ANDREW KOH NOMINEES PTY LTD -v- PACIFIC CORPORATION LTD [No 2] [2009] WASC 207 (23 July 2009)

Last Updated: 13 August 2009

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : ANDREW KOH NOMINEES PTY LTD -v- PACIFIC CORPORATION LTD [No 2] [2009] WASC 207

CORAM : BEECH J

HEARD : 30 JUNE 2009

DELIVERED : 23 JULY 2009

FILE NO/S : CIV 2545 of 2003

BETWEEN : ANDREW KOH NOMINEES PTY LTD As Trustee for KL UNIT TRUST (ACN 009 067 761)

Plaintiff

AND

PACIFIC CORPORATION LTD

First Defendant

SIN JEN HWANG

Second Defendant

ROBERT ANGELO ARRIGONI

Third Defendant

GREAT VICTORIA CORPORATION PTY LTD

Fourth Defendant

CONSORTIUM LAND PTY LTD

Fifth Defendant

FILE NO/S : CIV 1398 of 2004

BETWEEN : PACIFIC CORPORATION LTD (ACN 002 547 999)

Plaintiff

AND

ANDREW KOH NOMINEES PTY LTD As Trustee for THE KL UNIT TRUST (ACN 009 067 761)

Defendant

FILE NO/S : CIV 1704 of 2004

BETWEEN : ANDREW KOH NOMINEES PTY LTD As Trustee for ANDREW KOH FAMILY TRUST (ACN 009 067 761)

First Plaintiff

ANDREW KEE SUAN KOH

Second Plaintiff

ANDREW KOH NOMINEES PTY LTD As Trustee for KL UNIT TRUST (ACN 009 067 761)

Third Plaintiff

AND

GREAT VICTORIA CORPORATION PTY LTD (ACN 053 991 629)

First Defendant

PACIFIC CORPORATION LTD (ACN 002 547 999)

Second Defendant

FILE NO/S : CIV 2051 of 2004

MATTER : An application by the Receiver and Manager of the Balneum Joint Venture for interpleader relief against the claims of Pacific Corporation Ltd (ACN 002 547 999) and Andrew Koh Nominees Pty Ltd (ACN 009 067 761) as trustees for the KL Unit Trust

BETWEEN : GARY JOHN TREVOR As Receiver and Manager of BALNEUM JOINT VENTURE

Applicant

AND

PACIFIC CORPORATION LTD (ACN 002 547 999)

First Respondent

ANDREW KOH NOMINEES PTY LTD As Trustee for KL UNIT TRUST (ACN 009 067 761)

Second Respondent

JAVEL HOLDINGS PTY LTD (ACN 009 468 151)

Third Respondent

AL PING KEE

JARRAD HEE

Fourth Respondents

MOH KUY LIM

AH MOI LIM

Fifth Respondents

DANREG NOMINEES PTY LTD (ACN 097 893 091)

Sixth Respondent

BROADCOURT PTY LTD (ACN 092 710 809)

Seventh Respondent

(BY ORIGINAL ACTION)

PACIFIC CORPORATION LTD (ACN 002 547 999)

JAVEL HOLDINGS PTY LTD (ACN 009 468 151)

DANREG NOMINEES PTY LTD (ACN 097 893 091)

BROADCOURT PTY LTD (ACN 092 710 809)

Plaintiffs by Interpleader

AND

ANDREW KOH NOMINEES PTY LTD As Trustee for the KL UNIT TRUST (ACN 009 067 761)

AI PING KEE

JARRAD HEE

MOH KUY LIM

AH MOI LIM

Defendants by Interpleader

(BY COUNTERCLAIM)

Catchwords:
Practice and procedure - Implied undertaking to use documents compulsorily produced in litigation only for purposes of the litigation - Answers to interrogatories - Application by plaintiff for limited release from implied undertaking in order to provide answers to interrogatories to police - Turns on own facts

Legislation:
Nil

Result:
Application for modification of the implied undertaking granted

Category: B

Representation:

CIV 2545 of 2003

Counsel:

Plaintiff : Mr J Garas

First Defendant : Mr D N Ryan

Second Defendant : Mr D N Ryan

Third Defendant : Mr D N Ryan

Fourth Defendant : Mr D N Ryan

Fifth Defendant : Mr D N Ryan

Solicitors:

Plaintiff : DLA Phillips Fox

First Defendant : Talbot Olivier

Second Defendant : Talbot Olivier

Third Defendant : Talbot Olivier

Fourth Defendant : Talbot Olivier

Fifth Defendant : Talbot Olivier

CIV 1398 of 2004

Counsel:

Plaintiff : No appearance

Defendant : No appearance

Solicitors:

Plaintiff : Talbot Olivier

Defendant : DLA Phillips Fox

CIV 1704 of 2004

Counsel:

First Plaintiff : No appearance

Second Plaintiff : No appearance

Third Plaintiff : No appearance

First Defendant : No appearance

Second Defendant : No appearance

Solicitors:

First Plaintiff : DLA Phillips Fox

Second Plaintiff : DLA Phillips Fox

Third Plaintiff : DLA Phillips Fox

First Defendant : Talbot Olivier

Second Defendant : Talbot Olivier

CIV 2051 of 2004

Original Action

Counsel:

Applicant : No appearance

First Respondent : No appearance

Second Respondent : No appearance

Third Respondent : No appearance

Fourth Respondents : No appearance

Fifth Respondents : No appearance

Sixth Respondent : No appearance

Seventh Respondent : No appearance

Solicitors:

Applicant : DLA Phillips Fox

First Respondent : Talbot Olivier

Second Respondent : DLA Phillips Fox

Third Respondent : Talbot Olivier

Fourth Respondents : DLA Phillips Fox

Fifth Respondents : DLA Phillips Fox

Sixth Respondent : Talbot Olivier

Seventh Respondent : DLA Phillips Fox

Counterclaim

Counsel:

Plaintiffs by Interpleader : No appearance

Defendants by Interpleader : No appearance

Solicitors:

Plaintiffs by Interpleader : Talbot Olivier

Defendants by Interpleader : DLA Phillips Fox

Case(s) referred to in judgment(s):

Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476

Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10

Hearne v Street [2008] HCA 36; (2008) 235 CLR 125

Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283

Minister for Education v Bailey [2000] WASCA 377; (2000) 23 WAR 149

North East Equity Pty Ltd v Goldenwest Equities Pty Ltd [2008] WASC 190

R v Director of Serious Fraud Office; Ex parte Smith [1993] AC 1

RPS v The Queen [2000] HCA 3; (2000) 199 CLR 620

Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217

1 BEECH J: The plaintiff applies for a modification of the implied undertaking to use a document that was produced in litigation only for the purposes of the litigation. The plaintiff wishes to provide the second defendant's answers to interrogatories to the police as evidence of alleged criminal offences by the third defendant and seeks a modification of the undertaking to permit that. The defendants oppose the application.

Background facts

2 The plaintiff (AKN) and the first defendant (PCL) entered a written agreement to develop residential apartments as a joint venture. The joint venture was known as the Balneum Joint Venture.

3 In February 2003 an account in the name of the Balneum Joint Venture was opened with the National Australia Bank. There were four authorising parties identified on the account opening form: Mr Andrew Koh, Mrs Christine Koh, Mr Sin Jen Hwang (the second defendant) and Mr Robert Arrigoni (the third defendant). Mr and Mrs Koh are the directors of AKN. Mr Hwang and Mr Arrigoni are the directors of PCL. The account authority provided that cheques could be signed by any two of the authorising parties.

4 Mr Hwang's answers to interrogatories relate to 16 cheques drawn on this account. Each of those cheques appears to have been signed in the name of Mr Hwang and Mr Arrigoni. In his answers to interrogatories dated 25 March 2009 Mr Hwang states that:

(a) he did not sign the cheques;

(b) on each cheque Mr Arrigoni signed the signature which purports to be that of Mr Hwang; and

(c) Mr Hwang did not authorise any person to sign the cheques.

5 The plaintiff wishes to provide these answers to interrogatories to the police.

6 In about December 2003 Mrs Koh filed a complaint with the Major Fraud Squad of the WA Police. Among other things, the complaint concerned the conduct of Mr Hwang and Mr Arrigoni in relation to the drawing and signing of cheques on the joint venture bank account.

7 In about 2005 Mrs Koh provided a statement to the police. In about 2007 Mrs Koh provided a second statement to the police.

8 The only evidence about the current status of the investigation is the statement, in the affidavit sworn 11 June 2009 of Mr Shaw, solicitor for the plaintiff, that the complaint is presently being investigated by the Major Fraud Squad.

