[2009] HCA 27
Australian Securities and Investments Commission v Rich (2006) 235 ALR 587
[1992] HCA 36
Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1
Source
Original judgment source is linked above.
Catchwords
[2009] HCA 27
Australian Securities and Investments Commission v Rich (2006) 235 ALR 587[1992] HCA 36
Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1
Judgment (6 paragraphs)
[1]
Judgment
These reasons deal with a notice of motion filed on 6 March 2020 by the plaintiffs, Goodman Fielder Consumer Foods Pty Limited and Goodman Fielder New Zealand Limited (together, Goodman Fielder), seeking leave to re-open its case to adduce further evidence on the quantification of damages.
The defendants, GrainCorp Foods Australia Pty Limited and GrainCorp Foods NZ Limited (together, GrainCorp), oppose leave to re-open being granted. For the reasons that follow, I have concluded that Goodman Fielder should be granted such leave.
[2]
Background
On 14 June 2017, Goodman Fielder commenced these proceedings by summons and commercial list statement.
In the proceedings, Goodman Fielder claims that GrainCorp has breached (and continue to breach) the terms of a long-term supply agreement pursuant to which GrainCorp manufactures and supplies a range of spreads, oils and related products to Goodman Fielder (the LTSA). Goodman Fielder claims that GrainCorp's breaches, of failing to test products prior to delivery and/or failing to deliver a written certificate of analysis (COA) prior to or at the time of delivery, have caused (and continue to cause) Goodman Fielder financial loss. It seeks declaratory relief and damages. In summary, Goodman Fielder's damages claim is made up of three types of loss; additional time-based warehousing costs, costs associated with the return of product batches and loss incurred from the early payment of invoices (working capital costs).
GrainCorp's commercial list response, filed on 25 August 2017, denies that GrainCorp has breached the LTSA or that Goodman Fielder has suffered loss. GrainCorp has also filed a defensive cross-claim, seeking damages for alleged breaches of warranties contained in an agreement relating to the sale of Goodman Fielder's manufacturing business or for misleading and deceptive conduct if Goodman Fielder succeeds with its claims.
On 11 August 2017, Goodman Fielder was ordered to serve its lay evidence by 29 September 2017. That date was extended to 1 November 2017.
On 1 November 2017, Goodman Fielder served an affidavit of Phillip Hart affirmed on 1 November 2017 (Hart 1). Hart 1 addresses the financial loss Goodman Fielder claims to have suffered from GrainCorp's breaches of the LTSA for the period from 29 January 2013 to 31 August 2017 (Relevant Period).
Hart 1 exhibits two excel spreadsheets; one for Australia (AU spreadsheet) and one for New Zealand (NZ spreadsheet). The spreadsheets contain a range of data associated with each individual batch of products delivered by GrainCorp to a third party warehouse nominated by Goodman Fielder, represented as a single row in each of the spreadsheets. The data inputs are derived from multiple sources, including Goodman Fielder's electronic record keeping system known as SAP, invoices from third party warehouses, and excel calculations. Hart 1 does not exhibit the SAP reports from which much of the data in the spreadsheets is based.
The AU and NZ spreadsheets calculate Goodman Fielder's time-based storage and returned product batch costs based on a complex methodology which is explained in Hart 1 and in later affidavits. They also contain the data from which Goodman Fielder's expert calculates its claimed working capital costs.
On 23 February 2018, GrainCorp served two lay affidavits which addressed issues with the data contained in Goodman Fielder's evidence and amended the AU spreadsheet by inserting additional data from GrainCorp's SAP system and recalculating values in certain columns.
In response to GrainCorp's evidence and correspondence from GrainCorp's solicitors about Goodman Fielder's approach to the quantification of damages and the data relied on, Goodman Fielder served further lay affidavits and revised versions of the spreadsheets that incorporated the data inserted by GrainCorp.
The further lay affidavits served by Goodman Fielder are:
1. an affidavit of Phillip Hart affirmed 13 April 2018 (Hart 2), to which an amended AU spreadsheet and amended NZ spreadsheet were exhibited;
2. an affidavit of Phillip Hart affirmed 30 April 2018 (Hart 3), to which a second amended AU spreadsheet was exhibited;
3. an affidavit of Anna Altarejos affirmed 31 August 2018, in which Ms Altarejos describes the process adopted to prepare COA summary and consolidated summary spreadsheets for Australia and New Zealand. At the main hearing, directions under s 50 of the Evidence Act 1995 (NSW) were made by consent in relation to the final versions of the COA AU and NZ summary and consolidated summary spreadsheets;
4. an affidavit of Anna Altarejos affirmed 10 December 2018, in which Ms Altarejos described some amendments to the AU and NZ spreadsheets and the summary spreadsheets; and
5. an affidavit of Ms Altarejos affirmed 5 April 2019, to which a third amended AU spreadsheet, fourth amended AU spreadsheet, second amended NZ spreadsheet and third amended NZ spreadsheet were exhibited (Altarejos 3).
