ASIC v Rich [2005] NSWSC 940 | Case summary

5934/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V JOHN DAVID RICH & ORS JUDGMENT 1 HIS HONOUR: This judgment relates to ASIC's applications for leave to amend the Fourth Further Amended Statement of Claim ("FFASC"), and its related applications for leave to read specified paragraphs of two affidavits filed and served out of time, namely paras 5 and 6 of Mr Carter's affidavit of 14 April 2004, and paras 7-9 of his affidavit of 8 September 2004, together with the annexed "Non-UK International Creditor analysis". It also deals with ASIC's application for leave to tender the documents exhibited to the September affidavit. 2 ASIC has sought, in AS 94, to make two amendments to the FFASC. One is to change the April EBITDA figure for the Australian digital and fixed wire business unit management accounts, shown on page 1 of Annexure E, from $(12,512) to $(8,067). The amendment is unopposed and leave to amend is granted. ASIC is ordered to pay the costs (if any) thrown away by the amendment. 3 The other proposed amendment relates to non-UK European creditors, and the amendment is opposed. Para 11 of the FFASC contends that in the period from 1 January 2001 to 17 May 2001 the financial position and performance of the One.Tel Group progressively deteriorated and by 28 February 2001, or alternatively by 31 March 2001, or alternatively by 30 April 2001, certain factual circumstances (pleaded in subparagraphs 11(a) and 11(b)) obtained. 4 The circumstances pleaded in subparagraph 11(a) are as follows: "(a) if the One.Tel Group was to continue its existing operations and meet current and reasonably foreseeable liabilities (excluding the capital expenditure referred to in (b)), it required as at 28 February 2001, 31 March 2001 and 30 April 2001 (and all dates in between and thereafter) sufficient cash injections to meet the cash requirements particularised …" in the subparagraph. 5 Then there are particulars of cash requirements, set out in the form of a table. In fact, this is the table contained in para 234 of Mr Paul Carter's principal report of 31 May 2001, one of the paragraphs of the report that I have rejected: ASIC v Rich [2005] NSWSC 650 at [226]. 6 The circumstances pleaded in subparagraph 11(b) are as follows: "(b) if the One.Tel Group was to continue its existing operations it would incur additional indebtedness to Lucent Technologies Australia Pty Ltd ('Lucent') of approximately $365 million for capital works relating to the construction of the infrastructure for its mobile telecommunications network." 7 The particulars of cash requirements are tabulated as at 28 February, 31 March and 30 April 2001, for "Australia" and "Group". The first half of the figures listed under these headings relates to the calculation of net cash inflow, and the second half relates to cash outflow. The calculation of cash inflow takes into account the overdue amounts owing to Australian and UK creditors, subtracting those amounts from the available cash balance to produce, for each of the three months, a substantial cash deficiency. The cash requirements, calculated as shown in the table, are said to be $270 million for February, $287 million for March and $309 million for April 2001. 8 These calculations take into account Australian and UK overdue creditors but they do not contain any figures for non-UK European overdue creditors. This was probably because the table was taken from the Mr Carter's principal report. Mr Carter explained in his principal report (para 88; and see paras 89 and 99) that he had not been provided with creditors' ledgers for international operations other than the UK, and therefore his calculations understated the amount overdue for international operations by the amount overdue to non-UK trade creditors for the international operations. 9 It appears that Mr Carter was subsequently provided with some documents relating to non-UK European creditors. In his 14 April affidavit he said that he had been given access to three documents. The first document, aged creditors ledgers for the France operations dated 11 June 2001, is not now tendered by ASIC (T 5682.34). The other two, a European aged creditor report dated 18 May 2001 and a schedule for the international operations Aged Liability for Carrier Services dated 6 March 2001, are in the Merged Tender Bundle at pages 1543-4 and 813-5 respectively. In his 8 September affidavit he said that he had been given access to aged creditor information for three months with respect to the Netherlands, and one Aged Creditors Listing for the France operations, and he exhibited those documents to his affidavit. He also referred to pages 813-5 and 1543-4 of the Merged Tender Bundle, documents he had mentioned in his 14 April affidavit. 