In a decision on 24 December 2018, Federal Court Judge Mark Moshinsky dismissed an application by Deloitte partners to be excused from complying with a production order of audit files when it was the auditor of Hastie before the construction firm went into voluntary administration in May 2012.
The Deloitte partners claim that they are unable to produce the documents because Reuben Saayman – one of the partners responsible for the relevant engagements – had somehow gained custody of the documents and would not release them to the “uninvolved partners”.
Mr Saayman had earlier successfully claimed the privilege against self-incrimination and the privilege against exposure to penalties, leaving the uninvolved partners responsible for producing the documents.
According to evidence heard in court, Mr Saayman had obtained the original files for the relevant engagements, both hard copy and soft copy, despite it being secured by swipe card access and limited to Deloitte’s in-house lawyers in the “litigation room” in the firm’s Sydney offices.
Mr Saayman also managed to obtained custody of a laptop computer containing a copy of many of the relevant documents.
It is understood that Mr Saayman is based in Brisbane.
“The circumstances described above are extraordinary and troubling,” said Justice Moshinsky.
“The documents were located in the secure Litigation Room, access to which was limited to DTT’s litigation team by a swipe card access system. Yet somehow the documents have been obtained by Mr Saayman and he is refusing to release them.
“The circumstances appear to be designed to bring about a situation where the uninvolved partners can argue (as they have on this application) that they are unable to produce the documents in accordance with their discovery obligations,” he added.
“Remarkably, very little, if anything, has been done to investigate how Mr Saayman obtained the documents.”
“If the events were so designed, and involved not just Mr Saayman but others as well, it may well be the case that the uninvolved partners can produce the documents.”
The production order had required Deloitte to produce audit files and working papers of Hastie for the 2010 and 2011 financial years, among other documents.
“Deloitte is in the process of reviewing the judgment and will consider our options,” a Deloitte spokesperson told Accountants Daily.