Supreme Court New South Wales Medium Neutral Citation: Dominic Iacullo and Lillian Iacullo v Luigi Iacullo & Ors (No 4) [2012] NSWSC 331 Hearing dates: 5 March 2012 Decision date: 05 April 2012 Jurisdiction: Equity Division Before: Black J Decision: Amendment of reference to referee by insertion of new paragraph 1A into orders made by the Court on 14 June 2011. Costs to be costs in the cause in the Cross-Claim. Catchwords: PRACTICE AND PROCEDURE - Amendment of reference to referee by insertion of new paragraph into orders previously made by the Court. Category: Interlocutory applications Parties: Dominic Iacullo (Second Defendant/First Cross-Claimant) Lillian Iacullo (Third Defendant/Second Cross-Claimant) Luigi Iacullo (Plaintiff/First Cross-Defendant) Badminton Investments Pty Ltd (Second Cross-Defendant) IMS Developments Pty Ltd (Third Cross-Defendant) Homeline Constructions Pty Ltd (Fourth Cross-Defendant) Michael Murr (Fifth Cross-Defendant) Pacificon Pty Ltd (Sixth Cross-Defendant) MMAI Pty Ltd (Seventh Cross-Defendant) Glad Con Pty Ltd (Eighth Cross-Defendant) Representation: Counsel: D. A. Smallbone (Defendants/Cross-Claimants) G. A. Moore (Plaintiff/First and Second Cross-Defendants) F. G. Lever SC (Third, Fourth, Fifth, Sixth, Seventh and Eighth Cross-Defendants) Solicitors: Allsop Glover (Defendants/Cross-Claimants) Kreisson Legal (Plaintiffs/First and Second Cross-Defendants) Carroll & O'Dea (Third, Fourth, Fifth, Sixth, Seventh and Eighth Cross-Defendants) File Number(s): 07/257623 Judgment 1On 26 March 2012, I delivered judgment dealing with a motion brought by the Cross-Claimants, Mr Dominic and Mrs Lillian Iacullo, seeking an order that a reference to a referee ordered by Bergin CJ in Eq on 14 June 2011 be terminated and that questions arising in the Cross-Claim in these proceedings, in respect of, broadly, an accounting of the transactions for various trusts be returned to an Associate Justice or taken by a Judge. I directed that the reference to the referee should continue for the reasons set out in that judgment. 2I referred in my judgment to a possibility raised in the course of oral submissions of confining the reference in a manner which reflects the task which the referee had indicated he would undertake, namely the preparation of an account of transactions based on available documentary material. I noted that that course had the advantage of allowing greater clarity as to the task which was in fact being performed by the referee, but that any amendment should be made in a manner which would not unduly limit the referee's discretion or prevent further inquiry which he may consider appropriate. 3I set out a possible formulation of a new paragraph 1A to be inserted in the orders made by Bergin CJ in Eq on 14 June 2011 referring the matter to the referee for inquiry and report and invited the parties to make submissions as to the wording of that paragraph. Each of the Cross-Claimants and the Third-Eighth Cross-Defendants made such submissions. 4The Cross-Claimants accepted that an Order 1A in the terms set out in paragraph 26 of my judgment should be made to give effect to the intentions expressed in that judgment. The Third-Eighth Cross-Defendants had consulted with the referee in respect of the terms of the proposed order and the referee had suggested a change of wording in the order, for the avoidance of doubt, to replace the reference to documents being "made available" to him for the purposes of his inquiry with documents being "submitted" to him. I consider that amendment is appropriate and I will make it in Order 1A as set out below. 5The Cross-Claimants also contended that additional changes should be made to paragraphs 1-5 of the Schedule appearing at the end of the Court's orders made on 14 June 2011, first, by substituting the words "a report" for the words "an account to be taken" and, second, by inserting the words "so far as the same appear from available documentary material" at the end of each of those paragraphs. The Cross-Claimants contend that those amendments are appropriate since the schedule to the orders define the scope of the reference and that schedule would need to be amended to achieve the purpose set out in paragraph 25 of my earlier judgment, by: "... allowing greater clarity as to the task which is in fact being performed by the referee and avoiding future dispute as to the scope of the reference and what has and has not been determined by it." 6In my view, the first amendment proposed by the Cross-Claimants is appropriate for that purpose. That amendment reflects the fact that the referee will in fact be delivering a report, rather than performing an accounting in the traditional form referred to in paragraph 22 of my earlier judgment. 7I do not consider I should make the second amendment sought by the Cross-Claimants, inserting the words "so far as the same appear from available documentary material" in the Schedule, since I consider this would inappropriately confine the scope of the referee's inquiry. The amendment to insert paragraph 1A in the Orders will require the referee's report to identify entries, transactions, assets or liability where adequate supporting or source documents were not supplied to him. However, the referee should not be prevented from extending his inquiry, in the manner that he had previously foreshadowed, to include a contested hearing if he considers it appropriate to do so. If that hearing is held and provides further information which will assist in the preparation of his report, he should not be prevented from taking that further information into account, by limiting his conclusions to matters which appear from the documentary material available to him in the way the Cross-Claimants propose. To the extent that there are deficiencies in that documentary material, paragraph 1A of the Orders will ensure that they are disclosed and can be taken into account by the Court in determining whether to adopt or vary the referee's report. 8Accordingly, I make the following orders: 1.The Order made by the Court on 14 June 2011 be amended: (a) By inserting Order 1A following Order 1, as follows: 1A The report to be delivered by Dr Ferrier is to comprise a schedule, listing or other report of transactions, assets and liabilities of each trust prepared by Dr Ferrier in such form as he considers appropriate, by reference to the documents which are submitted to him in the course of the reference in respect of each trust, and each such schedule is to identify any entry, transaction, asset or liability where adequate supporting or source documents were not submitted to Dr Ferrier to substantiate or support an entry, transaction, asset or liability. That report may include such additional materials as Dr Ferrier considers appropriate to explain his views. (b) Each of paragraphs 1-5 of the Schedule to the Order be amended by replacing the words "an account be taken" at the commencement of the paragraphs with the words "a report". 2. The costs of the motion should be costs in the cause in the Cross-Claim. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 April 2012