10 In paras 5 and 6 of the 14 April affidavit he went no further than to say that the documents specified in that affidavit confirmed that One.Tel's non-UK international operations owed money to overdue creditors in an amount at month-end that he could not precisely quantify, and therefore that specified paragraphs of his principal report had understated the deficiency of the international operations' cash position by that amount [whatever it was]. However, in paras 8 and 9 of his 8 September affidavit and the annexed "Non-UK International Creditor analysis", he gave estimates for the month-end overdue balances for January, February, March and April 2001 for the Netherlands, France, Switzerland and Germany respectively, by reference to the documents specified in that affidavit. 11 For reasons given in my judgment of today's date (ASIC v Rich [2005] NSWSC 939) I held on 11 August (T 5688) that paras 5 and 6 (but not para 7) of the 14 April affidavit and paras 7-9 of the 8 September affidavit and the "Non-UK International Creditor analysis" are admissible and should not be excluded under s 135. One of the questions which now arise is whether leave should be granted to ASIC to read that material. 12 ASIC's solicitor gave notice, by facsimile letter dated 20 July 2005 (AS 86), that ASIC would seek to amend the FFASC in the manner proposed in AS 94. The proposed amendment would add the following line to the end of the particulars in para 11(a): "Additional cash requirements in respect of non-UK European overdue creditors (see Non-UK International Creditor analysis exhibited to affidavit of PR Carter sworn 8 September 2004): $(26) 28 February 2001 $(34) 31 March 2001 $(27) 30 April 2001" 13 There would be corresponding amendments to the end of S6(b), S11(b), S28(b) and S38(b) of the Schedule to the FFASC. The defendants have opposed the application for leave to amend. 14 The applications for leave to read evidence and for leave to amend are closely related, because the proposed amendment would make the overdue amount owing to non-UK European creditors a fact in issue and would expressly rely on the evidence in the "Non-UK International Creditor analysis" and hence paras 7-9 of the September affidavit, the subject matter of which is the same as the subject matter of paras 5 and 6 of the April affidavit. It would be possible for the court to conclude that the proposed amendment of the pleading should be permitted but that the April and September 2004 evidence should not be read, leaving ASIC to prove the amended allegations in some other way. It would also be possible (though "incongruous": see AS 96, para 26) for the court to hold that the proposed amendment should not be allowed but that ASIC should be permitted to read the April and September affidavits (which I have held to be relevant to the existing pleaded issues), or either of them. However, the applications relate to essentially the same question, whether ASIC should be permitted to develop a case about non-UK overdue creditors, which was raised late. The question was raised in very general terms in the April affidavit, without any alleged quantification, and then the September affidavit provided calculations and quantification, and the proposed amendment relates directly to those calculations. 15 In the circumstances, a decision that the late introduction of the September evidence, without adequate justification for the delay, would lead to injustice and unfair prejudice to the defendants implies that no further evidence on that subject matter will be allowed. As appears from the transcript of the hearing on 11 August (T 5688) and the discussion later in this judgment, I have decided that the central documents relied upon by Mr Carter for the purposes of his September affidavit are to be excluded from evidence. In the circumstances, denial of the application for leave to amend the pleading flows from denial of the application to introduce the September evidence. 16 Though I doubt there would be any justification for it, one could envisage an amendment to the pleading making an allegation, along the lines of paras 5 and 6 of the 14 April affidavit, to the effect that the non-UK international operations were indebted at month-end in February, March and April 2001 in unquantified amounts and therefore that the figures stated in the particulars to para 11(a) of the FFASC understated the cash position of the international operations by the same amount. But an integral part of the amendment proposed by ASIC is to go beyond such a general statement and assign figures to the monthly cash requirements in respect of non-UK European overdue creditors. If leave to adduce evidence to make good such a specific allegation is denied, the proposed amendment is unsupportable. 17 I considered the legal principles to be applied by the court, in the exercise of its discretion, when a party applies for leave to amend its pleading or to adduce new evidence at a late stage, in my judgment on ASIC's application to rely on Mr Smith's evidence (ASIC v Rich [2005] NSWSC 706, at [56]ff). The leading case is State of Queensland v JL Holdings Pty Ltd (1997) 187 CLR 146. My task is to deal with the present applications by exercising my discretion in accordance with those principles. Consistently with those principles, defendants have opposed the applications on the following five grounds: · they are brought very late in the proceeding; · they raise a substantially new and significant issue; · the granting of the applications would prejudice the defendants; · ASIC has not proffered specific evidence in support of the applications; · the granting of the applications would create injustice for the defendants. 