On 12 April 2019, Goodman Fielder served an expert report of Janine Thompson that calculates Goodman Fielder's working capital costs. The calculations in Ms Thompson's report are premised on data contained in the fourth amended AU and third amended NZ spreadsheets.
On 16 July 2019, Goodman Fielder's solicitors wrote to GrainCorp's solicitors about Goodman Fielder's damages evidence which, as served, related to the Relevant Period only. They sought GrainCorp's agreement on a mechanism to resolve the issue of damages for the post-31 August 2017 period, noting that an available course was for Goodman Fielder to serve updated damages evidence close to the hearing or for the hearing to be conducted on damages on the current evidence with a referee to be appointed to deal with the balance of the claim.
On 19 July 2019, the proceedings were set down for hearing.
Between 12 August and 22 November 2019, the solicitors for the parties exchanged correspondence about Goodman Fielder's damages evidence and the proposal to refer to a referee Goodman Fielder's post-31 August 2017 damages claim. GrainCorp's solicitors advised that GrainCorp did not agree to a referral, for reasons including that the hearing had been set down to deal with all issues of liability and damages.
On 20 November 2019, Goodman Fielder filed a notice of motion seeking referral to a referee of its post-31 August 2017 damages claim (referral motion). The referral motion was stood over for determination at the final hearing.
On 3 February 2020, in accordance with the usual order for hearing, GrainCorp served objections to Goodman Fielder's evidence. GrainCorp objected to all the iterations of the AU and NZ spreadsheets on relevance, form, hearsay and s 135 Evidence Act 1995 (NSW) grounds, and also objected to parts of Hart 1, Hart 2, Hart 3 and Altarejos 3. It is not in dispute that this was the first occasion on which GrainCorp notified Goodman Fielder that it objected to the spreadsheets being admitted into evidence at the hearing.
On 14 February 2020, Goodman Fielder served a further affidavit of Phillip Hart affirmed 14 February 2020 (Hart 4). According to Goodman Fielder, it served Hart 4 in an attempt to deal with GrainCorp's objections to the spreadsheets and its damages evidence.
In Hart 4, Mr Hart describes various reports generated from Goodman Fielder's SAP system from which the data contained in the iterations of the AU and NZ spreadsheets was derived. He also describes the process by which data relating to the costs charged by third party warehouses was derived and explains the formulas contained in the spreadsheets.
Mr Hart deposes that he could not locate certain reports generated from Goodman Fielder's SAP system on which the various iterations of the AU and NZ spreadsheets were based but, subject to the potential for some correcting entries, he had no reason to believe that the transaction data entered at the time had changed. Hart 4 exhibits reports generated from Goodman Fielder's SAP system around the time Hart 4 was prepared of the same nature as those Mr Hart describes were generated to extract data for the various iterations of the spreadsheets (new SAP reports).
The hearing of Goodman Fielder's and GrainCorp's claims on liability and damages commenced on 17 February 2020.
At the hearing, Goodman Fielder's damages claim was quantified as approximately AUD$1.25 million plus NZD$485,000. The relevant versions of Goodman Fielder's spreadsheets which quantified losses were the fourth amended AU and third amended NZ spreadsheets exhibited to Altarejos 3. The fourth amended AU spreadsheet contains 67 columns and 16,224 rows of data and calculations. The third amended NZ spreadsheet contains 56 columns and 3,771 rows of data and calculations. According to Goodman Fielder, the data recorded in 28 of the columns in those spreadsheets is derived from Goodman Fielder's SAP system.
On the second day of the hearing, GrainCorp objected to the fourth amended AU and third amended NZ spreadsheets on several bases including that the data contained within them was hearsay as the foundational SAP reports from which the data was sourced were not in evidence and the new SAP reports exhibited to Hart 4, which had not been verified as containing the same data, could not remedy that inadmissibility. No objection was taken to the admissibility of the new SAP reports as business records.
During the course of submissions on admissibility and before its case had closed, Goodman Fielder was granted a short adjournment to determine whether a process of comparison or verification of the new SAP reports against the data contained in the fourth amended AU and third amended NZ spreadsheets could be undertaken.
Upon determining that such verification would take some time and in the knowledge of the Court's view that there were admissibility issues with the spreadsheets, Goodman Fielder sought that the proceedings be adjourned part-heard at the conclusion of the week to permit it to undertake the process of comparison and to adduce evidence as to the outcome, most likely by way of further spreadsheets and an affidavit from Mr Hart and/or Ms Altarejos. GrainCorp indicated that it could not take a position without seeing the proposed evidence and that the process by which any further evidence was to be adduced was properly by way of an application to re-open Goodman Fielder's case after closing submissions. Goodman Fielder acceded to that approach.
