust for Broadway Plaza, this is not an unreasonable request for particulars and should be answered.
21. Paragraph 21 of the revised request (referring to [189] of the amended statement of claim) seeks particulars of the assertion that Broadway Plaza is entitled to compensation from the estate of the deceased in the event there described. This request could in my opinion be met by identification of those parts of the pleading relied upon (and a simple articulation of the legal basis on which it is asserted that there is such an entitlement). This request should be answered.
22. Paragraph 22 of the revised request (referring to [198D], [198F] of the amended statement of claim) calls for the production of any document recording the appointment and transfer referred to in those paragraphs. This is not suggested to be oppressive in any way. This request should be answered.
23. Paragraph 23 of the revised request (referring to [199], [200] and [201] of the amended statement of claim) seeks particulars of the allegations that the deceased acted as agent for Broadway Plaza (to the extent that this differs from the facts sought in answer to paragraph 7). For the same reason as given earlier (in respect of paragraph 7 of the revised request) this request should be answered.
24. Paragraph 24 of the revised request (referring to [199] of the amended statement of claim) asserts that the paragraph is in improper form and ought to be pleaded as material facts. Complaint is made by the plaintiffs that this is not a request for particulars but mere comment. In fact, it is a request for a proper pleading. I, too, am of the view that the material facts on which the plaintiffs rely for the allegation that the deceased acted as agent of the deceased ought to have been pleaded. However, this is not a strike-out application. I accept that there is no obligation to plead to particulars (see for example what was said by Pennycuick J in Chapple v Electrical Trades Union [1961] 3 All ER 612 at 614). Therefore, if the plaintiffs choose so to plead then they may well be met with a broad denial or non-admission (if the first defendant does not have the requisite knowledge of the pleaded matter) about which they can hardly complain. That said I do not propose to direct the plaintiffs to re-plead [199].
25. Paragraph 25 of the revised request (referring to [203] of the amended statement of claim) seeks particulars of the manner in which the nine deposits alleged at [203] were made and by whom each was made. The plaintiffs maintain that this is a matter for evidence in circumstances where it is not likely that the evidence will be available except by way of inference. They point to the allegation that the deposits were made at the direction of Mr Deiri and argue that the precise mechanism by which the deposits were made is unlikely to be relevant. The particulars state among other things that the deposits are recorded on the relevant bank statement. I am not persuaded that this is a proper request for particulars for the reasons given by the plaintiffs. This request need not be answered.
26. Paragraph 26 of the revised request (referring to [204] of the amended statement of claim) seeks particulars of the allegation that a particular account was an "unauthorised account" being maintained as a trust account for the Sayour Family Trust. The plaintiffs argue that this is seeking particulars of a negative and point to the allegations at [119]-[123] which they say provide the information as to why it was unauthorised and how it was designated as a trust account. This again is a matter that was broadly dealt with on the last occasion, in that the allegation that it was a trust account is based solely on the fact that it was opened with that designation. The submissions made in reply to this request adequately answer the request - the allegation is that the account was opened without the knowledge or authority of Moustafa Sayour or Broadway Plaza; and by inference at least the plaintiffs maintain that the source of necessary authorisation for a Sayour Family Trust account must be the trustee (Broadway Plaza). In those circumstances, no further particulars are necessary.
27. Paragraph 27 of the revised request (referring to [205], [208] and [212] of the amended statement of claim) seek particulars of the assertion that the funds there referred to became impressed with a trust in favour of Broadway Plaza. As I understand the plaintiffs' position from the debate on the last occasion, the allegation is that the fact that the payments were deposited into a bank account styled a trust account amounted to a declaration or acknowledgement that the funds so deposited were trust funds. If my understanding be correct, then no further particulars are necessary.
28. Paragraph 28 of the revised request (referring to [206] of the amended statement of claim), seeks particulars of the alleged direction by the deceased that Mr Dieri pay a certain amount to an account in the deceased's name held with the Bank of Beirut. Given that this direction is one of the matters relied upon for the allegation of fraudulent conduct on the part of the deceased, full particulars should be given in answer to this request.
29. Paragraph 29 of the revised request (referring to [207] of the amended statement of claim) seeks particulars of the account in question and the manner in which the amount was paid into that account. How the money was transferred would, I accept, be a matter for evidence. However, the identification of the account should be provided. I would allow the request at paragraph 29(a).
30. Paragraph 30 of the revised request (referring to [210] of the amended statement of claim) seeks particulars of the allegation that a particular deposit was made "at the request" of Mr Deiri. Those particulars should be provided. If it is said that the request is a matter of inference then that can be said and the facts from which the inference is to be drawn should be provided.
