Deputy Commissioner of Taxation v Jane Maria Sakovits; Deputy Commissioner of Taxation v Ronald Rudolf Sakovits

Supreme Court of NSW|2010-11-12|Before: Davies J, Young J

CITATION : Deputy Commissioner of Taxation v Jane Maria Sakovits; Deputy Commissioner of Taxation v Ronald Rudolf Sakovits [2010] NSWSC 1322

DECISION : (1) The Notices of Motion of 30 September 2010 are dismissed. (2) The Defendants are to pay the Plaintiff's costs of the Notices of Motion.

CATCHWORDS : APPEAL - appeal from Associate Justice to a single judge - Associate Justice refuses stay of execution of a judgment - appeal against refusal - admission of fresh evidence - whether hearing of stay application was a hearing on the merits - whether special grounds needed to receive further evidence - s 75A(7), (8) Supreme Court Act 1970 - discretion to receive further evidence - principle of the finality of litigation - no explanation for absence of further evidence at the first hearing - failures of Appellant to comply with Court orders for the filing of evidence sought to be tendered on the appeal - failure to comply with Part 49.12 UCPR - application to receive further evidence refused

Civil Procedure Act 2005 LEGISLATION CITED : Supreme Court Act 1970 Uniform Civil Procedure Rules

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 Asian Investments Corporation Ltd v Symons (unreported - Young J - 10 April 1996) D A Christie Pty Ltd v Baker [1996] 2 VR 582 Deputy Commissioner of Taxation v Jane Maria Sakovits; Deputy Commissioner of Taxation v Ronald Rudolf Sakovits [2010] NSWSC 865 Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 Fletcher v Besser [2004] NSWCA 132 Fletcher v Besser [2010] NSWCA 30 Hartigan v International Krishna Consciousness Incorporated [1999] NSWSC 139 CASES CITED : King Investment Solutions v Hussain [2005] NSWSC 1076; (2005) 1 BFRA 577 Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430 McGregor v Potts (2005) 68 NSWLR 109 Nominal Defendant v Manning (2000) 50 NSWLR 139 Nommack (No 100) Pty Limited v FAI Insurances Limited (in Liq) [2003] NSWSC 359; (2003) 45 ACSR 215 Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 Re Copiapo Mining Co (Ltd); Ex parte Mashiter (1894) 10 TLR 180 Wickstead v Browne (1992) 30 NSWLR 1 Wickstead v Browne (1993) 10 Leg Rep SL 2

Deputy Commissioner of Taxation (Plaintiff/Respondent) PARTIES : Jane Maria Sakovits (Defendant/Applicant) Ronald Rudolf Sakovits (Defendant/Applicant)

COUNSEL : NJ Williams SC & SM Foda (Plaintiff/Respondent) BL Jones (Defendants/Applicants)

SOLICITORS : ATO Legal Services Branch (Plaintiff/Respondent) Brown Wright Stein (Defendants/Applicants)

LOWER COURT JURISDICTION : Supreme Court (Associate Judge)

LOWER COURT FILE NUMBER(S) : 2009/296363; 2009/296388

17 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2009/296363 DEPUTY COMMISSIONER OF TAXATION V JANE MARIA SAKOVITS & 2009/296388 DEPUTY COMMISSIONER OF TAXATION V RONALD RUDOLPH SAKOVITS

JUDGMENT 1 On 5 August 2010 Harrison AsJ entered summary judgment in favour of the Deputy Commissioner for Taxation against Ronald and Jane Sakovits. The proceedings arose from the failure of the Defendants to pay Notices of Amended Assessment in relation to income tax, Notices of Assessment and Liability to Pay Penalty for having a Tax Shortfall, Tax Shortfall Interest Charges and subsequent general interest charges. 2 Harrison AsJ also had before her Motions by the Defendants that those proceedings be stayed until such time as criminal proceedings against the Defendants had been finalised. The criminal proceedings concerned tax offences alleged to have been committed by the Defendants, such proceedings arising out of Project Wickenby that was examining international tax evasion. The full background is set out in the judgment of Harrison AsJ of 5 August 2010 (Deputy Commissioner of Taxation v Jane Maria Sakovits; Deputy Commissioner of Taxation v Ronald Rudolf Sakovits [2010] NSWSC 865). 3 The Defendants sought a stay on a large number of bases set out in Harrison AsJ's judgment at [38]. One of those grounds was:

(g) should a stay of these proceedings not be granted until after finalisation of the criminal proceedings or if the Deputy Commissioner is successful in these proceedings, the defendants will be unable to continue with the retainer of their legal team briefed in the criminal proceedings because their financial resources will have been exhausted; 4 In relation to that matter Harrison AsJ said this: [51] So far as the defendants' financial hardship in being able to meet the judgment amounts, neither defendant has provided any evidence of their respective financial positions. Had there been persuasive evidence that if the defendants were called upon to pay the judgments, they would not be able to meet the costs of their legal representation in the criminal proceedings that would have been a relevant matter for consideration. 5 On 9 September 2010 the Defendants filed Notices of Motion appealing from the judgment of Harrison AsJ but only on the basis that her Honour refused a stay of the proceedings. 6 Thereafter, on 30 September 2010 each of the Defendants filed Notices of Motion that the Defendants be granted leave to adduce further evidence on the hearing of the appeal. It was those Notices of Motion that came before me for hearing. 7 The further evidence which the Defendants wished to adduce on the hearing of the appeal was contained in an Affidavit each swore and was annexed to an Affidavit of their solicitor, Peter John Wright sworn 30 September 2010. The Affidavits of each of the Defendants set out what was said to be their assets and liabilities, with some supporting documentation and provided some evidence of legal costs already incurred and what were likely to be incurred in the defence of the criminal proceedings. 8 Two issues were argued before me. The first was whether s 75A(8) Supreme Court Act 1970 applied in the circumstances. The second was whether, in any event, the discretion to receive further evidence should be exercised in favour of the Defendants.

Was there a hearing on the merits? 9 Section 75A applies to an appeal from an Associate Justice to a Judge of the Court. Section 75A relevantly provides: 75A Appeal

… (7) The Court may receive further evidence. (8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds. (9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing. 10 There has been some dispute in the authorities about what constitutes a hearing on the merits. In Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430 Hunt J said at (at 435-436): I am satisfied that the expression "hearing on the merits" in s 75A(8) does include interlocutory matters. The question now is whether the hearing before the Master of the plaintiff's application for an extension of the limitation period was a "hearing on the merits". What then is such a hearing? I have been referred to and have myself been able to find no authority directly in point.

