Barescape Pty Ltd & Anor v Bacchus Holdings Pty Ltd & Anor

Judgment 1In these proceedings, the Cross-Claimant, Bacchus Holdings Pty Ltd as trustee for the Bacchus Holdings Trust seeks leave to read the affidavit of Mr Paul Siderovski sworn 12 September 2011. It appears that Mr Siderovski's affidavit was served on the Plaintiffs/Cross-Defendants on 12 September 2011, the thirteenth day of the hearing. That application is opposed by the Plaintiffs/Cross-Defendants on several grounds. 2It must be acknowledged that the application to read Mr Siderovski's affidavit is made rather late, after the Plaintiffs/Cross-Defendants have completed their evidence-in-chief and their witnesses have been cross-examined and after the Plaintiffs/Cross-Defendants have cross-examined several of the Cross-Claimant's witnesses. 3In determining this application, the Court must, by s 56 of the Civil Procedure Act 2005 (NSW), have regard to the overriding purpose being the just, quick and cheap resolution of the real issues in the proceedings. Section 57 in turn deals with case management and requires the practice and procedure of the Court to be regulated to ensure the attainment of the objectives specified in the section, including the just determination of the proceedings, the efficient disposal of the court's business, the efficient use of available judicial and administrative resources and the timely disposal of the proceedings and all other proceedings in the Court at an affordable cost. Section 58 requires the Court, in dealing with amendments, to seek to act in accordance with the dictates of justice. Section 61 allows the Court to give such directions as it considers appropriate (whether or not inconsistent with the rules of court) for the speedy determination of the real issues between the parties to the proceedings and to give such directions with respect to the conduct of the proceedings as it considers appropriate. 4It should be recognised that there is a potential prejudice arising from the late service of affidavits. In Mobile Innovations Ltd v Vodafone Pacific Ltd [2003] NSWSC 309, Einstein J provided a comprehensive summary of the issues. His Honour's decision was given after the introduction of the just, quick and cheap resolution of the real issues requirement in the Supreme Court Rules 1970 (NSW) although prior to the introduction of sections 56-59 of the Civil Procedure Act . His Honour pointed to the fact that the failure to serve an affidavit of a key witness in accordance with the court's directions may mean that the cross-examiner will cross-examine other witnesses without the knowledge that the key witness may have been available for cross-examination. His Honour noted that this may be inconsistent with "fundamental forensic fairness" and that parties should be permitted to reach forensic decisions in an informed fashion. His Honour also observed at [30] that the purpose of the Court's pre-trial directions is: "[T]o ensure as part of the administration of justice, regularity in the regular conduct of the proceedings, but it is also importantly intended to ensure that each party is properly, and in a timely fashion, apprised of the case which it is to be required to meet." 5I respectfully adopt his Honour's observations although I note that they serve as matters to be taken into account in the context of ss 56-59 of the Civil Procedure Act and do not determine the result in any particular case. 6In this matter, it is plain that Mr Siderovski is a significant participant in events. He was, at various times, the accountant to the Plaintiffs/Cross-Defendants, the accountant to the restaurant partnership which is the subject of the proceedings, the accountant to Mr Higgins (the principal of the Cross-Claimant), and the person who prepared a valuation of the restaurant on termination of the partnership under the terms of the Partnership Deed. It is self-evident that the Cross-Claimant previously made a decision not to call Mr Siderovski, which they now seek to reverse. On the other hand, the Plaintiffs/Cross-Defendants have repeatedly emphasised their intent to rely on a Jones v Dunkel ((1959) 101 CLR 298) inference in respect of the failure to call Mr Siderovski (for example, at T 884.11), and have raised several matters as to Mr Siderovski, including suggestions of a lack of impartiality and, possibly, the existence of a concealed financial interest in the restaurant. The Plaintiffs/Cross-Defendants are entitled to be concerned as to any prejudice arising from the late service of Mr Siderovski's affidavit. However, there remains a significant degree of tension between their strong criticism of the fact that Mr Siderovski was not called to give evidence and their equally strong opposition to the fact that he is now to be called to give evidence. 7The Plaintiffs/Cross-Defendants contend that they have made tactical decisions on the basis that Mr Siderovski would not be called. Justice Einstein drew attention to the potential significance of such decisions in Mobile Innovations Ltd v Vodafone Pacific Pty Ltd . However, the particular example to which the Plaintiffs/Cross-Defendants refer is not one that is suggestive of a significant tactical decision made by reference to Mr Siderovski's absence and no other examples of such decisions have been identified. Any prejudice to the Plaintiffs/Cross-Defendants can be addressed by granting leave to recall their witnesses to the extent necessary and a term requiring the Cross-Claimants to make its witnesses available for further cross-examination, if required. Mr Kelly SC, on behalf of the Cross-Claimants has fairly acknowledged that the Cross-Claimants would not oppose such terms. 8The Plaintiffs/Cross Defendants also contend that a large part of Mr Siderovski's evidence is of an expert nature. It seems to me that that evidence is, in fact, largely in explanation of matters already in evidence and is not, in substance, expert evidence. If, contrary to my view, UCPR r 31.28(4) would otherwise apply to exclude the evidence, then the Court may grant leave for that evidence to be called under s 60 of the Civil Procedure Act , notwithstanding that rule, if it is otherwise satisfied that leave should be granted and I would grant such leave. 9The Plaintiffs/Cross Defendants also point to the difficulty of preparing cross-examination and to the risk that the period required for lay evidence will be extended. That prejudice can be met by either deferring the cross-examination of Mr Siderovski to the recommencement of the hearing in early 2012 or, alternatively, permitting the cross-examination to commence today with leave to the plaintiff to conclude it in early 2012 if so advised. Mr Kelly SC has, again, fairly indicated that the Cross-Claimants would not oppose that an approach. 10Having regard to ss 56-59 of the Civil Procedure Act , to the matters identified by Einstein J in Mobile Innovations Ltd v Vodafone Pacific Pty Ltd to which I have referred above, and to the significance of Mr Siderovski's role and the weight which has been placed by the Plaintiffs/Cross-Defendants on the fact that he is not to be called, I have concluded that the interests of justice require that the Cross-Claimants be granted leave to read Mr Siderovski's affidavit. I grant that leave on terms that, if the Plaintiffs/Cross Defendants wish to have cross-examination deferred to the recommencement of the matter in early 2012, they may do so, and if they wish to commence that cross-examination today and continue it in early 2012, that option is also available to them. The Plaintiffs/Cross Defendants will have leave to recall witnesses if necessary in respect of matters which are the subject of Mr Siderovski's evidence and the Cross-Claimants will be required to make their witnesses available for further cross-examination in respect of those matters if required. 11I had considered whether I should also impose a term of the order that the Cross-Claimant pay the costs thrown away by late service of Mr Siderovski's affidavit. In my view, there is a strong case for the Plaintiffs/Cross-Defendants to be made whole, to the extent that the Court may do so, for any additional costs which may be incurred as a result of the late service of Mr Siderovski's affidavit and the steps which they will need to take in response. However, Mr Kelly SC fairly submits that the Court would be better placed to make an order dealing with costs once it has had the opportunity to see the way in which matters unfold and, in particular, the extent of any inconvenience which may ultimately arise from the calling of Mr Siderovski at this stage. I therefore reserve costs of this question with liberty to the Plaintiffs/Cross-Defendants to reopen the matter once the extent of any costs thrown away has been made clearer.