31. Paragraph 31 of the revised request (referring to [211] of the amended statement of claim) seeks particulars as to the allegation that a deposit was made on behalf of BPI (at (a)) and as to the partnership to which reference is there made (at (b)). As to (a), the request should be answered. As to (b), this should be dealt with in the same way as the requests at paragraphs 11 and 12.
32. Paragraph 32 of the revised request (referring to [215] of the amended statement of claim) seeks particulars of the allegation that the deceased was "influenced to act" and did act as agent of the persons or entities to which reference is there made. A series of particulars follows, seemingly of the allegation of breach of duty. If the allegation is that particular individuals or entities influenced the deceased to act in a particular manner (the relevance of which is not immediately apparent to the claim against the deceased based on the fact that he did so act), then particulars should be provided of the facts on which the plaintiffs rely for the allegation that he was so influenced. As to the allegation that he acted as agent for the named person/entities, this request for particulars should be answered (and the unnamed "other entities" should be identified). If all that the plaintiffs are relying on is that particular action was taken and that such action might be said to be in the interests of, or to favour, the relevant person/entities, then that should be a simple matter to clarify. If something further is relied upon for the allegation of agency then proper particulars should be provided of it. Serious allegations of fraud have been pleaded. They should not be made lightly and, as previously noted, they must be properly particularised.
33. Paragraph 33 of the revised request (referring to [215] of the amended statement of claim) again is a complaint as to the form of the pleading. The particulars to this paragraph of the pleading clearly go beyond the receipt of the payments referred to in the opening words of the paragraph (for example, making allegations as to non-disclosure of information to the second plaintiff and of payments to third parties without proper verification and scrutiny; or for which it is alleged the second plaintiff was not liable). Those allegations should undoubtedly have been the subject of a proper pleading of the material facts alleged; rather than simply being included as particulars of an allegation that is tied to the secret commissions. If the allegation at [215] is to be pressed beyond the complaint as to the receipt of the alleged secret commissions, then the first defendant is entitled to know what case is being put as to the allegations there made. Therefore, notwithstanding the comment I made above in relation to [199], I consider that, unless the plaintiffs choose to amend their pleading in relation to the matters particularised at [215.1] -[215.10], they should provide particulars of the facts matters and circumstances on which they rely for the assertions contained therein.
34. Paragraph 34 of the revised request (referring to [218] and [219] of the amended statement of claim) seeks particulars of the allegation that the bank account referred to at [218] was formed for the purpose alleged at [219]. The alleged purpose is said to have been agreed between the deceased and his mother. She should therefore be in a position readily to provide the information requested. There is nothing to suggest that the first defendant was privy to any such agreement. This request should be answered.
35. Paragraph 35 of the revised request (referring to [221] and [222] of the amended statement of claim) seek clarification as to whether the list of payments particularised at [221] is an exhaustive list. That would be my reading of the particulars but there can hardly be any difficulty for the plaintiffs to confirm whether this is so. This request should be answered.
36. Paragraph 36 of the revised request (referring to [230] of the amended statement of claim) simply asks for confirmation as to the relevant figure, having regard to the different figure stated at [228]. This is a prime example of a request for particulars that should have been answered promptly and without complaint. This request should be answered.
37. Paragraph 37 of the revised request (mistakenly referring to [224] but presumably intending to refer to [223] of the amended statement of claim) seeks particulars of each of the "furnishings" said to have been taken and converted by the first defendant to her own use. If an allegation of tortious conversion of property is to be maintained, it would be incumbent on the plaintiffs to identify the said property. That said, it is not apparent that there is any claim against the first defendant in her personal capacity for conversion or otherwise, which leads me to query whether this paragraph should remain in the pleading at all. However, if it does remain then this request should be answered.
38. Paragraph 38 of the revised request (referring to [231] of the amended statement of claim) seeks confirmation that the list of payments there particularised is an exhaustive list. I make the same comment as that in relation to the request made at paragraph 35. As to the question whether any complaint is made against the estate of the deceased for those payments, that is a not unreasonable request and should be answered.
39. Finally, paragraph 39 of the revised request (apparently referring to [252]-[256] of the amended statement of claim) seeks confirmation as to the date of the contract to purchase the Rockdale property to which reference is there made. Reference to a contract of sale is made in the particulars to [253]. There is nothing to suggest that it would be in the slightest bit difficult for the plaintiffs to provide that information. This request should be answered.
40. The plaintiffs will be ordered to provide an answer to the request for particulars as indicated and with the qualifications noted above.