18 The submissions of the parties on the application to amend the pleading, which apply mutatis mutandis to the application to read additional evidence, are found in DS 85, AS 96 and DS 87. Delay 19 I traced the chronology of this case in my judgment rejecting ASIC's application to tender new expert evidence by Mr Smith: ASIC v Rich [2005] NSWSC 706 (15 July 2005) at [3]ff. I directed ASIC to file and serve all affidavits upon which it intended to rely on or before 31 May 2002. While ASIC has tendered many affidavits made, filed and served subsequently, it has done so only by leave. In my 15 July judgment I noted (at [5]) that by early 2003 ASIC was pressing for hearing dates on the ground that it had filed and served most of its evidence by mid-2002. 20 The 14 April affidavit was produced well outside the time limit set by my pre-trial directions, but Mr Carter's evidence in paras 5 and 6 was of a fairly general kind, given in response to specified documents. It was the affidavit of 8 September that contained specific, quantified evidence leading to the eventual application to amend the pleading. 21 ASIC filed that affidavit in court on 13 September 2004, a week after the hearing had commenced, after senior counsel for ASIC indicated in opening on the first day of the trial that further information had become available as to non-UK creditors (T 76). Senior counsel for the defendants told the court that any application to rely on that material would be opposed (T 225). ASIC notified its intention to seek leave to amend its pleading only after 97 sitting days had passed, but in practical terms, it was clear enough from about 13 September 2004 that ASIC would seek to make out that there were overdue creditors in specified amounts for the non-UK European operations, and further, the passing of time between 13 September 2004 and 20 July 2005 is explained by the intervention of other issues (see AS 96, paras 5-7). In these circumstances, the further delay in notifying an intention to amend the statement of claim so that it would reflect the 8 September affidavit is not itself a significant matter of delay. But significant delay occurred between expiry of the timetable for ASIC to file and serve its evidence in May 2002 and the notification of its intention to adduce specific quantifying evidence from Mr Carter on 13 September 2004. This was after the trial had commenced, and after the court had made efforts, in response to the defendants' submissions, to ensure that ASIC had placed before the defendants the evidentiary foundation for the case they would be required to answer at the hearing (see T 226). 22 I do not mean to say that the introduction of new issues and fresh evidentiary topics is not to be permitted at all, after the commencement of the trial, but only that the delay is a relevant factor and a starting point for further analysis. Substantial new issue 23 The defendants submitted that the proposed amendment raises a very substantial new issue, alleging that One.Tel had extra cash requirements in February, March and April 2001 of very large amounts in each month, and that there were overdue non-UK trade creditors of approximately $29 million. This is evidence on a different scale from the more limited creditor correspondence involving the French or Netherlands businesses, which is addressed in AS 69 (see DS 87, paras 7-8). 24 Paras 5 and 6 of the 14 April affidavit amounted to evidence in unquantified terms that the cash deficiencies specified in the particulars to para 11(a) of the pleading were conservative because they did not take into account probable additional overdue creditors from the non-UK operations. That evidence did not add much to Mr Carter's principal report, in which he made it clear that he had not taken into account the non-UK operations in relevant respects. The evidence in the 14 April affidavit is consistent with the pleadings as they stand. It was the evidence in the 8 September affidavit that supported the substantial new allegations ultimately raised in the application to amend the pleading. 