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Judgment - EX TEMPORE Adjournment application 1By originated process filed on 23 May 2013, the Plaintiffs, Mr Steven Parbery and Mr Marcus Ayres in their capacity as joint and several receivers of certain companies, including Aldonet Pty Limited (administrators appointed) (receivers and managers appointed)("Aldonet") bring proceedings against Mr Christopher Crawley and Ms Judith Crawley. The issues in those proceedings have narrowed over time, but presently include at least claims under ss 420 and 431 of the Corporations Act 2001 (Cth) for delivery up and inspection of certain books and records of the relevant companies. 2The Plaintiffs also seek a declaration that a Sunseeker motor vessel ("Sunseeker") is an asset of Aldonet and is charged property the subject of a fixed and floating charge dated 29 January 2009 granted in favour of the Australia and New Zealand Banking Group Limited ("ANZ Bank"); an order that Mr and Mrs Crawley be restrained by themselves, their servants or agents from disposing, transferring, encumbering or otherwise dealing with the Sunseeker; and an order that the Defendants do all things necessary to deliver up to the Plaintiffs' possession of the Sunseeker and all books and records in relation to it, including but not limited to any documents of title in respect of it. 3When the matter was listed before me this morning, an initial issue arose as to whether Vensel Pty Limited as Trustee for the Christopher Crawley Family Trust No 1 ("Vensel") should be joined as party to the proceedings, where an affidavit of Mr Crawley had recently been served by the Defendants stating that Vensel owned the Sunseeker. I pause here to note that the shares in Vensel are held by Mr and Mrs Crawley and Mr Crawley is a director of Vensel. That joinder application was originally opposed by the Defendants, on the basis that Vensel had not been served with the proceedings. Ultimately, the Defendants' indicated that they would consent to such a joinder and that the Counsel and solicitors who presently appear for the Defendants would also appear for Vensel. 4However, by the time the defendants took that position, a further issue had emerged and the Plaintiffs sought an adjournment of the proceedings. It appears the documents were produced by the Defendants in answer to a notice to produce this morning, which indicated that the Sunseeker had been transferred to Vensel in a transaction to which I will refer below. The Plaintiffs now seek to adjourn the hearing to consider whether to advance, an attack on that transaction or claims against Mr and Mrs Crawley arising out of that transaction. That application is opposed by the Defendants, who contend that the proceedings should continue today. 5It is necessary to say something further as to the chronology of events, as follows: (a) By a mortgage debenture dated 29 January 2009 Aldonet charged its undertaking and assets, including all assets held as trustee, to the ANZ Bank. That charge extended to all books of Aldonet, and the Plaintiffs contend that some of the documents which have become controversial would fall within that charge as books of Aldonet. It is difficult to see that a bill of sale that disposed of the Sunseeker (if, which has not been established) it was in Aldonet's possession, would not fall within the scope of the charge. (b) Financial records and tax returns of Aldonet, as late as 31 March 2013, record it as having an interest of some kind in the Sunseeker, so far as depreciation and expenses were recorded in those records in respect of the Sunseeker. I should add that those financial records were tendered with a limitation that they only proved the Plaintiffs' knowledge, and not the underlying fact. Even with that limitation, they nonetheless prove the basis upon which the Plaintiffs could reasonably have understood that the Sunseeker was in fact the property of Aldonet, so far as it was claiming depreciation and expenses in respect of the vessel in its tax returns and recording the vessel as an asset in its financial records. (c) The Plaintiffs were appointed, inter alia, as receivers to Aldonet in April 2013. An initial application to the Court was made on 19 April 2013, not then extending to any issue in respect of the ownership of the Sunseeker. (d) By letter dated 24 April 2013, the solicitors for the Plaintiffs raised with Mr and Mrs Crawley's solicitors that it appeared that another entity, J & J O'Brien Pty Limited, had owned the Sunseeker and transferred it to Vensel on or about 27 December 2012. Mr and Mrs Crawley's solicitors responded, on the same date, that J & J O'Brien had never owned a boat, including the Sunseeker, without making any further comment as to which entity had owned the Sunseeker which entity now owned it. (e) By letter dated 13 May 2013, the Plaintiffs' solicitors requested confirmation from the solicitors for Mr and Mrs Crawley that the Sunseeker was the property of Aldonet. I have been informed that no response was received, and the contrary was not suggested by Mr and Mrs Crawley. (f) On 20 May 2013, Mr and Mrs Crawley gave undertakings to the Court that they would not dispose of, encumber or otherwise deal with the Sunseeker. No comment was made on that occasion as to the ownership of the Sunseeker, or to indicate whether Aldonet, on the one hand, or Vensel on the other, were the owner or whether Vensel might be a proper party to the proceedings. At the same time, those undertakings were not given at a time that it was suggested that either Mr or Mrs Crawley were personally the owner of the Sunseeker, and could only operate so far as they were directors or officers of an entity that was. It might nonetheless be suggested that it would have been helpful for the Court to have been informed, on that occasion, that there was at least an issue as to whether the entity contended to be the owner of the Sunseeker should be joined as party to the proceedings. (g) On 22 May 2013, the Plaintiffs' solicitors issued a notice to produce requiring the production of documents relating to the Sunseeker, seeking inspection of those documents by 10.00am on 24 May 2013, in circumstances that this matter was listed for hearing on 29 May 2013. Mr and Mrs Crawleys' solicitors responded pointing, fairly, to the amount of work involved in the conduct of the proceedings and indicating that they expected to be able to provide inspection of those documents by 11.00am on 27 May 2013. As I have noted, the documents were in fact produced this morning and they included a bill of sale recording the transfer of the Sunseeker by Aldonet to Vensel for an amount of $1 on 20 July 2011. 