The "emails notice to produce"

1. The second part of the first defendant's notice of motion of 17 March 2017 and the corresponding application by the plaintiffs by notice of motion filed 5 April 2017 relate to the first defendant's notice to produce served on the plaintiffs' solicitor on 22 December 2016, though addressed to Ms Yesmine Sayour. This called for production (apparently by Ms Yesmine Sayour) of the following: 1. All emails records of emails currently in all email boxes, including draft, junk, inbox, deleted or sent, for [an identified email account of the deceased at Biomed Technology Australia], as referred to in paragraphs 26-28 in the Affidavit of Yesmine Sayour sworn 2 September 2016, in these proceedings.
2. The notice to produce contained a notation to the effect that it would be satisfactory production if the emails were made available by way of USB, dropbox link or other electronic method.
3. The genesis for this request is an affidavit sworn by Ms Sayour on 27 October 2016 in the probate proceedings in which reference is made (at [30]-[31]) to a review carried out by Ms Sayour of the deceased's work email account with a company known as Biomed Technology Australia Pty Ltd (a business operated by the plaintiffs and of which the deceased was the managing director). An extract from that affidavit was tendered in the present proceedings.
4. Ms Sayour deposed that "going through all of Jamil's work e-mails" she had discovered a number of e-mails that "gave [her] cause for alarm". Fourteen emails were identified in that regard. Ms Sayour deposed that there were approximately 26,000 e-mails in that work email account and that she had not had the opportunity to go through all of them but was continuing to do so.
5. The plaintiffs point out that each of the emails to which Ms Sayour has referred in her affidavit are emails that were sent before the alleged misappropriation of the proceeds of sale of the residential units (which did not begin until November 2014). They say that the relevance of the emails in broad terms is that they go "to the case that Jamil and Fouad were up to no good together and Jamil was getting commissions and not doing his job properly, letting all sorts of things slip through which shouldn't, rather than the actual misappropriation of the proceeds of sale from November 2014" (T 38.26).
6. The way in which an issue of this kind seems to be pleaded - at [215] - is the allegation that "by those payments [the alleged secret commissions]", the deceased acted as agent of and/or preferred the interests of Mr Deiri, BPI and a third company and other entities owned or controlled by Mr Deiri "contrary to the interest of the second plaintiff and in breach of his duty as agent to [sic] faithfully and loyally serve the second plaintiff". In other words, the allegation of breach of that duty is expressly tied to the receipt of the secret commissions, not to other failures of Jamil to 'do his job properly'. The particulars to [215], including an allegation of forgery, seem to go well beyond receipt of the secret commissions - which highlights the inappropriateness of the way in which [215] is pleaded as adverted to above.
7. Mr Ti, the plaintiffs' solicitor, has deposed (at [52] of his affidavit of 27 March 2017) that there are tens of thousands of emails which are contained in the relevant email account, which he asserts are either not relevant or are commercially sensitive to the business of the company.
8. The first defendant says that, as a result of Ms Sayour's review, 14 emails have been deployed against her (referring to Ms Sayour's affidavit at [31]); that this gives the plaintiffs a forensic advantage and that, in fairness, she should have the opportunity to review the balance of the email account, lest there be other documents that might shed light on the allegations made against the deceased. She emphasises that, as production has been requested in electronic form only, compliance would take little effort. (Insofar as the notice to produce called for deleted emails that might not necessarily be the case but in oral argument the first defendant's Senior Counsel indicated that she would not press for those.)

