Solicitors:
Gorval Lynch (Cross-Claimants)
Anthony Delaney Lawyers (First and Third Cross-Defendants)
O'Neill McDonald Lawyers (Second Cross-Defendant)
Holman Webb (Sixth Cross-Defendant)
File Number(s): 2016/362193
[2]
revised ex-tempore Judgment
For reasons I gave on 15 November 2018, I granted leave to the cross-claimants to issue a Notice to Produce directed to the first cross-defendant limited to documents "relating to the purchase, acquisition or supply of "SQL 2008 R2 Server Edition"". The relevance of that obscure matter is explained in my judgment of 15 November 2018 ([2008] NSWSC 1744).
When the hearing resumed before me yesterday, the first cross-defendant produced a bundle of documents in answer to the cross-claimant's call. Some information, said to be commercially sensitive, was redacted from some of the documents. I denied access to the redacted parts to the cross-claimants on the stated ground of commercial sensitivity, in the absence of any clear articulation of a legitimate forensic purpose on the part of the cross-claimants for having access to those matters. The bundle of documents in their redacted form were tendered by the first cross-defendant and marked Ex 1D1.
When the matter had last been before me for hearing the issue of the Notice to Produce had been foreshadowed and I permitted Mr Moore of counsel for the cross-claimants to reserve further cross-examination of Mr Briggs, a director of the first cross-defendant until the issue about whether leave should be given to issue a further notice was resolved. That cross-examination had not been concluded had been overlooked and Mr Briggs, who has been in court throughout, did not attend Sydney from his home in Queensland for the resumption of the hearing because of a personal commitment of a most important kind. However, it was made clear that arrangements could be made to have him give evidence by audio-visual link ("AVL") later in the day and there being no objection to this by the cross-claimants, I so directed.
The impression of all parties and me when the matter was adjourned part-heard was, subject to short evidence relating to the documents, counsel would be in a position to make their closing arguments. Indeed written submissions had been exchanged and lodged with my chambers to facilitate that. When it became clear that there would be some delay in concluding Mr Briggs' evidence Mr Morris QC, who appears with Mr Erskine for the first and third cross-defendants, suggested that it would be convenient to commence hearing counsels' addresses because the evidence was likely to concern a discreet point only, would be short, and could be addressed separately at the end of the day. All counsel assured me they could see no danger in commencing addresses before all the evidence was in. I confess somewhat against my better judgment, perhaps rather my visceral response, I acceded to the suggestion and in the event had heard the whole of the supplementary oral argument on behalf of the first and third, second and sixth cross-defendants by the usual luncheon adjournment. These are the remaining contradictors.
Mr Briggs was called to give evidence by AVL at 2:00pm. He was cross-examined carefully on the documents that had been produced and admitted as Ex 1D1. Mr Moore then commenced to cross-examine him on a document which I marked as MFI 7, upon his undertaking to tender it. This document appears to be an invoice bearing the same identifying numbers from the wholesale supplier of the SQL software as a different invoice from the same supplier in a partially redacted form, which forms part of Ex 1D1. MFI 7 appeared to be dated April 2013 and the invoice in Ex 1D1, in December 2015. Both documents were apparently issued to the same company related to the first cross-defendant. Both included the supply of SQL software. All of the identifying details on each invoice, issued two and a half years apart, including their invoice number, appeared to be identical. However, the description of the goods supplied and their total value were not.
Mr Briggs was unable to explain the apparent contradiction. At the end of the cross-examination, Mr Moore elicited this evidence (474.45T):
"Q. I want to put to you Mr Briggs, that the true tax invoice GGQQ300887, in relation to customer reference number 800909, from Synnex Australia to Now IT Solutions is [MFI 7] … and not what is produced under the notice to produce and is … [Ex 1D1]?
A. That's not correct."
It was not expressly put that Ex 1D1 was fake or fabricated, but that was the implication. This was clearly understood by Mr Morris QC because he clarified the matter in re-examination (476.30T):
"Q. My learned friend's final question if he didn't put it explicitly in these terms, implied that … [MFI 7] is the genuine invoice and those [that make up Ex 1D1] are fake documents intended to mislead the Court. What would you say to that suggestion?
A. I would say that's totally incorrect."
Mr Moore then sought to read in reply an affidavit from the director of the cross-claimants, Dr Beckwith, explaining how he came by MFI 7 and attaching an email sent at his request by an officer of the supplier, a Mr Navineesh Raj, identifying MFI 7 as the invoice bearing the identifying number shared by the invoice in Ex 1D1. Mr Morris objected and he was supported in this by Mr Fernon for the second cross-defendant, and Ms Chan for the sixth cross-defendant.
The principal grounds of Mr Morris' objection were:
1. the contents of the affidavit were hearsay; and
2. the evidence was not evidence in reply, but evidence that should have been led in chief.
Mr Fernon and Ms Chan adopted the same stance. Mr Fernon also submitted that MFI 7 should be excluded under s 135 Evidence Act 1995 (NSW) ("Evidence Act") because its probative value was substantially outweighed by unfair prejudice to the cross-defendants, particularly to the first cross-defendant.
Mr Moore argued that the matter was strictly evidence in reply, but if I was against him sought leave to read his client's affidavit annexing MFI 7 in chief.