Legal principles

9 The legal principles were not in dispute on this application. The issue between the parties was about the application of those principles to the circumstances of this case.

10 The following summary of the relevant legal principles draws heavily from the decision of Newnes J in North East Equity Pty Ltd v Goldenwest Equities Pty Ltd [2008] WASC 190 [35] - [45].

11 Where one party to litigation is compelled, by reason of a rule of the court or a specific order of the court or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use that disclosure for any purpose other than that for which it was given, unless it is received into evidence. This principle applies to a range of material including discovered documents and answers to interrogatories: Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 [96].

12 Traditionally, the obligation has been described as an implied undertaking. Properly understood, however, it is an obligation of substantive law: Hearne v Street [106] - [108].

13 The rationale for the imposition of this obligation is to ensure that privacy and confidentiality are not invaded more than is absolutely necessary for the purpose of doing justice: Hearne v Street [107]; Minister for Education v Bailey [2000] WASCA 377; (2000) 23 WAR 149 [25] - [27].

14 The power to dispense with or modify the implied undertaking is not freely exercised, but it will be exercised if there are special circumstances which make it just to do so: Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10, 37; Hearne v Street [107].

15 The implied undertaking should be modified or released only to the extent that it is in the interests of the administration of justice or in the public interest to do so: Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217, 225; North East Equity Pty Ltd [40].

16 In Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 [31] (a passage cited with approval by Newnes J in North East Equity Pty Ltd [41]) the Full Court of the Federal Court said the following in relation to the requirement of special circumstances:

The notion of 'special circumstances' does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.

17 In North East Equity Pty Ltd [42] - [44] Newnes J said the following in the context of an application to permit disclosure of information for the purpose of investigation and prosecution of a criminal offence:

(a) there can be a public interest in favour of disclosure in respect of information that is relevant to the investigation and prosecution of a criminal offence, and that public interest can override the public interest in the administration of justice in the preservation of the confidentiality of discovered documents;

(b) the court must weigh up the competing public interests as disclosure for the purpose of investigation and prosecution of an offence will not always outweigh the public interest in the preservation of the confidentiality of discovered documents;

(c) among the factors relevant to the exercise of the court's discretion are:

(i) the nature of the offence alleged;

(ii) the cogency of the evidence sought to be adduced in support of it;

(iii) the authority to which the documents are sought to be disclosed;

(iv) the manner of the authority's intended use and the possibility of misuse by that authority;

(v) any prejudice, actual or potential, which may be occasioned to the respondent by the disclosure; and

(vi) whether the application has been brought for some personal advantage or improper purpose rather than to advance the public interest.

The prospect that the provision of documents to the police might lead to the prosecution of a defendant is not prejudice of a kind to be taken into account in weighing the competing public interests: North East Equity Pty Ltd [48].

18 In weighing up the competing public interests, the importance of the public interest in the preservation of the confidentiality of discovered documents must be kept squarely in mind: North East Equity Pty Ltd [45]; Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476, 488.

Should the implied undertaking be modified?

19 By s 473 of the Criminal Code, any person who with intent to defraud forges a record, or utters a forged record, is guilty of a crime and is liable to imprisonment for seven years.

20 The substance of Mr Hwang's answers to interrogatories is that Mr Arrigoni forged Mr Hwang's signature on the various cheques by signing Mr Hwang's name without authority to do so.

21 The defendants' submissions point out, correctly, that there is an additional element of the offence, namely an intent to defraud. In that regard, the defendants point to their plea, in par 16.2 of the substituted consolidated defence, that the cheques were used to discharge costs or liabilities properly incurred by or on behalf of the joint venture.

22 In response, the plaintiff's submissions point to certain cheque butts and payment vouchers attached to Mrs Koh's affidavit of 29 June 2009. Those cheque butts identified payees other than Mr Arrigoni. Moreover, the payment voucher for one of the cheques identified, as the payee, 'Access Plumbing'.

23 Of course, these matters do not themselves prove any dishonesty on the part of Mr Arrigoni. They are, however, relevant because they suggest that a possible allegation of forgery may not be without substance.

24 The defendants submitted that Mr Hwang's answers to interrogatories would not be admissible in a trial of Mr Arrigoni. I accept that submission.