Determination

1. The first problem is that, strictly speaking, the first defendant's notice dated 22 December 2016 is addressed to Ms Yesmine Sayour and, as noted above, she is not a party to the proceedings. If production of documents is sought by a third party to proceedings then the appropriate procedure is to issue a subpoena. Moreover, if the email account is one held by Biomed Technology Australia Pty Ltd (also not a party to the proceedings) one might have thought that the application for production should be sought from it (also to be made by subpoena). That said, I was informed by the first defendant's Senior Counsel that the notice had been treated by Lindsay J, when the matter was before his Honour, as in effect a subpoena (T 34.30).
2. The second problem is that the notice to produce calls for production of documents that may include confidential business documents. True it is that the plaintiffs would have the benefit of the usual Harman undertakings but it would not be unreasonable for the company to seek the protection of any commercially confidential material in the documents of which production is sought and to do so it would be required to incur costs in reviewing the whole of the email correspondence. That said, Ms Sayour's affidavit deposed to her intention to continue going through the email correspondence so it may be that any further costs would be limited.
3. Third, it has been emphasised by the Court on various occasions that the notice to produce procedure under UCPR 21.10 is not to be used as a means by which to circumvent the constraints imposed on discovery under Practice Note SC Eq 11 (see for example Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326 at [37] (Brereton J)). There is force in the plaintiffs' submission that a call for the entire email account (including deleted emails) is in effect an application for general discovery. The plaintiffs note in this regard that in Azzi v Volvo [2006] NSWSC 283 Brereton J held (at [4]) that notices to produce may be set aside in the circumstances and on the grounds equivalent to the setting aside of subpoenas, including where the notice calls for production of documents which have no apparent relevance to the issues in the proceeding; where the notice is used as a substitute for discovery; and where it is oppressive.
4. I accept that the requirement for specificity in the notice to produce connotes something that is identified, and not merely identifiable, and that what is sought must be relevant to a fact in issue (see Penrith Rugby League Club Ltd v Brown [2004] NSWSC 1182 (Young CJ); Norris v Kandiah [2007] NSWSC 1296 (Brereton J)).
5. In response to the proposition that a call for the entire email account would be likely to contain communications of absolutely no relevance to any issue in the proceedings, Senior Counsel for the first defendant indicated that she would be prepared to limit production to emails from and to the following: the first plaintiff; Mr Deiri; Moustafa Sayour; Fatimah Sayour; the Bank of Sydney; and the accountants for each of the plaintiffs; in each case limited to matters the subject of the allegations raised in the amended statement of claim. Even with such a limitation the difficulty is that the first defendant is using the notice to produce procedure in order to seek the production from Ms Sayour (a non-party to the proceedings) of a broad range of communications, such enquiry being cast in very general terms. Even if the notice to produce had been addressed to the plaintiffs, there is force to the submission that this is an improper attempt to circumvent the applicable practice note in relation to discovery.
6. At the very least, the first defendant should focus her enquiry on the relevant subject matter of the email communications by reference to particular issues in the proceedings and she should explain why it is that discovery of those emails is relevant to an issue in the proceedings and is necessary. I consider that the notice to produce should be set aside. That said, I accept the force of the submission that Ms Sayour (and hence presumably the plaintiffs) has had the forensic advantage of examination of the email account. In circumstances where it appears that the plaintiffs have been able to procure access to and inspection of Jamil's work email account with Biomed Technology Australia Pty Ltd, I would be prepared to make an appropriately limited direction that the plaintiffs produce email communications between Mr Deiri and Jamil in relation to payments made to or received by Jamil from Mr Deiri or BPI or out of the partnership account between BPI and Broadway Plaza from November 2014 to October 2015.