The hearing proceeded. The fourth amended AU and third amended NZ spreadsheets and parts of Hart 4 were admitted but as evidence of the methodology and process that was undertaken to prepare the spreadsheets and by which Goodman Fielder calculates damages. GrainCorp read its evidence, the experts were cross-examined and the parties moved to oral closing submissions.
On the final day of the hearing, the parties agreed a timetable for written closing submissions and the filing of any motion by Goodman Fielder seeking leave to re-open to adduce further damages evidence. They also agreed to stand over the referral motion to be heard at the same time as Goodman Fielder's leave to re-open application. Judgment was reserved.
The parties addressed Goodman Fielder's methodology of the quantification of its claimed loss, as well as the legal basis on which the heads of loss are claimed, during oral submissions at the main hearing and in its closing written submissions.
In accordance with the agreed timetable, Goodman Fielder filed its notice of motion seeking leave to re-open to adduce and rely on further evidence in the form of an affidavit of Phillip Joseph Hart affirmed 6 March 2020 (Hart 5) and exhibit PJH-5 to that affidavit (further Hart evidence).
In support of the notice of motion, Goodman Fielder relies on the affidavit of Anne Birgit Hoffmann affirmed on 6 March 2020. Graincorp relies on an affidavit of Karen Gai Ingram sworn on 31 January 2020. The parties also rely on written submissions which they served prior to oral argument on 28 May 2020 and supplementary written submissions received on 1 June 2020.
At the hearing of Goodman Fielder's motion for leave to re-open on 28 May 2020, I also heard argument on Goodman Fielder's amended referral motion dated 12 February 2020 in which it seeks orders that Goodman Fielder's post-31 August 2017 damages claim or, alternatively, the entirety of Goodman Fielder's damages claim, be referred to a referee. I have deferred delivering my reasons on the referral motion until I give judgment in the main case.
[3]
The further Hart evidence
The further Hart evidence which Goodman Fielder seeks leave to adduce comprises Hart 5 and, as part of PJH-5, a final AU spreadsheet and a final NZ spreadsheet (final spreadsheets).
In Hart 5, Mr Hart details the steps taken to extract the data contained in the new SAP reports (as exhibited to Hart 4), the process by which the costs incurred by Goodman Fielder for the purposes of its damages claim were calculated, and the process by which the final spreadsheets were created and verified against the fourth amended AU and third amended NZ spreadsheets.
Mr Hart's evidence is that he generated the final spreadsheets by carrying out the process of re-creating the fourth amended AU and third amended NZ spreadsheets using the approach employed to prepare the initial AU and NZ spreadsheets to verify that the new SAP reports support the data contained in the fourth amended AU and third amended NZ spreadsheets. Mr Hart worked fulltime for nine days to produce the final spreadsheets.
Mr Hart identifies variances between the SAP data in the final spreadsheets and the fourth amended AU and third amended NZ spreadsheets and explains the nature and impact of them on the calculation of Goodman Fielder's costs. The key variances relate to temperature zone, pallet height and invoice data.
As part of the final spreadsheets exhibited to PJH-5, there are worksheets labelled "4th amended AU", "3rd amended NZ" and "Variance". The variance worksheets identify, by a green tick and a red cross, each cell in the final spreadsheets which contain values which correspond or differ to those in the fourth amended AU and third amended NZ spreadsheets.
Mr Hart deposes that the net effect of all variances results in the total time-based storage costs incurred by Goodman Fielder during the Relevant Period being AUD$214 higher in the final AU spreadsheet (AUD$840,696) compared to the fourth amended AU spreadsheet (AUD$840,482), and NZD$268 higher in the final NZ spreadsheet (NZD$196,893) compared to the third amended NZ spreadsheet (NZD$196,626).
[4]
Legal principles
Goodman Fielder's motion for leave to re-open is made under r 2.1 and 29.5 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), which relevantly provide:
2.1 Directions and orders
The court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appear convenient (whether or not inconsistent with these rules or any other rules of court) for the just, quick and cheap disposal of the proceedings.
29.5 Conduct of trials generally
The court may give directions as to the order of evidence and addresses and generally as to the conduct of the trial.
In exercising its powers to make directions and orders under those rules, the Court must seek to give effect to the overriding purpose of the Civil Procedure Act 2005 (NSW) (CPA) and the UCPR to facilitate the just, quick and cheap resolution of the real issues in the proceedings: Civil Procedure Act 2005 (NSW), ss 56(1), 56(2).
To give effect to the overriding purpose, proceedings are to be managed having regard to the objects specified in s 57(1) of the CPA, which include the just determination and the timely disposal of the proceedings. In deciding whether to make any order or direction for the management of proceedings, the Court is obliged to seek to act in accordance with the dictates of justice, which are to be determined in a particular case having regard to ss 56 and 57 of the CPA: Civil Procedure Act 2005 (NSW), ss 57(1), 58(1), 58(2).
The Court may also have regard to the principles governing an application to re-open as established by the authorities.
In Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471, Clarke JA (with whom Mahoney and Meagher JJA agreed) stated at 478:
"The principle which should guide the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reason why the evidence was not led in the first place…"
Although decided prior to the introduction of the CPA and the UCPR, Urban Transport Authority of New South Wales v Nweiser has been accepted as an appropriate authority to be applied in a case seeking leave to re-open, as has the principle of whether the interests of justice are better served by allowing or rejecting the application: see for example The Movie Network Channels Pty Limited v Optus Vision Pty Limited [2009] NSWSC 132 at [4]; Gaskin v Ollerenshaw [2010] NSWSC 788 at [22]; N M Rural Enterprises Pty Limited v Rimanui Farms Limited [2011] NSWSC 1561 at [26]; Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 (Bradshaw) at [26]; Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1; [2012] VSCA 232 (Spotlight) at [26].
The Court approaches applications for leave to re-open differently depending on the time at which the application to re-open is made. Where an application is made to re-open to adduce new and additional evidence before judgment is delivered, it is relevant to consider whether there was a deliberate or tactical decision made not to call the evidence during the hearing. If such a decision was not made, a key consideration is whether the re-opening of the case would cause embarrassment or prejudice to the other side: Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36 at 266-267.
The authorities recognise four classes of case in which a court may grant leave to re-open, although the categories are not closed. The recognised categories are (i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available; (ii) where there has been inadvertent error; (iii) where there has been a mistaken apprehension of the facts; and (iv) where there has been a mistaken apprehension of the law: Bradshaw at [24]; Spotlight at [25] and [26].
Other factors that are relevant to consider on an application for leave to re-open to adduce further evidence and which bear on the interests of justice, include:
1. the importance, relevance and probative value of the proposed new evidence to the issues in the case;
2. the likely prejudice to the other party if the application is allowed, including the delay to completion of the proceedings and consequential costs;
3. the public interest in the finality of litigation, with the consequent expectation that parties will present their evidence and submissions at one hearing;
4. the public interest and the interest of the parties that the proceedings will be conducted efficiently and expeditiously, thereby minimising delay and expense;
5. whether the occasion for calling the further evidence ought reasonably to have been foreseen; and
6. any delay in making the application.
See Australian Securities and Investments Commission v Rich (2006) 235 ALR 587; [2006] NSWSC 826 at [18]; Spotlight at [17]; FYD Investments Pty Ltd v Promptair Pty Ltd [2017] FCA 1097 at [32].
Ultimately, the Court has a discretion whether to permit a party to re-open their case which must be exercised having regard to all the circumstances of the case and in a manner consistent with the public interest in a just, quick and cheap resolution of the real issues in the proceedings: Taouk v Louis (No 1) [2014] NSWSC 656 at [11]; The Owners - Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1682 at [43]; Shaw v KPR Recruitment Australia Pty Ltd (No 2) [2017] NSWSC 707 at [15].
[5]
Consideration
Goodman Fielder contends that leave to re-open should be granted because the justice of this case lies in allowing it to adduce the further Hart evidence for, essentially, five reasons.
First, it submits that the further Hart evidence is central to the relief it seeks as, without it, Goodman Fielder will be precluded from establishing the financial losses it claims to have incurred as a result of GrainCorp's alleged breaches of the LTSA and, ultimately, may be deprived of an order for damages should it be successful in the proceedings. In other words, it submits that the further Hart evidence is relevant and critical to an aspect of Goodman Fielder's case, namely, the quantum of its damages.
Second, it submits that GrainCorp will suffer no substantive prejudice if leave to re-open is granted. This is said to be because the further Hart evidence is of a narrow compass as it relates to the quantification of damages, adopts the same methodology as the evidence served to date and is being adduced to address admissibility issues only.
Third, Goodman Fielder submits that the grant of leave to adduce the further Hart evidence is consistent with the case management principles in the CPA as it concerns a limited and narrow question of admissibility. It contends that any delay caused by the application has been minimised by the procedural approach taken at the main hearing to continue the case, rather than seeking to adjourn to provide time to adduce evidence in admissible form. It also submits that any prejudice from the delay and costs may be appropriately remedied by a cost order in favour of GrainCorp.
Fourth, Goodman Fielder submits that it did not make a deliberate strategic decision not to adduce the further Hart evidence during the main hearing for some tactical or strategic advantage. Rather, it says that the further evidence is directed towards the admissibility of information which is in a format that had been disclosed to and commented on by GrainCorp during the course of the proceedings. While accepting that GrainCorp was entitled to raise any objections prior to the main hearing, Goodman Fielder submits that doing so was surprising in the context of the engagement by the parties on issues raised by Goodman Fielder's damages evidence.
Finally, Goodman Fielder submits that it has been prompt and pro-active in raising and addressing the issue as it identified and disclosed an intention to seek to adduce further evidence and make this application during the course of the main hearing and before its case was closed.