6Mr and Mrs Crawley contend that the bill of sale is a matter of public record and on the shipping register, but it does not follow that it would not have been appropriate, in these circumstances, for the Defendants to disclose a matter which would otherwise plainly catch the Plaintiffs by surprise, if it emerged in the course of the hearing today. 7It is important to emphasise that the Court of Appeal has several times made clear, in strong terms, that the "ambush theory of litigation is dead in this State": Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; (2001) 53 NSWLR 116; Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206; (2008) 73 NSWLR 653. In White v Overland [2001] FCA 1333 at [4], approved by the Court of Appeal in Nowlan v Marson Transport Pty Ltd above at [28], Allsop J (as his Honour then was) observed at [4] that: "by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between the parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are.... [I]f something has been said, where it is evident, or indeed suspected, that the other side is proceeding on a basis of misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public an private) likely to be wasted by confusion in litigation will mandate that a party, through his or her representative, ensure that the other side is not proceeding on a misconception or that the other side does appreciate something that has been said. Litigation is not a game. It is a costly and stressful, though necessary, evil...[N]o one's interests are advanced by litigation proceeding on assumptions which are seen or suspected to be false." 8In Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Ltd & Ors [2008] NSWCA 243 at [160] Allsop J (as his Honour then was) again emphasised that: "it cannot be emphasised too strongly that it is the responsibility of the parties, through their legal representatives, to exercise a degree of cooperation to express the issues for trial before and during trial. Such cooperation can now be taken as an essential aspect of modern civil procedure in the running of any civil litigation including hard fought commercial cases." These observations were in turn approved once more by the Court of Appeal in Sydney South Western Area Health Service v MD [2009] NSWCA 343; (2009) 260 ALR 702 at [53]-[54]. 9In this case, it must have been plain that the Plaintiffs were proceeding in ignorance of the fact, known to the Defendants, that there had been a transaction, or an alleged transaction, involving a disposition of the interest in the Sunseeker in July 2011, which was critical to the question of ownership of the Sunseeker, which was in turn one of the central issues in the proceedings. The focus on matters such as undertakings not to dispose of the Sunseeker emphasised the importance of that issue. It must have been equally plain that, had a matter emerged for the first time in the midst of the hearing today, it would have caught the Plaintiffs by surprise. It is not necessary to reach a finding, and I do not reach a finding as to whether the lack of earlier reference to this matter was advertent or inadvertent. It is sufficient that, whatever its intention, it would have had the result that the proceeding today would potentially have commenced on a false basis, and, possibly, that the Plaintiffs would be shut out of causes of action that were properly available to them. 10The question then arises as to whether the proceedings should be adjourned, as the Plaintiffs now contend, so as to allow them the opportunity to consider the matter which has emerged this morning and to bring any claims which they seek to bring in respect of the relevant transaction. In determining the adjournment application, I must have regard to the obligations imposed by ss 56-60 of the Civil Procedure Act 2005 (NSW) and specifically the overriding purpose around the objectives of the case management. Mr Grieve QC, who appears for the Defendants, observed in the course of submissions this morning that different views were on occasions taken as to s 56 of the Act. It does not seem to me that there is great room for different views as to that section, since it is a statutory provision binding upon the Court and the parties to litigation. 11That section in turn provides that the overriding purpose of the Act and the rules of the Court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in dispute in the proceedings. The Court is required to give effect to the overriding purpose when it exercises any power given to it by the Act or the rules of Court. Section 58 provides that the Court, in deciding whether to make any order or direction for the management of the proceedings, must act in accordance with the dictates of justice, and must have regard to the provisions of the ss 56-57, and may have regard to specified matters in that regard. The scope of these provisions were considered by the Court of Appeal in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230, in particular by Allsop J (as his Honour then was) at [37], and I have had regard to the principles set out in that decision in determining the adjournment application. 