"Advices notice to produce"

1. This is the subject of the first defendant's 31 March 2017 notice of motion and an amended notice of motion served by the first defendant.
2. By notice to produce issued on 21 March 2017, as amended by agreement with the first defendant, the plaintiffs sought various documents, the only categories in dispute by the time of the applications before me being, as I understand it: 1. All costs agreements, costs disclosures, costs estimates, memoranda of costs and disbursements, fee schedules, fee notes, tax invoices, trust account receipts, receipts, remittance advices and records of payments in respect of legal costs and disbursements incurred or paid by you or for you or on your behalf, including for counsel, whether in your personal capacity or as administrator of the late Jamil Sayour, from 6 October 2015 to the date of return of this notice. … 3. Copies of all letters, emails, facsimile transmissions, mobile phone text messages, chat messages, instant messaging application messages, Facebook messages and all other written or printed communications that have passed between you and Fouad Deiri since 6 October 2015. 4. Copies of all written advices and copies of all records of oral advices that you have received as to your duties as administrator of the estate of the late Jamil Sayour, whether in respect of a. funds of the estate; or b. funds held in the name of the deceased which have been alleged by the plaintiffs to be trust funds. 5. Copies of all written advices and copies of all records of oral advices that you have received as to whether and to what extent and in respect of which claims (if any) it is prudent and reasonable for you to defend the present suit.
3. By an amended notice of motion, the first defendant sought this notice to produce to be modified such that categories 3-5 be deleted and for category 1 to be modified as follows: 1. All costs agreements, costs disclosures, costs estimates, memoranda of costs and disbursements, fee schedules, fee notes, tax invoices, trust account receipts, receipts, remittance advices and records of payments in respect of legal costs and disbursements incurred or paid by you or for the first defendant or on her behalf, in connection with these proceedings (being proceeding 2016/00369525) or the probate proceedings (being proceeding 2015/308327)
4. The first contest as to the plaintiffs' notice to produce relates to the documents sought in category [1]; that is, whether the first defendant should be required to produce fee notes in respect of work performed for her (whether personally or as administratrix) since Jamil's death, save in respect of these proceedings and the probate proceedings. The plaintiffs maintain that this information is likely to be relevant to the state of the first defendant's knowledge concerning the affairs of the deceased. In oral submissions, it was indicated that what the plaintiffs wish to see are any fee notes in relation to the preparation of a draft settlement deed that was submitted to Moustafa Sayour (apparently by Mr Deiri) at one stage in October 2015. The plaintiffs say that this goes to the first defendant's knowledge and involvement in relation to the subject matter of the draft deed and say they want to show that the first defendant "has more knowledge and involvement than she suggests" (T 40.31).
5. The next contest is as to category [3] of the notice to produce which seeks all communications with Mr Deiri since Jamil's death (apparently sought to falsify the assertion that the first defendant is ignorant of the affairs of the deceased). The first defendant argues that it is oppressive. The plaintiffs maintain that the evidence tends to show that the first defendant is acting in concert with Mr Deiri. They say that communications between them are likely to disclose evidence relevant to the first defendant's motion (not yet heard) for approval to "spend further trust funds".
6. Finally, there is a dispute as to the documents sought in categories [4] and [5]. The first defendant says that the material referred to in these paragraphs is plainly privileged (and she contests the relevance of this material in any event).
7. Complaint is made by the plaintiffs that there are no facts adduced to support the claim for privilege and that the first defendant has not itemised the list of documents over which privilege is claimed (referring to Hancock v Rinehart (Privilege) [2016] NSWSC 12; In the matter of Kala Capital Pty Ltd (No 2) [2012] NSWSC 1293 at [33]).