… In my judgment, taking into account the context in which the phrase "hearing on the merits" is to be found in s 75A(8) and the apparent purpose of the restriction imposed, that phrase should be construed as meaning the hearing of any interlocutory matter in which both parties A appeared and in which the issue between them in that interlocutory matter (whether of fact and/or law) was investigated by the relevant tribunal. There is no need for the issues between the parties in the proceedings as a whole to be investigated or determined for the hearing to be one "on the merits". The issue to be investigated or determined is that which arises between the parties in the particular interlocutory proceedings in question. Thus, in an application for summary judgment, which is unconcerned with the merits of the proceedings as a whole, the issue between the parties is whether there is a real question of fact to be tried in the action itself. An investigation of that issue where both parties are present will amount to a "hearing on the merits" within the meaning of s 75A. But orders made on such an application or any other application upon default of appearance or by reason of compromise would not, in my view, amount to such a hearing. (emphasis in the original) 11 Hunt J then went on to find that the hearing before the Master of the Plaintiff's application for an extension of the limitation period was a hearing on the merits within the meaning of s 75A(8). There needed to be "special grounds" established before the further evidence could be received. His Honour then held that a more liberal interpretation ought to be given to the need for special grounds in an appeal from a Master to a Judge (at 437). In deciding whether special grounds were shown Hunt J first referred to what Lindley LJ said in Re Copiapo Mining Co (Ltd); Ex parte Mashiter (1894) 10 TLR 180 at 181, "that it is extremely undesirable to decide a case upon imperfect or insufficient evidence when the truth can be arrived at by adducing further evidence", although Hunt J noted that that statement has been criticized as being too widely expressed. He went on to say, however, that: the particular nature of the issue decided in the interlocutory proceedings is relevant in considering whether further evidence should be received. 12 In Wickstead v Browne (1992) 30 NSWLR 1 the Master had ordered summary judgment in favour of the Plaintiff. An appeal to a single judge was dismissed. During the appeal to the Court of Appeal the appellants sought to tender further evidence that had been sought but not located until after the decision of the single judge. 13 The joint judgment of Handley and Cripps JJA (with whom Kirby P appears to have agreed on this point) said (at 11): In our opinion this Court should receive the further evidence. This is not an appeal following a trial on the merits but an appeal from an interlocutory order for summary dismissal on the ground that the plaintiffs have failed to show any triable issue. The case falls within s 75 A (7) of the Supreme Court Act 1970 and there is no requirement for the party tendering the further evidence to establish special grounds as is the case pursuant to s 75 A (8) where the appeal is from a judgment after a trial or hearing on the merits: see Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430 at 436-437. 14 The citation of Martin v Abbott Australasia as authority for what is set out is odd because the conclusion reached by Hunt J was the opposite of that to which the Court of Appeal came in Wickstead v Browne. Further, consideration by Hunt J of the circumstances in which there is a hearing on the merits concluded at the end of the first new paragraph on 436 of the report. What was being considered thereafter and on 437 was a discussion of what amounted to "special grounds" on the basis that s 75A(8) applied. 15 Young J (as his Honour then was) observed in Asian Investments Corporation Ltd v Symons (unreported - Young J - 10 April 1996) that although Handley and Cripps, JJA, purported to apply the test in Martin's case, it was difficult for him to see how they in fact did so (see at 5). It was not necessary in that case for his Honour to resolve the tension between the 2 cases because the evidence there sought to be tendered was material concerning matters that occurred after the hearing. In those circumstances s 75A(9) applied. 16 In Hartigan v International Krishna Consciousness Incorporated [1999] NSWSC 139 Bryson J was dealing with an appeal from a Master in relation to a Motion to strike out the Plaintiff's claim for want of prosecution. At the hearing before the Master there had been little or no evidence explaining the Plaintiff's inaction that led to the Motion. The Plaintiff sought to lead this evidence at the appeal. 17 Bryson J referred to the passage in the judgment of Hunt J, which I have set out in para [10] above, and went on to say this: [4] I respectfully say that his Honour's conclusion related to a wider subject than was required for disposition of the case before him, and was expressed as an enunciation of the basis for the extension of the phrase to the issue in the interlocutory matter itself. As in Martin v Abbott Australasia Pty Ltd it was his Honour's view that the test in subs (8) had been satisfied and this passage was not essential for disposition.

[5] The reference to this passage, in the judgment of the majority in Wickstead v Browne (1992) 30 NSWLR 1 at 11, does not clearly show whether their Honours approved of this part of Hunt J's observations, wholly or at all, and the passage is not at all consistent with the conclusion expressed by the majority. The anomaly was commented on by Young J in his Honour's unreported decision in Asian Investments Corporation Ltd v Symons 10 April 1996.