12In the present case, it seems to me plain that there must be an adjournment of the proceedings, in order to allow the Plaintiffs a fair opportunity to address the new matter which has emerged this morning. If the Court were to proceed to a hearing today, the matter would be determined in circumstances that the Plaintiffs had been deprived of an opportunity to challenge the July 2011 transaction, which might otherwise properly be available to them. There is, it seems to me, also a significant risk that an Anshun estoppel would arise, so far as the Plaintiffs seek to proceed on a final basis against Mr and Mrs Crawley, and it could be put that any claim against them in respect of the July 2011 transaction ought to have been raised at the hearing today if it was to be raised at all. If Vensel were joined as a party to the proceedings today, the same proposition could be put in regard to Vensel. If it were not joined as a party to the proceedings today, it is likely to be difficult to reach any effective resolution of the matter in dispute, where Vensel is said now to be the owner of the Sunseeker. 13I have considered whether it would be possible to split issues, so as to determine the questions as to ownership of the Sunseeker and access to documents which arise, but I accept the Plaintiffs' submission that that course is also not practicable where it is likely that Mr Crawley will need to be cross-examined in respect of the application, and it is preferable that he be cross-examined as to all issues at the same time. 14In these circumstances, I am satisfied that the hearing today is not fairly able to proceed and the matter will need to be relisted for a further hearing. It is necessary, in my view, to make directions, which may include directions that the proceedings continue on pleadings, so as to ensure that any further hearing does not involve difficulties of the kind which have arisen this morning. Costs 15The Plaintiffs seek an order that the Defendants pay the costs of today, on the basis that the hearing today has been thrown away by reason of the matters to which I have referred above. 16Mr Grieve responds, on behalf of the Defendants, that the proceedings were commenced on 19 April 2013 in circumstances that the Plaintiffs asserted the urgency of the production of documents. Mr Grieve contends that the Defendants were then in the process of producing those documents. It is not necessary or appropriate for me to determine that matter, first where the evidence about it has not been read before me and second, where the question that I am asked to determine is the costs of today and not the costs of the proceedings generally. 17Mr Grieve contends that the Plaintiffs were aware that Vensel was the owner of the vessel and that there was "nothing secret about that" and that what has occurred today is that the Plaintiffs have come forward and said that they were not ready to proceed. I do not consider that that characterisation is consistent with the facts as I have set them out above. First, the proposition that the Plaintiffs were aware that Vensel was the owner of the vessel, so far as it relies on a letter sent by the Plaintiffs' solicitors on 24 April 2013 raising a question as to an apparent sale by an entity J & J O'Brien Limited to Vensel faces the difficulty that the Defendants' solicitors have responded that J & J O'Brien had never owned a boat, which rather raises the question how Vensel could have acquired from J & J O'Brien a boat that J & J O'Brien had never owned. So far as it is suggested that the Plaintiffs should have followed up, asking who had owned the Sunseeker or who now owned the Sunseeker, they in fact did so by letter dated 15 May 2013, to which no response was received. 18It seems to me that the fair characterisation of what occurred today is that the Plaintiffs were ready to proceed, on the basis of the facts as they understood them, until a further fact emerged. That fact was not only the sale of the vessel by Aldonet to Vensel but, significantly, the terms on which that sale had occurred, which plainly raised issues to which I referred above. Mr Grieve also contends that the Plaintiffs are "architects of their own misfortune" so far as they had sought to raise an issue concerning the ownership of the Sunseeker in the proceedings. Again, I find it difficult to accept that characterisation. Where there is plainly a dispute as to ownership of the Sunseeker, the Plaintiffs can scarcely be criticised for seeking to resolve it, and the Court made orders permitting the amendment of the Originating Process, by consent, to raise that issue in these proceedings. 19Finally, it seems to me, for the reasons noted in my earlier judgment, that what has occurred today could readily have been avoided by the simple course of the Defendants at some time responding frankly to the question who owned the Sunseeker, by indicating that Vensel owned it and had acquired it (whether or not they went on to disclose that the consideration was paid of $1) from Aldonet, so it is contended, in July 2011, in a transaction, which, it appears, was then entered into the register maintained by the Australian Shipping Registration Office on 25 May 2012. 20In these circumstances, it seems to me that this is a proper matter in which to order that the Defendants should pay the costs thrown away today, by reason that the events of today could have been avoided had the Defendants been more forthcoming in respect of the matters that they would, in fact, raise as critical aspects of their defence in the proceedings. 21I therefore order that the Defendants pay the costs of today as agreed or as assessed.