GrainCorp take issue with Goodman Fielder's submissions and contends that granting leave to adduce the further Hart evidence should be refused because, overall, granting such leave would not be consistent with ss 56 to 58 of the CPA.
GrainCorp submits that the further Hart evidence goes beyond the scope of the further evidence foreshadowed at the main hearing which, it says, referred to a process of "comparison" between the new SAP reports with the data relied upon in preparing Hart 1. It argues that the further Hart evidence does more than compare as it includes "re-created" final spreadsheets and evidence of the methodology employed in preparing them which goes beyond the evidence in the previous affidavits. It also submits that the further Hart evidence corrects a significant number of errors, which Mr Hart describes in Hart 5 as "variances".
GrainCorp contends that what was foreshadowed by Goodman Fielder was a limited application to re-open to supply a missing piece to shore up the admissibility of the fourth amended AU spreadsheet and the third amended NZ spreadsheet. GrainCorp also submits that the degree of relevance and probative value of the further Hart evidence is slight as the flaws in the methodology adopted by Goodman Fielder to prove its damages means that the further Hart evidence will not establish that GrainCorp is liable for the amounts referred to in the final spreadsheets.
I do not accept GrainCorp's submission that the further Hart evidence goes beyond what was contemplated at the main hearing or that it has resulted in a "root and branch recreation" or recasting of Goodman Fielder's damages evidence after the closure of its case.
In my view, it was made clear at the main hearing that the process of comparison to be undertaken by Goodman Fielder would result in new spreadsheets and that the evidence it would seek to adduce, if given leave to re-open, would be those new spreadsheets and an affidavit explaining the process, rather than evidence which would render the fourth amended AU and third amended NZ spreadsheets themselves admissible. When discussing the further evidence Goodman Fielder would be seeking to adduce at the main hearing, Goodman Fielder's Senior Counsel referred to a process whereby the data in the SAP reports exhibited to Hart 4 would be applied to its methodology and, in practical terms, result in a "fifth Australian schedule" and a "fourth New Zealand schedule" (T135:6-21). She also referred to the evidence including "further amended schedule[s]" and further affidavits (T210:35-45 and T211:25-30) and made "the promise" of a "spreadsheet" (T276:45-50).
The final spreadsheets have the same structure, include the same data fields and adopt the same methodology to calculate damages as the spreadsheets considered at the main hearing. They contain the same number of data rows (16,224 for AU and 3,771 for NZ) and a common number of columns (67 for AU and 55 for NZ). While there are additional columns in the final AU and NZ spreadsheets, they do not appear to contain SAP data or impact on the loss calculations relied on by Goodman Fielder. In my view, they do not have the effect of re-casting Goodman Fielder's damages evidence into something new or different than that which has been adduced previously.
Nor, in my view, does Hart 5. While it includes more detail than Mr Hart's previous evidence concerning the process of extracting the new SAP data and how that data is used to create the final spreadsheets, Hart 5 elaborates on, rather than changes the nature of, Mr Hart's evidence. It is also not surprising that Hart 5 goes into detail about the process undertaken given the application is made to adduce evidence to cure the inadmissibility of Mr Hart's previous evidence and the earlier versions of the spreadsheets. As noted above, it was also contemplated at the main hearing that the evidence the subject of Goodman Fielder's re-opening application would include a further affidavit explaining the process undertaken, which is what Hart 5 does.
As to the variances between the new SAP data and the data contained in the fourth amended AU and third amended NZ spreadsheets, I am not persuaded that they are all properly characterised as errors, lead to the conclusion that something has "gone badly wrong" with Goodman Fielder's preparation of the spreadsheets, or that Goodman Fielder will be significantly prejudiced by having to review them as GrainCorp's submissions suggest.
The pallet height variances are not errors in the data but reflect changes to standard pallet heights introduced in April 2018, after the initial spreadsheets were prepared in 2017. As Goodman Fielder submits, the relevance of the change to pallet heights goes to explaining the different pallet related data points in the spreadsheets. According to Hart 5, adopting the larger pallet size from the new SAP reports also results in lower warehousing costs than those calculated in the fourth amended AU and third amended NZ spreadsheets.
Variances in the invoice data, which affect 94 rows in columns K to M of the final AU spreadsheet, relate to a sub-set of returned products and, according to Hart 5, is data that is not required to calculate, and thus does not impact on, the quantification of Goodman Fielder's damages claim.
The new SAP temperature zone data appears to correct errors to the data included in the fourth amended AU and third amended NZ spreadsheets. They are also relatively large in number, representing around 22% of the entries in Column V of the AU spreadsheets. But according to Hart 5, the net effect of the temperature zone data variances is that Goodman Fielder's time-based storage costs as recorded in the final AU spreadsheet is only AUD$139 higher than the costs recorded in the fourth amended AU spreadsheet, which is not significant in overall terms. Those variances also relate to data which has been included in the different iterations of the spreadsheets since Hart 1.