[6] There is no doubt about the view of the majority. Speaking in relation to an interlocutory appeal against a decision that proceedings he dismissed on the ground that they disclosed no reasonable cause of action, Handley and Cripps JJA said at 11: - "The case falls within s75A(7) of the Supreme Court Act 1970, and there is no requirement for the party tendering the further evidence to establish special grounds as is the case pursuant to s75A(8) where the appeal is from a judgment after a trial or bearing on the merits..." [7] In the Notice of Motion before the Master the Defendant claimed that the proceedings should be dismissed for want of prosecution pursuant to Pt 33 r 6 which relevantly relates to proceedings which are not prosecuted with due dispatch. The question raised is not, in my understanding, what are the merits of the Plaintiff's case, although they are relevant to its disposition. I do not find it possible to see the matter in the way in which it was seen by Hunt J. In my understanding the reference to the merits is a reference to the overall merits of the litigation, and not to the matter in issue in the interlocutory application itself. It is not on my own opinion that I proceed but on what I regard as the law authoritatively established by the passage in the majority judgment in Wickstead v Brown to which I have referred: that is, in interlocutory cases including the present case there is no requirement to establish special grounds under sub-s75A(8). There is however a requirement to obtain a discretionary decision under subs (7). 18 In Nominal Defendant v Manning (2000) 50 NSWLR 139 the issue was whether, after an application to extend the limitation period had been rejected, a second or subsequent application would amount to an abuse of process, or should be subject only to the operation of a discretion to reject the application if there had been no change of circumstances or unless the second application rested on evidence which could not, with reasonable diligence, have been obtained for use in the first application. The Court of Appeal by majority (Heydon JA and Foster AJA) held that a second and subsequent application was not of itself an abuse of process. 19 The majority, in separate judgments, considered that the appropriate test was to be discerned by determining which of the two views in D A Christie Pty Ltd v Baker [1996] 2 VR 582 on the approach to the admission of new evidence on appeal, was the correct view as a matter of New South Wales law. Brooking and Hayne JJA had taken the restrictive approach whereas Charles JA, in dissent, had taken a liberal approach. 20 In his judgment in Manning, Heydon JA said the question whether Charles JA's approach was correct as a matter of New South Wales law depended on the meaning and operation of s 75A(7) and (8). That involved him considering the competing views in Martin on the one hand and Wickstead v Browne on the other. In the result, Heydon JA preferred the view of Charles JA, which he thought was consistent with the approach of Bryson J in Hartigan, but inconsistent with what Hunt J had said in Martin - see at [56], [58], [60], [67] and [70]. 21 Similarly, Foster A-JA, seemingly approved the passage from Wickstead v Browne when he set out the relevant passage and then said that he preferred the reasoning of Charles JA in D A Christie Pty Ltd v Baker at [120] - [122].

22 Recently, some doubt has been cast on the continuing authority of Manning: Fletcher v Besser [2010] NSWCA 30 at [2], [3] and [17]. 23 In Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 Heydon JA (with whom Mason P and Young CJ in Eq agreed) referred to the 2 views expressed in Martin and Wickstead v Browne but did not find it necessary to resolve which was the correct view. 24 In Nommack (No 100) Pty Limited v FAI Insurances Limited (in Liq) [2003] NSWSC 359; (2003) 45 ACSR 215 at [3] Burchett AJ proceeded on the basis that the correct view of s 75A (7) and (8) was that expressed in Wickstead v Browne and in Hartigan. 25 In Fletcher v Besser [2004] NSWCA 132 the Court of Appeal considered an appeal from Studdert J who had refused leave to extend the limitation period in a medical negligence claim. At the hearing of the appeal the Appellant's counsel sought leave to lead evidence that had not been before Studdert J. The evidence consisted of affidavits of the Appellant's solicitor and expert witness about the implications, previously unrealised, of hospital notes which had been before Studdert J. Without any reference to authority, Bryson JA, with whom Mason P and Giles JA agreed said this: [69] … [A]ll of that material could and should, if the application had been conducted with reasonable diligence have been put in evidence before Studdert J. If that had happened the respondents would have had an opportunity to deal with it then. There must be some sound ground, or some good reason for admitting further evidence under sub 75A (7) of the Supreme Court Act 1970 and in my opinion none has been shown. A simple wish to expand the evidence on which decision is to be given is not enough. A claim to have a new insight on the implications of some evidence which was available and was tendered earlier will rarely be enough: decision will respond to the nature and importance of the insight. In my view leave to tender this further material ought not be granted. Notwithstanding that the requirement of special grounds in sub 75 A (8) does not apply, I am of the view that the Court of Appeal should not admit this part of the proposed further evidence. 26 It is apparent from the last sentence in that paragraph that Bryson JA assumed the correctness of what had been said in Wickstead v Browne and the cases that followed it including, presumably, his own decision in Hartigan.