8. The first defendant argues that any document which answers the notice must fall squarely within ss 118 or 119 of the Evidence Act 1995 (NSW), pointing out that the existence of a lawyer-client relationship is established in the affidavit of Mr Mitry, the first defendant's solicitor, sworn 3 April 2017. It is submitted that in such a clear case, there is no need for a list specifying the privileged documents. Reference is made to Dalleagles Pty Ltd v Australian Securities Commission (1991) 6 ACSR 498, where Anderson J said (in a passage referred to with approval, in the context of the Evidence Act, by Campbell J in Green v AMP Life Ltd [2005] NSWSC 95 at [15]) at 505-6: In my opinion, discourse between solicitor and client with reference to the transactions covered by those instructions, that is, professional discourse in a professional capacity, should be regarded as prima facie for the purpose of giving and receiving advice. This would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor's engagement and any communication from the client to the solicitor in connection with that engagement. Only if the rule is applied in that way can the policy of it be carried out and its object practically fulfilled.
9. The first defendant also notes that confidentiality is a term implied by law into the solicitor-client relationship (referring to what Ipp J, as his Honour then was, said in Unoil International Pty Ltd v Deloitte Louche Tomatsu (1997) 17 WAR 98 at 108).
10. The plaintiffs argue that the advices notice to produce (in this respect) is confined to advices concerning the management and administration of the estate or the (alleged) constructive trust: at [4] as to advices "as to your duties as administrator …whether in respect of funds of the estate or funds ... which have been alleged by the Plaintiffs to be trust funds"; at [5] as to advices as to whether and to what extent it is "prudent and reasonable for you to defend the present suit". The plaintiffs emphasise that this is a proceeding in which the first defendant is sued as administratrix (noting that the first defendant's title as such depends wholly on the order of the Court - see JH Sunnucks, Williams, Mortimer & Sunnucks on Executors, Administrators & Probate (19th ed, 2008, Sweet & Maxwell) at [8-10]).
11. The plaintiffs maintain that as the first defendant is administering the estate as the Court's officer, she is not entitled to withhold from the Court, or from those interested in the estate or from those interested in the constructive trust in respect of the "stolen trust funds", the documents that have been sought (referring to Schreuder v Murray (No 2) (2009) 41 WAR 169; Gray v BNY Trust Co of Australia Ltd; (2009) 76 NSWLR 586; [2009] NSWSC 789; and Hancock v Rhinehart (Privilege)).
12. It is submitted that, by electing to use the funds to which she was given access by the order of Lindsay J of 12 December 2016, the first defendant has accepted that they were used for administration purposes and not for private purposes. The plaintiffs argue that they have standing to make application for production of the said advices, since they claim to be a creditor and would have standing to seek relief in relation to the administration of the estate and/or trust fund.
13. The plaintiffs further argue that, by applying for further access to the funds (in that part of the motion that has not yet been heard), the first defendant puts in issue the reasonableness of her conduct and the appropriateness of conducting a defence. They say that this establishes an issue waiver and argue that the assertion that further funds are required for the defence implies that the funds already received (and used) are insufficient for that purpose; and that all the funds so far received and applied were properly and prudently applied to administration purposes, such that it would be proper to permit further funds to be expended.
14. It is submitted that "[s]omeone who puts her hand out for trust money is not entitled to withhold the fruits from the Court on a proper application for administration, nor to withhold it from the trustee". At this stage, of course, the existence of the alleged trust has not yet been determined.
15. The first defendant says she owes no duty to the plaintiffs (even assuming that they are creditors of the estate or constructive beneficiaries as they assert).