25 ASIC submitted (as 96, para 10) that adding the amount in question to the alleged cash requirements in the statement of claim would not significantly change the case which the defendants have to meet, because Mr Carter's September evidence is relevant to existing allegations in the statement of claim and is therefore material with which the defendants need to deal even if the amendment is not allowed. I have accepted ASIC's submissions as to the relevance of this material to the existing pleaded case (ASIC v Rich [2005] NSWSC 939). Prejudice to the defendants 26 The aged creditor records upon which Mr Carter based the opinions in his 8 September 2004 affidavit show substantial amounts in the over 120 day columns of the documents. In the case of the Australian Aged Creditors Reports, the defendants are endeavouring to demonstrate at the hearing that the old debt is likely to be made up of disputed invoices, which were not purged from the ledger, and that there were credit notes that had not been applied to the old debt. I touched upon this matter in my judgment on the paragraph-by-paragraph review of Mr Carter's principal report (ASIC v Rich [2005] NSWSC 650 at [80]), reaching the opinion, for the purposes of the issue at hand, that it was appropriate to infer that a substantial portion of the "overdue" creditor figure for the end of January "represented disputed claims or claims no longer payable but not yet purged from the ledger (because, for example, they awaited the issue of credit notes)". I held, however, that this did not destroy or undermine the overall thrust of Mr Carter's argument for his view that the cash and deficit position after deducting overdue creditors deteriorated month by month (at [81]). The court has subsequently heard further evidence on this general question during the cross-examination of Samantha Randall (T 4758; T 4760). 27 The defendants noted (DS 85, para 7) that the extracts from Aged Creditors Reports referred to by Mr Carter in para 8 of his 8 September affidavit (and relied on by him for the purposes of his opinions), like the Australian Aged Creditors Reports, contain substantial amounts in the over 120 day columns. They submitted that in the case of the overseas documents, their ability to demonstrate any likelihood that the old debt represented disputed invoices not purged from the ledger was hampered because of the limited nature of the documents. They developed these submissions in paras 8-10 of DS 85, with which I agree. 28 The Aged Creditors Reports for the Netherlands and France are incomplete. For two of the reports, only the final page has been produced. The documents are in a different format from the Australian reports that are in evidence, and show only summary details in relation to each creditor. The information is not sufficient to allow the defendants to establish the nature of the old debt by reference to particular creditors. Additionally, the defendants have neither the I:drive nor the Adept ledgers for France and the Netherlands, and therefore they cannot go through an exercise similar to the one pursued with Ms Randall, whereby creditors ledgers and Aged Creditors Reports were put to the witness. There are no witnesses to be called either from the France or Netherlands business, but the deficiency in information and documents would prevent the defendants from pursuing similar lines of cross-examination with Mr Weston and Mr Werner, who had some knowledge of the European businesses. 29 The defendants submitted (DS 85, para 11) that if ASIC were permitted to raise the new issues identified in the proposed amendments to the pleading and in paras 7-9 of the 8 September affidavit, the defendants would seek further discovery in relation to the Netherlands and France, including: · discovery of all available Aged Creditors Reports for those countries from at least 1 January 2000 to 30 June 2001 (including complete copies of the reports for the Netherlands as at 31 January and 31 March 2001, for which only the final page has been produced); · electronic copies of the Adept creditors ledgers for the Netherlands and France; · communications between One.Tel in both countries and major creditors appearing on the Aged Creditors Reports upon which ASIC relies; and · documents relevant to the issue of reliability and use made of the Aged Creditors Reports and ledgers, including any consideration given by internal or external auditors as to the accuracy of that information and its reconciliation and purging of redundant entries. The defendants contended that to be of utility, this discovery should occur before they were required to cross-examine Mr Weston and Mr Werner, but at the time when that submission was made (29 July 2005) arrangements had already been made to hear the evidence of Mr Weston and Mr Werner in London during the period from 24 August to 7 September, and as a practical matter discovery of the nature contemplated by the defendants' submission could not occur within that time frame. 30 It is true, as ASIC pointed out (AS 96, paras 12-16), that access to all available documents relating to the international subsidiaries of One.Tel has been a matter in issue since at least December 2002. On 12 December 2002 the defendants' solicitors wrote to ASIC (page 244 of Exhibited JK 1 to the affidavit of Ms Kelly of 21 March 2003) asserting that the defendants would require access to all relevant documents including financial records of the international subsidiaries, and claiming that representatives of Mr Packer and/or PBL had travelled to Europe and brought back a significant quantity of records from the international subsidiaries. The letter asserted that ASIC should give discovery of all relevant documents including relevant financial records of the international subsidiaries. The defendants pursued these matters in their application for supplementary discovery, by Amended Interlocutory Process dated 27 March 2003 supported by Ms Kelly's affidavit. In consequence, the court made orders on 8 April 2003 requiring ASIC to make efforts to obtain documents relating to the European operations. 