27 Campbell J (as his Honour then was) in King Investment Solutions v Hussain [2005] NSWSC 1076; (2005) 1 BFRA 577 commented on the possible discrepancy in approach between Martin and Wickstead v Browne at [18] but went on to point out that the High Court reversed the Court of Appeal's decision in Wickstead v Browne (1993) 10 Leg Rep SL 2, although there was no reference to the s 75A point. The result, Campbell J said, was that Wickstead v Browne was not a binding precedent, and was no more than a persuasive authority. It did not matter for the case before Campbell J because he held that the decision by the Associate Justice was a final decision in any event. 28 In McGregor v Potts (2005) 68 NSWLR 109 there was an appeal from the Master who had refused to stay proceedings on the basis of forum non conveniens grounds. At the hearing of the appeal before Brereton J, an application was made to read an affidavit that had not been before the Master. Brereton J said this about the application to read the further evidence: [38] On a s 75A appeal, the Court may receive further evidence ( Supreme Court Act , s 75A(7)), except where the appeal is from a judgment after a hearing on the merits, in which case further evidence may be received only on special grounds, except in respect of matters occurring after the trial or hearing: s 75A(8), s 75A(9). In an interlocutory appeal such as the present, there is no requirement to establish special grounds under s 75A(8) for the reception of further evidence, whether or not it has occurred after the hearing; this is because the interlocutory hearing is not a "hearing on the merits" ( Wickstead v Browne (1992) 30 NSWLR 1 at 11; Hartigan v International Krishna Consciousness [1999] NSWSC 139 (Bryson J); Asian Investments Corporation Ltd v Symons (Young J, 10 April 1996, unreported); cf Martin v Abbott Australasia (at 435-436) (which can no longer be regarded as correctly stating the law on this question)). And while it remains necessary for an appellant who wishes to rely on further evidence to obtain a favourable exercise of discretion under s 75A(7), a more liberal approach is taken in interlocutory appeals ( Martin v Abbott Australasia ; Hartigan v International Krishna Consciousness (at [8]-[9])).

