Australia: Don't delay getting documents for your expert

Expert Matters
Last Updated: 24 October 2016
Article by John Dawson and Ben Mahler

MARTINCIC -v- MARUSCO [2016] WASCA 133

"The defendants cannot reasonably complain that they have been denied access to documents which they have not clearly requested."

Introduction

Opinions vary as to when experts should be engaged. This judgment illustrates that failure to adhere to court deadlines can lead to refusal of an adjournment where a party has not made reasonable attempts to mount its defence, including timely engagement of an expert.

The defendants in the primary proceedings had applied for leave to appeal against a decision by the trial judge not to vacate the hearing dates. The application argued that the defendants had been unreasonably denied 'unfettered' access to books and records, including computers, to provide to their expert accountant.

Leave was denied, partially due to the defendants "failing to brief their accountants about information in their possession earlier, not being sufficiently proactive in securing the report and in failing to utilise the formal and informal means available to them to obtain copies of relevant documents".

Background

The primary proceedings related to allegations that the defendants, a former director and his wife, had misappropriated funds from a bank account of M3 Building and Construction Pty Ltd.

There were two alleged methods of misappropriation. Firstly, it was alleged that the defendants falsified invoices from service providers for amounts which were paid into bank accounts which the defendants controlled. Secondly, it was alleged that the defendants made cash withdrawals from the accounts, which were not authorised or necessary for M3's business.

Proceedings commenced, supported by an affidavit of the first plaintiff, on 4 May 2016. Although the plaintiffs initially sought interlocutory injunctive relief, this was considered unnecessary when the parties agreed on 24 May 2016 to orders programming the matter for an expedited trial. These orders called for a request for specific discovery by the defendants and an exchange of affidavits.

This is where things began to go wrong.

The defendants requested 'unrestricted' and 'unfettered' access to documents, which the plaintiffs repeatedly denied. Rather, the plaintiffs provided documents which their own forensic accounting expert had relied upon, and asked the defendants to provide a list of further documents requested.

The parties eventually agreed on the defendants' expert attending the plaintiffs' premises. But the expert was not given access to records such as the plaintiffs' computers (on the grounds that they might have contained privileged material and confidential material unrelated to the matter).

Applications to vacate trial

In the primary proceedings, the defendants argued that the trial date should be vacated because they had been denied access to emails which, the defendants said, would show the first plaintiff's authorisation of the payments. In support of their application, the defendants did not include any statements from their expert or any documents that suggested that supportive emails actually existed.

The primary judge rejected the applications, finding that:

  • there was nothing concrete before him to indicate that any documents demonstrating authorisation existed, other than assertions in broad terms;
  • the plaintiffs had complied with trial directions and the defendants had not: the defendants had failed to comply with directions to file affidavits;
  • the plaintiffs' affidavits further established the need to expedite the trial;
  • the plaintiffs' expert evidence supported an already 'compelling case'; and
  • "...the defendants ... seem to have created a lot of dust and noise but have not actually ventured forth to articulate the semblance of a barely arguable defence to the concerning matters that are raised against them."

Leave to appeal

The defendants sought leave to appeal on the basis that the primary judge's discretion was exercised unreasonably or unjustly.

It was again contended that the defendants' forensic accountants were "denied full access to the documents of M3, meaning that the accountants had inadequate time to prepare their report".

The Court of Appeal found the following:

  • The "available mechanism for the defendants to obtain copies of emails" was set out in the programming orders. The defendants did not make use of this mechanism;
  • "There is no substance to the defendants' complaints so far as they relate to a denial of unfettered access to M3's computer systems. Denial of such access was reasonably required to protect M3's legitimate interests, such as the preservation of legal professional privilege and the confidentiality of documents not related to any matter in issue in the proceedings";
  • "There was both a formal and informal mechanism for the defendants to obtain access to relevant documents held by M3. The formal mechanism was to request discovery of specified classes of documents...The informal mechanism was that offered by the plaintiffs: for the accountants to ask for categories of documents they required";
  • It was only at the hearing before the primary judge on 19 July 2016 that the defendants had said that they were seeking emails that would assist in establishing that the first plaintiff had authorised the transactions; and
  • In any event, the defendants' forensic accountants were not approached regarding scope until 17 June 2016, were not briefed until after receiving the plaintiffs' expert reports (which were due the day before any request for discovery was to be made) and were not 'immediately provided' by the defendants with the records included in the first plaintiff's affidavit of 4 May 2016 or records of accounts controlled by the defendants.

The Court found that the defendants "cannot reasonably complain that they have been denied access to documents which they have not clearly requested".

Confidentiality requirement

The defendants pointed to the terms of the confidentiality agreements which their forensic accountants were required to sign as indicating the extent of the restrictions placed on their access.

The Court found no substance in that contention: the undertaking merely required the forensic accountants to use information obtained from M3 only for the purposes of preparing expert evidence in the proceedings and to keep confidential (including from the defendants) any information that was not related to the subject matter of their report.

Consideration and decision

Leave to appeal was denied. The Court of Appeal made the following observations:

"A party who is given a sufficient opportunity to present their case, and who fails to take advantage of that opportunity without reasonable cause, cannot complain that they have been denied procedural fairness because the court has declined to provide a further opportunity to do so."
"... The evidence before the primary judge supported the conclusion that the defendants had not taken advantage of that opportunity [to prepare for trial], and that the difficulties which they faced in obtaining expert evidence were largely of their own making."
"The defendants were at fault in failing to brief their accountants about information in their possession earlier, not being sufficiently proactive in securing the report and in failing to utilise the formal and informal means available to them to obtain copies of relevant documents."

Significance

Experts rely heavily on the information provided to them. Providing experts with incomplete information can produce imperfect results. However, practitioners need to balance the need for caution in providing experts with incomplete information with the strictures of court timetables. This judgment highlights the need for legal practitioners to:

  • consider when to provide initial documents to an expert, even when further documents are expected; and
  • discuss with experts what can be produced in order to comply with a short timetable, even if further evidence will be required.

Another option which might have helped resolve the impasse in this matter would have been the use of an independent computer expert to acquire images of computer systems forensically; to remove privileged information; and then to provide the remaining information to the requesting party.

However, where time is limited (as it was in this case) the option to appoint an independent computer expert might not be practical. In such cases, practitioners should focus on full use of the formal and informal means of access to relevant information (while also diligently recording any resistance to those attempts, to facilitate any applications for more time).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Ben Mahler
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.