Determination

1. In relation to the documents sought in category [1], after debate as to this category, the plaintiffs indicated that they would be prepared to limit the request to documents of the kind sought in relation to the probate proceedings and the present proceedings (in other words, the modified version proposed by the first defendant), together with the production of any such document relating to the preparation of a draft settlement deed forwarded to Moustafa Sayour in October 2015; and the first defendant accepted this. Those are appropriate concessions on both sides. I see no basis for a more extensive enquiry as to legal fees paid by the first defendant over potentially wide ranging and unrelated matters.
2. As to category [3], the difficulty I have is that it is too broad in scope and bears all the hallmarks of a fishing expedition. It needs to be narrowed by reference at least to topics of relevance to the issues in the proceedings. Moreover, its principal relevance, as I understand it, is for the plaintiffs to be able to deploy evidence as to any arrangement between the first defendant and Mr Deiri for the provision of funds as a matter relevant to the exercise of discretion whether or not to release further funds to the first defendant out of the frozen bank account. That application is not presently before the Court and may or may not be pressed in due course. I do not consider it appropriate to order the production of documents called for by this category.
3. As to categories [4] and [5], while disclosure of legal advice obtained by trustees for their guidance in the discharge of their functions as trustees, and paid for from the trust fund, will generally be ordered (see Tucker et al, Lewin on Trusts (19th ed, 2016, Sweet & Maxwell) at [23-048; esp fn 230), it is recognised by Lewin that special considerations apply to legal advice obtained by trustees in relation to disputes with a particular beneficiary otherwise than in his character as beneficiary, or a person connected with such a beneficiary (in which case, if the trustees consider that disclosure would be contrary to the interests of the beneficiaries as a whole, they may exercise a discretion to withhold disclosure from that beneficiary) (see Rouse v IOOF Australia Trustees Ltd [1999] SASC 181 and the commentary in Lewin at [23-050]). (See also the article written by Campbell J, extra-judicially, "Access by Trust Beneficiaries to Trustees' Documents, Information and Reasons" (2009) 3 Journal of Equity 97.)
4. I accept the submission for the first defendant that legal advices dealing with the matters identified in categories [4] and [5] (and particularly at [5]) would prima facie be privileged and I accept that in these circumstances the requirement for them to be listed would perhaps be of little practical use.
5. To the extent that the plaintiffs rest their claim for these documents on the basis that they are beneficiaries/creditors of the deceased, they are clearly in a position of conflict - having claims against the estate (to which documents at least as called for in category [5] might be assumed directly to relate). The administratrix would in my opinion be entitled to refuse to provide the plaintiffs with access to documents within category [5] (and also category [4] at least to the extent that any reference was there made to the merits/conduct of the proceedings). The plaintiffs, however, argue that the way in which [5] has been framed does not call for the production of documents going to the merit of the proceedings or any defence of the proceedings; rather it is said just to be seeking advice as to whether and to what extent, and in respect of what claims if any, it is prudent and reasonable for the first defendant to defend the present proceeding (see T 44.15-20). So limited, it may well be that there is little or nothing to produce given that the first defendant has intimated that she has not yet decided whether to seek judicial advice.
6. To the extent that the claim is based on the duty owed by the administratrix to the Court, and is linked to the fact that funds obtained by the first defendant as administratrix have been expended on such advices, in circumstances where further funds are sought, one immediate answer is that the application for further funds has not yet been made; nor has it yet been determined (apparently) whether judicial advice will be sought. In those circumstances it is premature to entertain a debate as to the entitlement of persons in the position of the plaintiffs (claiming to be creditors and beneficiaries under a constructive trust alleged to have arisen by the receipt of trust moneys) to compel the production of documents obtained by another in the alleged position of constructive trustee.
7. Nevertheless I accept that documents in answer to categories [4] and [5] may be relevant should the application for release of further funds be pursued or should there be an application for judicial advice brought by the first defendant as to whether to defend the proceedings. I consider that those documents (if any) should be produced to the Court in a sealed envelope but on the basis that no access will be granted to such documents by the plaintiffs. In the event that at some stage those documents become relevant for the Court to see, then the question of access by the plaintiffs to those documents can be revisited.