As to GrainCorp's submission about the relevance and weight of the further Hart evidence, I do not consider it to be appropriate, on this application, to determine the strength of the competing positions on Goodman Fielder's damages methodology which are the subject of detailed oral and written submissions. Suffice to say there are significant disputes between the parties on the damages methodology adopted by Goodman Fielder, as well as on liability and causation, the resolution of which will be the subject of my reasons in due course and may, or may not, result in all, some or none of the damages claimed being awarded.
No submission was made or evidence led by GrainCorp that it conducted the hearing or made forensic decisions on the basis that Goodman Fielder was not pursuing a damages claim for the Relevant Period or that it did not understand that the quantification of Goodman Fielder's damages was dependent on the spreadsheet format. Nor was any submission made that leave to re-open should be refused because the further Hart evidence is also inadmissible. When asked about that at the hearing on the motion, GrainCorp's Senior Counsel accepted that the problems identified at the main hearing had been rectified to a large extent, although he noted that there may be some issues about Mr Hart's evidence that remain, without identifying what they were (T29:45 - T30:1).
The quantification of Goodman Fielder's damages claim relies on the totality of the information contained in the final spreadsheets. While some columns in the fourth amended AU and third amended NZ spreadsheets relating to third party warehouse costs were admitted, the data from the new SAP reports, as contained in the final spreadsheets, provide the foundation for Goodman Fielder's calculations of its time-based warehousing and returned product losses and Ms Thompson's opinion in respect of working capital cost losses.
In other words, if Goodman Fielder is not granted leave to adduce the further Hart evidence and succeeds on liability it will not be in a position to quantify any damages in respect of the Relevant Period. No alternative methodology or data supporting the current methodology has been put forward by Goodman Fielder. While it has now also applied for referral of its damages claim, on the second last day of the main hearing, Goodman Fielder's Senior Counsel stated that it would not be doing so in respect of the Relevant Period (T212:34-42).
It follows that I am satisfied that Goodman Fielder has established that the further Hart evidence is relevant, has probative value and is important in the sense that it relates to the issues for determination and could affect the outcome of the proceedings in the event that Goodman Fielder succeeds on liability: Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 476G-477A.
I am also satisfied that the further Hart evidence is of a limited and similar nature to that relied on previously, is being adduced in response to the inadmissibility of the previous iterations of the spreadsheets relied on at the main hearing and that granting leave to adduce the evidence should not cause substantive or real prejudice to GrainCorp.
GrainCorp also takes issue with Goodman Fielder's submission that it did not make a deliberate decision not to adduce the further Hart evidence during the main hearing.
GrainCorp submits that Goodman Fielder has failed to provide an adequate explanation for why the original SAP reports were not retained and why, having received the objections to the hearsay nature of the spreadsheet evidence, it did not prepare the final spreadsheets prior to the main hearing and before Goodman Fielder's case closed. In essence, GrainCorp submits that there is nothing to suggest that Goodman Fielder could not have adduced the further Hart evidence at the main hearing and, rather than doing so, it made a deliberate, albeit erroneous, decision about what evidence it could rely on at the hearing.
GrainCorp also submits that this is not a case of misapprehension of some form on the part of Goodman Fielder because, by 3 February 2020, Goodman Fielder was aware that GrainCorp objected to the spreadsheets and decided not to present the evidence which it now seeks leave to adduce. It submits that the principles of finality should preclude the Court from regarding those circumstances as a "misapprehension". Related to this submission, GrainCorp contends that Goodman Fielder has not established that this case falls within one of the four recognised classes of case in which a Court, exercising its discretion, may grant leave to re-open or demonstrated that exceptional circumstances exist for the Court to allow the re-opening.
I accept that this case does not fall neatly within one of the four recognised categories which were recognised by Kenny J in Bradshaw. The further Hart evidence is not fresh evidence and there was no inadvertent error on the part of Goodman Fielder in failing to adduce evidence going to the quantification of its damages claim.
Nor, in my view, was there any misapprehension of fact or law as to the nature of the case that Goodman Fielder was bringing or the defences raised by GrainCorp. Goodman Fielder may have misapprehended the scope of GrainCorp's issues with the spreadsheets based on the exchanges during the course of evidence preparation, but it was on notice that GrainCorp objected to the entirety of the spreadsheets and other parts of the Hart evidence prior to the main hearing. Goodman Fielder served Hart 4 and the new SAP reports in response to those objections and argued at the main hearing, unsuccessfully, that Hart 4 and the fourth amended AU and third amended NZ spreadsheets should be admitted.
In any event, I do not consider that failing to bring the reason for this application clearly within one of the four recognised classes of case in which a court may grant leave should be fatal to Goodman Fielder's application. The categories are not closed and the Court must consider and determine the application on its merits having regard to all the circumstances of the case.