31 It seems to me that the history I have recounted in the last paragraph does not derogate from the defendants' argument. There can be no suggestion that they have sat on their hands and failed to pursue further discovery of the international materials. They made it clear, as soon as ASIC proposed to adduce the evidence in the September affidavit, that they would oppose any application for leave to introduce that evidence (and, by implication, to introduce further issues with respect to the non-UK European overdue creditors by amendment of the pleading). 32 The defendants' contention is that, although there has been a process of discovery in respect of relevant materials, there are reasons for thinking that an additional discovery process, especially one employing the assistance of the relevant overseas regulator, might yield better results. In their submission, it would be necessary for them to pursue that additional process if ASIC's applications were granted. The applications have come to be dealt with only now. The fact that they responded to the evidence in the April affidavit, served well before the commencement of the hearing, did not mean that they were precluded from responding to the September affidavit simply by making it clear that any application to read it would be opposed (cf AS 96, para 21). 33 In my judgment with respect to creditor communications published on 25 May 2005 ([2005] NSWSC 491), I reviewed the history of ASIC's response to my orders made in April 2003, and I concluded that ASIC had made what I described, at [40], as a "bona fide and substantial effort not only to comply with the court's orders but also to respond to subsequent demands for information by the defendants' solicitor". I held that the deficiencies in information supplied to the defendants appeared to be attributable to difficulties encountered by ASIC in extracting information located overseas. ASIC submitted (AS 96, para 18) that, consistently with the approach taken in the 25 May judgment, I should conclude that all reasonable steps have been taken to provide discovery in relation to the financial position of the international subsidiaries, and that any remaining deficiencies would not be a basis for precluding ASIC from amending its pleading and reading the additional evidence in the September affidavit. 34 I accept, consistently with the findings in my 25 May judgment, that ASIC has made a bona fide and substantial effort to provide the information that has been sought, but I am not convinced that ASIC has so far taken all the steps that it might be reasonable to expect it to take if the applications were to be granted and the cash position of the non-UK European operations were to become a directly pleaded issue. In my judgment, there is a prospect that additional material information would be uncovered if such further discovery were ordered. As the defendants submitted (DS 85, para 11b), it is not clear, from the evidence I have seen (reviewed in the 25 May judgment at [32]-[35]), whether electronic copies of the creditors ledgers no longer exist, or the purchaser of the business, Scarlet NV, is not willing to supply them to ASIC. To the extent that there may be an unwillingness or reluctance on the part of Scarlet NV to make information available, there is a non-negligible possibility that ASIC might be able to overcome it by seeking the co-operation of the relevant European regulator (see Australian Corporation Law (Butterworths, looseleaf), at [15.1.0060] note 10; [15.1.0165]). 35 I am satisfied that, if leave were granted to ASIC to read paras 7-9 of the 8 September affidavit and to amend the pleading in the manner contemplated: · it would be reasonable and appropriate for the defendants to seek additional discovery, generally of the nature outlined in para 11 of DS 85; · that process would need to be carried out before cross-examination of Mr Weston and Mr Werner, to give the defendants the opportunity to develop in cross-examination a case about old debts; · accordingly fairness would dictate the postponement of the taking of evidence in the United Kingdom, a consequence likely to involve substantial cost and severe inconvenience for the parties and the court. 