[3]
Decision on admissibility
In my judgment both MFI 7 and paras 1 to 9 of Dr Beckwith's affidavit sworn on 22 November 2018 are admissible. I do not regard Dr Beckwith's affidavit as hearsay. Certainly, it provides evidence of his out of court impressions of some of the documents produced and received as Ex 1D1 and sets out his out of court conversations with Mr Raj on 20 and 21 November 2018. But rather than hearsay, I would regard that material as original evidence explaining how MFI 7 came to be within his possession. Exhibit RJB-2 is the print-out of the email Mr Raj sent to Dr Beckwith at 11:20am on 21 November 2018. It attaches MFI 7. By reference to s 58 Evidence Act, and examining the printout of the email and its attachment for myself, I infer that both the email and the attachment are a business record admissible under s 69 Evidence Act. The email describes Mr Raj as "Account Manager - Commercial Sales Synnex Australia Pty Ltd" ("Synnex"). From Ex 1D1, I understand Synnex to be the supplier of the SQL software. Having regard to the email, and comparing it with Ex 1D1, I infer that MFI 7 is indeed what it purports to be, that is to say, a tax invoice issued by Synnex on 2 April 2013 for the supply to Now IT Solutions of certain Microsoft products including a quantity of SQL software. Ultimately, I am satisfied that MFI 7 is admissible as a business record under s 69 Evidence Act.
[4]
Case in reply
I am not satisfied that the additional evidence is strictly in reply. As I explained in my judgment of 15 November 2018, the cross-claimants' case is that the equipment and services to be provided by the first cross-defendant would not have fixed the inefficiencies in its system because it did not include the upgraded version of the SQL software which Mr Benson had installed in 2016 after the cross-claimants' contract with the first cross-defendant was repudiated. As I said in that judgment, this evidence arose in the re-examination of Mr Benson (264.15 - .45T). His evidence was not gainsaid by the witnesses called on behalf of the first cross-defendant. Mr Edwards, who is the third cross-defendant, and was employed at the time as the first cross-defendant's national sales manager, said the upgraded SQL license was included (394.25T). Mr Briggs gave evidence that the software had been acquired and paid for by the first cross-defendant in anticipation of installation of the LiveOffice WAN system in January 2016. MFI 7 goes to this substantive issue and not only to the credit of Mr Briggs.
Ordinarily a party should not be permitted to split its, his or her case. The responding parties are entitled to have all of the evidence the moving party relies upon to make good their case before being required to decide whether or what evidence to call in response.
On the other hand, the relevance of MFI 7 could never have been apparent until the bundle of documents (MFI 6) which became Ex 1D1 was produced and then tendered. Doubtless all of this could and should have been uncovered by appropriate interlocutory steps prior to trial. But given the misunderstanding between counsel as to the non-production of documents under para 7 of the previous Notice to Produce (see: [2018] NSWSC 1744), I am of the view that fairness requires that the cross-claimants be granted leave to re-open their case to tender MFI 7, as it is relevant to the question of whether the upgraded SQL software or license was to be provided as part of the LiveOffice WAN. However, I would limit the leave to the reading of paras 1 to 9 of Dr Beckwith's affidavit and to the tender of MFI 7. This, of course, will be subject to the right of Mr Morris to further cross-examine Dr Beckwith, if he chooses, and to call such evidence in answer to this material as he wishes. And I will make directions in that regard.
[5]
Section 135 Evidence Act
In reaching the conclusions already expressed, I have not overlooked Mr Fernon's argument in relation to s 135 Evidence Act. I am not satisfied that the probative value of MFI 7 is outweighed by unfair prejudice to the first cross-defendant. The probative value of MFI 7 may be significant. Moreover, if one, as I intend to do, provides the first cross-defendant with an opportunity to meet and answer the new evidence, there can be no question of unfair prejudice. I would not exclude the evidence under s 135 Evidence Act.
I appreciate that this decision means that the case must be adjourned. There must always have been some risk this would occur after I permitted the cross-claimants to issue the Further Notice to Produce. Adjournments, of course, cause inconvenience and ongoing vexation to the litigants. They also result in delay and often in wasted costs. However, I am persuaded that the interests of justice in this case require me to permit the cross-claimants to re-open their case in chief, as I have explained and for the reasons I have given. Shutting them out from this legitimate line of attack runs the risk of greater injustice than that involved in a late adjournment.
For these reasons, I made these orders earlier today:
1. Rule that MFI 7 and paras 1 to 9 of the further affidavit of Dr Beckwith of 22 November 2018 are admissible.
2. Grant leave to cross-claimants to re-open their case in chief for the sole purpose of leading the evidence referred to in Order 1.
3. The first and third cross-defendants to file and serve any further evidence in response to the evidence referred to in Order 1 by Wednesday, 30 January 2019.
4. Grant leave to the cross-defendants to issue further subpoenas which may be made returnable before the Registrar on Friday, 14 December 2018.
5. List for mention to fix a date for further hearing before me at 9:30am on Friday, 14 December 2018. Counsel for first and third cross-defendants may appear by telephone.
6. All questions of costs arising out of the events of 22 November 2018 are reserved.
[6]
Amendments
06 March 2019 - Date of orders changed
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Decision last updated: 06 March 2019