25 Counsel for the plaintiff submitted that the answers to interrogatories could be tendered at a trial of Mr Arrigoni under s 79C of the Evidence Act 1906 (WA), if Mr Hwang declined voluntarily to give evidence. I do not accept that submission. In my opinion, a person 'refuses to give evidence' within the meaning of s 79C(2) only if that person refuses to do so having been subpoenaed to appear as a witness.

26 Consequently, I deal with this application on the basis that the answers to interrogatories will not, in themselves, have any direct evidentiary value in a trial of Mr Arrigoni. That is relevant to the balancing of the public interests involved in this application.

27 Notwithstanding the absence of direct evidentiary value, it seems to me that the answers to interrogatories may be of significant benefit to the police in an investigation in relation to the signing of these cheques. I accept, as the defendants submit, that it is likely that Mrs Koh said, in her statement to the police, that she believes Mr Hwang did not sign his own signature and that that was done by Mr Arrigoni. But the opinion of a third person is one thing. A statement on oath by the person whose name has been signed is quite another.

28 Further, the existence of a statement on oath by Mr Hwang that he did not sign his signature and did not authorise Mr Arrigoni to do so may assist the progress of the investigation. Moreover, it may provide, from the prosecution perspective, a sufficiently secure foundation to decide to call Mr Hwang, in the expectation that his evidence will accord with what he said on his oath in his answers to interrogatories.

29 The remaining factors mentioned above [17] can be dealt with shortly. The police are the appropriate authority to receive the information in order for them to pursue their investigation. There is no basis to suggest a possibility of misuse of the documents by the police. The defendant did not point to any relevant prejudice arising from the disclosure. In North East Equity Pty Ltd [53] Newnes J accepted that an investigation might lead to consequential inconvenience to the person the subject of the investigation, but ultimately gave that factor little weight. I would take the same approach. Finally, there is no suggestion (and in my opinion, no basis in the evidence to suggest) that the application has been brought for any personal advantage or improper purpose, rather than to advance the public interest.

30 The defendants point to three further matters that are said to militate against a favourable exercise of discretion to modify the implied undertaking.

31 First, the defendants submit that the answers to interrogatories did not exist before the litigation was commenced and, in that respect, were to be distinguished from primary documents. That much may be accepted. That fact, the submission continued, militated against modifying the implied undertaking. In that regard the defendant referred to what was said by Wilcox J in Springfield Nominees (225).

32 In my opinion, the fact that the document in this case, namely the answers to interrogatories, was created in the course of the litigation is not a matter which, in itself, gives rise to a factor of any significance against the exercise of discretion to modify the implied undertaking. In Springfield Nominees, Wilcox J suggested that documents created for the purpose of the litigation may be more readily the subject of a release of the undertaking because those documents were expected to enter the public domain. In this case, I do not point to that factor as militating in favour of the release of the undertaking. I do not consider that it is a factor of any significance, one way or the other, in balancing the relevant interests.

33 Secondly, the defendants point to the fact that the complaint was made to the police more than five years ago and that little is known about its present status. That is true. However, that fact does not seem to me to remove the potential utility of the disclosure to the police of the answers to interrogatories. The evidence does not establish that the investigation is closed. See, by analogy, North East Equity Pty Ltd [49] - [52].

34 Finally, the defendants submit that:

(a) the second and third defendants are not compelled by law to answer questions by the police in the course of their investigations; and

(b) to allow the plaintiff to provide Mr Hwang's answers to the police would 'subvert [Mr Hwang's] right to silence and effectively undermine a cornerstone of the criminal justice system'.

35 I accept the first proposition, but not the second.

36 The 'right to silence' is a shorthand description of a number of different immunities that apply in criminal law. The various immunities differ in nature, origin, incidence, importance and extent to which they have been encroached upon by statute: R v Director of Serious Fraud Office; Ex parte Smith [1993] AC 1, 30 - 31; RPS v The Queen [2000] HCA 3; (2000) 199 CLR 620 [22].

37 There seems to me to be a significant difference, in principle, between the right of a suspect not to answer questions by the police or other investigator, and the liberty of a person to decline to assist police by answering questions relating to the investigation of a possible offence by someone else.

38 I am satisfied that in the circumstances I have outlined, the public interest in favour of disclosure of the answers to interrogatories to the police outweighs the public interest in the preservation of the confidentiality of the answers as produced under compulsion as part of the litigation process.

Conclusion

39 I would make an order substantially to the effect sought by the plaintiff. I will hear from the parties on the terms of the order and on the question of costs.