36 These matters constitute, when considered together, a substantial case of unfair prejudice, of a kind making it justifiable and appropriate to decline leave to ASIC to read paras 7-9 of the 8 September affidavit, or any similar evidence purporting to quantify non-UK overdue debtors, and to decline ASIC's application for leave to amend. However, in my view these considerations do not apply to paras 5 and 6 of the 14 April affidavit, because of their more general nature and consistency with the existing pleading. Lack of evidence to support the application 37 The defendants submitted (DS 85, paras 13-16) that no explanation had been given by ASIC for the lateness of the applications to read the 8 September affidavit and amend the pleading. When the 8 September affidavit was filed in court, on 13 September 2004, the defendants submitted (T 225) that there should be a formal application seeking leave supported by affidavit evidence explaining why the application had occurred after the commencement of the trial, notwithstanding the court's pre-trial directions. That has not occurred. ASIC informed the court that the Aged Creditors Reports had been discovered "some time ago" (T 242-3). 38 In response, ASIC submitted (AS 96, paras 23-24) that the circumstances leading to the application had been explained by the existing evidence. In my opinion the existing evidence does not satisfactorily explain ASIC's delay, for a period of over two years from the expiry of the initial pre-trial directions, in coming forward with the evidence about non-UK European creditors contained in the September affidavit. It appears that Mr James Elliott of Melbourne counsel, acting for the Packer/PBL/CPH interests, visited Europe and collected a substantial quantity of documents, with assistance from solicitors from Minter Ellison. Ms Reynolds of PricewaterhouseCoopers gave evidence that she visited Mr Elliott's chambers in Melbourne and identified some documents which ASIC subsequently arranged to have copied and made available to her (T 1068-9). She said that PwC had for a long time been asking ASIC for creditors ledgers for the international operations other than the UK, and that ASIC's counsel spoke to Mr Elliott about whether those records existed, and subsequently documents (presumably the ones identified in para 8 of Mr Carter's September affidavit) were provided by ASIC to PwC (T 1070). 39 This evidence gives a sketchy and incomplete picture, which does not fully and satisfactorily address why ASIC did not succeed in obtaining the documents from some source other than Mr Elliott at a much earlier time (cf 25 May judgment, at [35]), and why ASIC appears to have procured them from Mr Elliott belatedly. Additionally, there appears to have been a substantial interval of time between ASIC's acquisition of the documents, which seems to have happened in June 2003 according to the affidavit of Jane Williams sworn on 1 September 2003, and the completion of Mr Carter's expert evidence about them. 40 The absence of formal applications supported by affidavit evidence is not fatal to ASIC's applications to read the 8 September affidavit and amend the pleading, but in the absence of clear and thorough evidence the court is not in a position to decide that the delay that has occurred is justifiable and that the prejudice that the defendants would suffer if leave were granted would be unavoidable. Injustice to the defendants 41 The defendants submitted (DS 85, para 17) that it would not be unjust to ASIC to refuse the applications because the evidence in paras 7-9 of the 8 September affidavit and the proposed pleading amendment are not a necessary part of the ASIC case. ASIC's response (AS 96, para 25) was to say that the evidence about non-UK European overdue creditors is important evidence even as to the case presently pleaded, and the amendment should be allowed so as to permit the court to ascertain the true facts regarding One.Tel's financial position in 2001. Of course, the issue to be resolved is whether there are elements of prejudice and unfairness sufficiently substantial that relevant new evidence should be excluded. 42 The defendants contended (DS 85, para 18) that the injustice they would suffer if the applications were granted would be palpable, because they prepared their case on the basis of the pleaded issues. The documentation that would be necessary for them to deal with the amendment is not readily available and further discovery steps (noted above) would be needed and would take considerable time. 43 They also submitted that their accounting expert had only attended to the preparation of his report in response to the Carter Report served prior to the commencement of the proceedings, and it would be necessary to instruct him to undertake further work to deal with the additional evidence (referring to T 4896). ASIC contested the latter submission (AS 96, para 27), submitting that the state of indebtedness of the international operations to creditors was not necessarily a matter for expert evidence, and the question whether to respond to the new evidence by adducing expert opinion evidence was a matter for the choice of the defendants. But ASIC has itself elected to deal with the new documentary evidence by seeking Mr Carter's expert opinions on it, and in the circumstances it would be reasonable and appropriate for the defendants to commission their expert to respond. 