There is some force to GrainCorp's submission that Goodman Fielder's evidence in support of the motion does not fully explain the decision to rely on evidence at trial that was upheld as inadmissible and why it did not adduce the further Hart evidence earlier. The solicitor's affidavit in support of Goodman Fielder's motion does not address those matters.
Nevertheless, the background facts and evidence relating to the engagement between the parties about Goodman Fielder's damages evidence, the arguments advanced at the main hearing on admissibility and the submissions made on this motion, lead me to consider it open to conclude that Goodman Fielder's application to adduce the further Hart evidence arose from an error of judgment that Hart 4 and the new SAP records would render admissible the fourth amended AU and third amended NZ spreadsheets, rather than some deliberate decision made for tactical or strategic reasons not to tender evidence of the quantification of its losses in the form of the further Hart evidence.
Whether that error was due to a want of forethought, a misapprehension of law or a deliberate decision about what evidence Goodman Fielder could rely on at the main hearing is, to my mind, not significant. The authorities distinguish between cases of mistake or misunderstanding, including of counsel, and cases conducted on a particular basis from which a party later seeks to resile: see for example, Urban Transport Authority of NSW v Nweiser and Bradshaw.
In this case, the very nature of the error, being to rely on evidence that was held to be inadmissible, invites further evidence to be adduced. But for the complexity of the spreadsheet evidence, the consequence of the error could have been cured by adducing similar evidence in admissible form during the course of the main hearing. It is also a case where the evidence which is now sought to be adduced is of the same type and in the same format as the evidence that was considered by the Court and GrainCorp prior to and at the hearing.
In support of its submissions, GrainCorp referred the Court to the principles applied in Bradshaw, Spotlight and The Owners - Strata Plan 61233 v Arcidiacono (No 2) [2019] NSWSC 1876 (Strata Plan v Arcidiacono (No 2)), all cases in which leave to re-open to adduce further evidence was refused. The parties were unable to identify an authority analogous to the present case, where the prospect of an application for leave to re-open was raised during the course of a hearing following the rejection of evidence on admissibility grounds and then made after the closing of each party's case. The parties' supplementary submissions referred me to the principles to be applied on the exercise of the Court's discretion to grant an adjournment, which raise similar considerations to those referred to at [40], [41] and [47].
In Bradshaw, the party seeking leave to re-open had informed the other party that it considered that quantum of loss was irrelevant prior to trial. It had opened and closed its case on that basis and was aware that the other party would be advancing a submission that they could not succeed without evidence quantifying loss. In those circumstances, Kenny J concluded that a deliberate decision had been made not to lead evidence of loss and that the public interest in the finality of litigation weighed strongly against departing from the basis on which the party had conducted its case: Bradshaw at [28].
In Spotlight, the application for leave to re-open was made after the judge sent to the parties a detailed memorandum referring to possible findings on damages and proposed re-convening a hearing to hear submissions on whether the applicant wished to re-open its case on damages. This was after an 11 day hearing in which all issues had been debated at trial, including the assessment of damages, final submissions had been made and judgment was reserved. It was in that context that the Court of Appeal allowed an appeal from the grant of leave to re-open by the trial judge and found that the need for finality in litigation and the difficulty in defining and protecting the boundaries of the re-opened issues were good reasons why exceptional circumstances were required before the Court would allow the case to be re-opened when judgment had been reserved.
In Strata Plan v Arcidiacono (No 2), the application for leave to re-open was made after reasons for judgment had been published in which the Court concluded that the evidence adduced by the plaintiff had not established reasonable necessity for the easement sought. The evidence which was sought to be adduced on the re-opening application was also different in nature to that which had been relied on at trial.
The position in this case is, in my view, very different. Goodman Fielder did not deliberately choose not to advance evidence in support of the quantification of its damages claim. As the procedural history of these proceedings demonstrates, Goodman Fielder sought to quantify damages in detailed spreadsheets. It led evidence identifying the various sources of data contained in the spreadsheets and the methodology upon which it calculated its losses. Relevantly, GrainCorp engaged with that evidence in a substantive way, including by inserting its own data into the spreadsheets, and Goodman Fielder responded by producing further iterations.
At the main hearing, and before Goodman Fielder's case closed, GrainCorp was on notice that, in response to the rejection on admissibility grounds of aspects of the fourth amended AU and third amended NZ spreadsheets, Goodman Fielder did not consider that its evidence on the quantification of its claimed losses was complete and that it would be seeking leave to adduce further evidence in the nature of further spreadsheets. The main hearing proceeded and judgment was reserved on that express basis. Thus, the quantification of Goodman Fielder's damages claim had not been fully debated at the main hearing and the case did not close on the understanding that it had been.
The further Hart evidence is also of the same nature and character as the evidence which had been disclosed to and commented on by GrainCorp and that which Goodman Fielder indicated it would seek to leave to re-open to adduce.