It does not appear that his Honour was aware of the judgment of Campbell J which had been delivered only 4 days previously. 29 What then is the present law with regard to a "hearing on the merits" for the purposes of s 75A(8)? Whilst Campbell J is undoubtedly correct in saying that Wickstead v Browne is no more than a persuasive authority as a result of the Court of Appeal's judgment being overturned on other grounds by High Court, it remains a strong persuasive authority, particularly by reason of its implied approval in Nominal Defendant v Manning. Whilst the continuing correctness of Manning has itself been questioned (although not directly in respect of the present issue) and, whilst it must be borne in mind that the Court of Appeal in Manning was seemingly unaware that Wickstead v Browne had been overturned in the High Court on other grounds, the reasoning in Manning provides strong support for the Wickstead v Browne view of s 75A(8). 30 When that is coupled with what the Court of Appeal said in the first Fletcher v Besser, the view taken by Bryson J in Hartigan, by Burchett AJ in Nommack and by Brereton J in McGregor v Potts, I consider that the approach in Wickstead v Browne (albeit with the omission of the reference to Martin v Abbott) represents the correct state of the law. That means that the present hearing before the Associate Justice for a stay of the proceedings was not a hearing on the merits. Section 75A(8) does not apply with the result that special grounds do not need to be shown for the receipt of further evidence on appeal. How should the discretion be exercised? 31 Even though "special grounds" do not need to be shown, the discretion must be exercised bearing in mind the principle of the finality of litigation which is not merely a desirable objective but is also an integral part of the system by which rights are determined: Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 292. 32 The Affidavit of the Defendants' solicitor read on the present application contains no explanation why the evidence now sought to be tendered on the appeal was not put forward at the hearing before Harrison AsJ. This is particularly significant when the procedural history of the matter is examined. 33 When the proceedings came before Registrar Bradford on 1 April 2010 the first order made by the Registrar was that the Defendants were to file and serve any Motion seeking a stay together with supporting evidence by 15 April 2010. The Defendants filed and served such Notice of Motion on 16 April 2010. No affidavit was filed and served until 30 April 2010 when each of the Defendants swore an affidavit which was relevantly identical to that sworn by the other. Each said this: "I intend to file further evidence as to my financial position when those details are made available to me shortly." Jane Sakovits added some details concerning her children, grandchildren and mother with a statement that she provided financial assistance in relation to her mother's household expenses as required. 34 The matters came before Registrar Bradford again on 13 May 2010 when Mr. Korakis of counsel appeared for the Defendants. The Registrar asked counsel for each party if the evidence on the Motions was closed and each counsel told him that it was. 35 Despite that assurance, on 29 June 2010, the Defendants' solicitor Mr Wright swore an identical Affidavit in each of the proceedings which dealt in general terms with the criminal proceedings and the fact that they were imposing substantial financial burdens on the Defendants. Nothing in those Affidavits provided further information about the financial position of the Defendants. 36 During the course of the hearing of the stay applications by Harrison AsJ objection was taken to the paragraph in each Affidavit of the Defendant which said that the concurrent criminal and civil proceedings had had a substantial adverse effect on the Defendants' financial position and they were unable to bear the costs of both of the proceedings. The following exchange then occurred between counsel for the Plaintiff and counsel for the Defendants: FODA: In Jane Sakovits' affidavit para 21 and in Ronald Sakovits' para 20, the arguments about all these paragraphs are the same and that is that they are submissions and conclusions. They are not evidence of anything. She would have to provide her financial circumstances, statements, some substantiation that her financial circumstances are as dire as she suggests. There are no financial documents at all. For her to draw that conclusion we need more information. KORAKIS: That is the best evidence that the defendant was able to put on at that particular time . I am in the Court's hands on that. It is, to the best of her knowledge, her financial position at that time . Unfortunately, she was unable to clarify it any further. There is some attempt made in the other affidavit of Mr Wright to clarify her financial position. The defendant is only trying to say that there is going to be substantial financial detriment should these proceedings not be stayed. (emphasis added) 37 No application was made for an adjournment to enable the filing of information concerning the financial position of the Defendants. Nor was it said whether further information was then available although it had not been when the Affidavits were sworn. 38 Harrison AsJ handed down her judgment on 5 August 2010. As I have noted, the appeal was lodged on 1 September 2010. Under Part 49.12 UCPR a party who proposes to adduce further evidence on an appeal from an Associate Justice must serve on the other party a copy of the affidavit setting out the evidence (relevantly) not more than 7 days after the institution of the appeal. In fact, the Affidavit of Mr Wright was not filed and served until 30 September 2010. In that Affidavit Mr Wright said that in order to prepare the further evidence the Defendants needed to obtain information from their accountant Mr Charlton and from Shanahan Tudhope, the solicitors acting for them in the criminal proceedings. Mr Wright went on to say that Mr Charlton was overseas on annual leave from 23 August 2010 to 13 September 2010. It was for those reasons, so it was said, Pt 49.12 of the Rules was not complied with. 39 On the other hand, nothing was said about why it was not possible to obtain the information ultimately provided by Shanahan Tudhope by letter dated 29 September 2010 at an earlier time. The fact that the letter from Shanahan Tudhope was dated 29 September 2010 and provided confirmation of what had been billed, what was owed and what was held in trust as of 29 September 2010 rather suggests that an enquiry was not made until that day. 40 Further, when para [51] of Harrison AsJ's judgment is borne in mind one might have expected an explanation about why no approach had been made to Mr Charlton between 5 August and his departure on 23 August. 41 When one examines what are said to be the Defendants' assets and liabilities in the Affidavits annexed to Mr Wright's Affidavit it is clear that the information contained in those Affidavits was information that would have been known to the Defendants, or was capable of being ascertained from their accountant/solicitors, from the time they filed the stay application in April, but most certainly by the time the applications were heard by Harrison AsJ. No explanation is forthcoming about why this information was not before Harrison AsJ, particularly when orders had been made by the Registrar to finalise the evidence, and assurances given by counsel for the Defendants that the evidence was complete. 42 The Defendants now seek an indulgence of the Court in 2 respects. First, they ask that Pt 49.12 UCPR not be applied to shut them out because they are late in adducing the further evidence they wish to lead. Secondly, they wish to lead evidence that was available to them at the time it ought to have been led. When no adequate explanation is put forward about the former matter, and no explanation at all about the latter matter, the principle of the finality of litigation ought to operate to preclude the exercise of discretion in favour of the Defendants. 43 The Defendants submit that the significant matter is that if the evidence is not admitted and the stay not granted they will be greatly prejudiced by not being able to fund the defence of the criminal proceedings. Facing head on their failure to provide explanations, the Defendants point to what was said by Bryson J in Hartigan: [10] It is a remarkable event that at the hearing before the Master no affidavit of the Plaintiff herself was read. Of course the Defendant as applicant was in no way responsible for this. However where proceedings which she commenced in 1994 relating to events of 1988 were challenged by an application for dismissal for want of prosecution in 1998, the Plaintiff's own position and her own explanation for her conduct at the various phases of the events was of high and obvious importance. The learned Master commented on the paucity of the evidence on this subject in his reasons.