"Pleaded documents notice to produce"

1. Finally, on 23 February 2017, the first defendant served a notice to produce addressed to Moustafa Sayour seeking the production of particular documents referred to in the amended statement of claim.
2. The plaintiffs maintained that the notice of 23 February 2017 was oppressive (containing 49 paragraphs some of which called for multiple documents). The plaintiffs say that in any event that many of these documents have already been provided, referring to a letter dated 8 March 2017 which identified those that had by then been produced and with which the balance of the documents called for were supplied (see Mr Ti's affidavit of 27 March 2017 at [59]).
3. A number of the paragraphs in that 8 March 2017 letter refer to the production of documents "by way of service of affidavit and exhibit of Moustafa Sayour dated 2 September 2016" or, similarly, refer to production by reference to the service of an affidavit and exhibit of Yesmine Sayour of that date. There was in my opinion a legitimate basis for complaint by the first defendant that she should not have to trawl through and identify what documents (out of all the documents exhibited to the affidavits in the probate proceedings) were referred to in the relevant parts of the pleading, if there was in fact any scope for uncertainty as to this. The plaintiffs should in my opinion have identified what documents in the said exhibit were the documents referred to in the particular paragraphs of the pleading in respect of which the requests have been made.
4. That said, in the course of debate in relation to this notice to produce, Senior Counsel accepted that no further answer to the notice to produce was required (T 45). Therefore nothing further need be said about this notice to produce.

Conclusion

1. For the reasons set out above, I make the following orders: 1. Order the plaintiffs within 21 days to answer the request for particulars contained in the following paragraphs of the first defendant's revised request for particulars issued on 5 may 2017 (as indicated in the reasons for judgment on the present applications): 7, 9, 11, 12-22, 28, 29(a), 30, 31(a), 32, 34-39; as well as the particulars referred to at [85] of these reasons. 2. Set aside the notice to produce addressed to Ms Yesmine Sayour but direct the plaintiffs within 21 days to produce email communications on Jamil's work email account with Biomed Technology Australia Pty Ltd between Mr Deiri and Jamil in relation to payments made to or received by Jamil from Mr Deiri or Broadway Plaza Investments Pty Ltd or out of any partnership account between Broadway Plaza Investments Pty Ltd and Broadway Plaza Pty Ltd, from November 2014 to October 2015. 3. Order the first defendant to produce within 21 days: (a) the documents identified in category [1] of the plaintiffs' notice to produce issued on 21 March 2017, limited as indicated in these reasons for judgment, and (b) in a sealed envelope access to which is not to be granted to the plaintiffs without further order, the documents sought in categories [4] and [5] of that notice to produce (again, limited as indicated in these reasons). 4. Otherwise set aside the plaintiffs' notice to produce issued on 21 March 2017. 5. List the matter before me at 9.30am on 28 June 2017 for further directions including as to listing for hearing the balance of the first defendants' notice of motion filed 17 March 2017, and/or the plaintiff's motion for default judgment, if either is pressed.

Costs

1. As to costs, as will be apparent from my earlier comments, neither side has covered itself with glory in relation to the interlocutory stoushes to date. I remind the parties of the obligations of litigants in this Court by reference to ss 56-59 of the Civil Procedure Act. Both parties have had a measure of success in relation to the request for particulars and in relation to the production of documents that was sought/resisted, as the case may be. The appropriate outcome in these circumstances in my opinion is that each side should bear its or their own costs of the present applications. Therefore, I make the following final order: (6) Each party pay her, his or its own costs of the applications heard on 26 April 2017.

Amendments 26 June 2017 - Amendment to Order 1 on coversheet and conclusion 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: 26 June 2017