44 It seems to me there would be a significant element of unfairness to the defendants in allowing ASIC's applications, except for the application to read the 14 April affidavit. This is not simply because the defendants would have to adjust their preparation if the new evidence and amended pleading were introduced. Granting the applications would mean that the defendants would, as a practical matter, find it reasonably necessary to seek further discovery, leading to the deferral of the taking of evidence in the United Kingdom, and consequently additional costs. These consequences would arise at a time well after ASIC was required by the court's directions to file and serve its evidence, and after the commencement of the hearing, and in the absence of an adequate explanation by ASIC as to the reasons for delay. In the circumstances, my view is that such unfairness would not be compensated by an appropriate costs order. 45 The "injustice" ground merges into the "unfair prejudice" ground and the combined effect of the defendants' submissions on these two matters was to persuade me that the applications for leave to read the 8 September affidavit and to amend the pleading should be rejected, although as I have said, the application to read the 14 April affidavit succeeded. A particularly pressing matter was that these questions arose for consideration after the timetable for the taking of English evidence had been settled and in circumstances where the outcome of the applications was likely to have a significant influence on the defendants' preparation for cross-examination of at least two of the English witnesses. Rejection of documentary evidence 46 My pre-trial directions made on 7 October 2003 required ASIC to advise the defendants on or before 7 November 2003 whether they wished to add further documents to the tender bundle, and also required it to serve a copy of the tender bundle on the defendants by 2 May 2004. Having regard to my directions, the tender by ASIC of additional documents after commencement of the trial required the court's leave. 47 At the hearing on 11 August 2005, I initially informed the parties that I would deny ASIC's application for leave to read new evidence, both with respect to paras 5 and 6 of the April affidavit and paras 7-9 and the schedule to the September affidavit (T 5643). I also announced that the application to amend the pleading was denied (T 5643). Then senior counsel for ASIC asked me to clarify that the documents upon which Mr Carter had based the opinions expressed in his April and September affidavits were not excluded. That led to a debate (T 5644ff), the outcome of which was a ruling by me that leave to tender the Netherlands Aged Creditors Bundle and the France Aged Creditors Listing, exhibited in each case to Mr Carter's September affidavit, was denied (T 5688). The France Operations aged creditors ledgers dated 11 June 2001, identified in para 5 of Mr Carter's April affidavit as SO T014016, was not pressed. The European Aged Creditors Report dated 18 May 2001 (SBA 287988, MTB 1543-4) and the schedule for the international operations Aged Liability for Carrier Services dated 6 March 2001 (SBA 319633, MTB 813-5) were received in evidence. 48 My opinion, when announcing my decision concerning the documents, was that the considerations which led to the rejection of ASIC's applications for leave to read paras 7-9 and the schedule to the September affidavit, and to amend the pleading, were also the basis for denying ASIC leave to tender the documents exhibited to the September affidavit, upon which Mr Carter's evidence was based. The documents at MTB 0813-5 and 1543-4 were not excluded because those documents were in the tender bundle and no application for leave was needed for their tender. No objection was made to the documents until 11 August, and the only reason why they were not received into evidence some time ago was that there were remaining issues about a small number of documents, which have delayed the tender of the Merged Tender Bundle as a whole. Conclusions 49 The conclusions that I reached 11 August 2005 may be summarised as follows. Leave to read paras 7-9 and the non-UK International Creditors analysis in Mr Carter's affidavit of 8 September 2004, and to tender the Netherlands Aged Creditors Bundle and the France Aged Creditors Listing which were exhibited to the affidavit, was denied. ASIC's application for leave to amend its pleading (the FFASC) in the manner identified in AS 94, was also denied. As to Mr Carter's affidavit of 14 April 2004, para 7 is inadmissible, but leave is granted to ASIC to read paras 5 and 6. As to the documents referred to in para 5 of the April affidavit, SO T014016 is not pressed and MTB 0813-5 and 1543-4 are not excluded from evidence.

ASIC v Rich

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Judgment (9 paragraphs)

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