[11] Where something of such glaring and primary importance as the Plaintiff's own account of her use of time has been omitted, confidence that the proceedings have been disposed of on a just basis cannot be very strong. The sense that there may well have been a miscarriage of the proceedings, even one for which the Plaintiff or those advising her are the only persons who bear responsibility, appears so strong as to favour admitting her evidence now that it is belatedly brought forward. It is not appropriate to allow procedural mismanagement to have unduly serious consequences, although finally they can be so extreme as to merit closing out a party from consideration.

[18] In the present case, where only a few months have passed since the hearing before the Master, and the matter which the Plaintiff wishes to bring forward is of great importance as to the affidavit, up to para 34, and as to the rest, although it is of relatively less importance, the Plaintiff was deprived by the Defendant's chosen manner of proceeding of opportunity to deal with it. I should exercise the discretion on a relatively liberal basis. 44 It is not easy to discern from the judgment in what way the Defendant was thought to be at fault by Bryson J. It seems clear, however, from what his Honour said at [18], and perhaps expanded on to some extent at [12] and [13], that his Honour was minded to exercise the discretion in relation to further evidence in the Plaintiff's favour. 45 The Defendants submit that the injustice that would result from a failure to receive the further evidence in the present case is such that that should override the failures to explain the absence of the evidence on an earlier occasion. 46 A few things can be said about this. First, the matter is ultimately one of discretion, and there are factors in Hartigan, discerned from the passages I have referred to, that might be seen to have influenced Bryson J's exercise of the discretion. 47 Secondly, not only is the Plaintiff in the present case not in any sense at fault about the matter, but the Defendants failed to comply with Court orders to serve the evidence and wrongly gave an assurance that all the evidence was complete. In addition, they had further opportunity which they took by filing Mr Wright's Affidavits of 29 June 2010, but did not adduce the necessary evidence. 48 Thirdly, and most significantly, what the High Court said in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 has considerably changed the litigation environment. Although that case concerned amendment and, as a result, adjournment, the case has other significance. 49 The emphasis on starting with the statutory basis for the Court's power to deal with procedure inevitably leads one in the present case to ss 56, 57 and 58 Civil Procedure Act 2005. Although s 58 requires the Court to seek to act in accordance with the dictates of justice, the considerations that govern that principle are listed in sub-s (2), and include a number of matters that I have discussed in substance earlier in this judgment - see for example sub-s (2)(b)(ii), (iii), (iv) and (v). The matter of injustice that the Defendants point to is but one of these considerations, and is found in sub-s (2)(b)(vi). 50 Further, as the judgments in Aon make clear, even an order for indemnity costs may not be appropriate to cover the prejudice that the other party suffers. If the present evidence is admitted there will, in effect, be a complete rehearing of the stay application. Whatever order for costs is made both on the present application and on the hearing of the appeal on the new bases, in the light of the judgment given by Harrison AsJ, which judgments themselves are not challenged, an order for costs in favour of the Plaintiff is likely to be a very hollow victory. 51 I do not consider that injustice will result to the Defendants if they are not permitted to adduce the further evidence. Injustice suggests the happening of events or the perpetration of a wrong without a remedy, either matter being outside the fault or control of the sufferer. The Defendants have not shown that the inability to present the further evidence has been outside their fault or control. When on the face of things the evidence seems to have been available, and when no evidence has been given to explain why it was not produced at an earlier time, it does not seem to me that there has been any injustice. The provisions of the Civil Procedure Act to which I have referred place obligations on all parties to litigation. The Defendants did not act in accordance with those precepts. The discretion to receive the evidence now should not be exercised in their favour.

(1) The Notices of Motion of 30 September 2010 are dismissed.

(2) The Defendants are to pay the Plaintiff's costs of the Notices of Motion.

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