While the matters referred to at [86] to [88] do not, of themselves, lead to the conclusion that Goodman Fielder's application for leave to re-open should be granted, in my view, they provide some explanation for why the approach taken in other leave to re-open cases and the principles that there must be exceptional circumstances warranting the grant of leave and that presentation of evidence by parties to litigation must conclude at the end of a hearing might not be as apposite or strictly applied in this case.
As to the other factors which GrainCorp submits justify leave to re-open being refused, the most compelling of these are, to my mind, the private and public interest in the finality in litigation and the practical prejudice that would arise from any grant of leave to re-open, being the inevitable delay in the proceedings and additional costs.
GrainCorp's solicitor swore an affidavit but did not set out the steps they believe would need to be taken to deal with the further Hart evidence if leave to re-open is granted and the further Hart evidence admitted. That said, Goodman Fielder accepts that, if the Court grants leave to re-open, directions should be made to allow GrainCorp an opportunity to put on evidence in reply, a further half day of hearing time may be required for cross-examination of Mr Hart and further written submissions will need to be exchanged.
Goodman Fielder has taken more than two years to adduce its damages evidence which was ultimately held to be inadmissible and final written submissions were completed by 9 March 2020. The further steps will take at least one month and likely longer based on the availability of the Court's resources for a further hearing. Granting leave to re-open at this stage will require additional Court time and delay judgment for a further period of time.
As GrainCorp submits, a costs order may not always undo the prejudice a party suffers from delay occasioned by an adjournment or the grant of leave to re-open and an application such as this should not be approached simply on the basis that a party is entitled to re-open subject to payment of costs by way of compensation. Delay and costs are undesirable and delay has deleterious effects, not only upon the parties, but to other litigants: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [5], [98]-[99], [111]-[114].
[6]
Determination and orders
As noted above, the overriding and guiding principles are whether, in the circumstances of this case, it would be consistent with the just, quick and cheap resolution of the real issues in the proceedings and in the interests of justice to grant leave to re-open to Goodman Fielder to adduce the further Hart evidence. While very finely balanced, I have come to the conclusion that it is.
The further Hart evidence relates to a key aspect of Goodman Fielder's claim for damages. Without it, the Court has no basis to assess and quantify Goodman Fielder's damages which is an issue that has been the subject of other evidence and extensive submissions on methodology and heads of loss.
The further Hart evidence is in the same form and of the same nature as the evidence that GrainCorp has already had an opportunity to consider in detail and that which Goodman Fielder foreshadowed, prior to its case closing, would be sought to be adduced pursuant to an application for leave to re-open. The re-opening is directed solely to curing the ruling on the admissibility of Goodman Fielder's quantum evidence at the main hearing and to allow evidence to be adduced in support of the numerical value of any damages which may ultimately be awarded in the event that Goodman Fielder succeeds on liability and GrainCorp's cross-claim fails.
While further steps in the proceedings will be required, this is not a situation where the boundaries of the re-opened issues are hard to define and difficult to protect: cf Spotlight at [18]. The re-opening is on the limited issue of the quantification of Goodman Fielder's damages and will not require consideration of other matters, such as liability or the methodology for calculating heads of loss. In essence, the claim that Goodman Fielder wishes to advance by the further Hart evidence is precisely the same damages claim it wanted to advance at the main hearing, except that the quantum of its claim is now slightly higher.
Other than costs and delay, I am satisfied that no real hardship or prejudice has been shown as flowing from the grant of leave.
I accept there is a public interest in the finality of litigation and the Court must seek to manage these proceedings expeditiously and efficiently. But, in the circumstances of this case, I do not consider that it would be just nor consistent with case management principles if Goodman Fielder were not able to re-open to adduce evidence in support of the quantification of its damages claim. I also consider that an appropriate costs order in favour of GrainCorp will go, at least some way, to dealing with the practical prejudice from granting leave to re-open.
I have deferred making any costs order at this stage to allow the parties to make submissions as to what they contend is an appropriate cost order and what steps in the proceedings it should apply to. I only note that, as Goodman Fielder is being granted what might be considered to be an indulgence, my preliminary view is that GrainCorp's costs of this notice of motion should be paid by Goodman Fielder on an indemnity basis.
For these reasons, I make the following orders and directions:
1. The plaintiffs be granted leave pursuant to rules 2.1 and 29.5 of the Uniform Civil Procedure Rules 2005 (NSW) to re-open its case for the purpose of adducing further evidence in the form of the affidavit of Phillip Joseph Hart affirmed 6 March 2020 and exhibit PJH-5 to that affidavit (further Hart evidence).
2. The defendants to serve by 17 June 2020 any objections and any evidence in reply to the further Hart evidence.
3. The parties to serve and send to chambers by 24 June 2020 short written submissions on the costs order to be made as a consequence of granting leave to re-open.
4. The proceedings be listed for a further hearing of half a day, on a date to be confirmed, for the plaintiffs to adduce the further Hart evidence and for the cross-examination of Mr Hart (if required).
5. The defendants to serve any further submissions arising from the further Hart evidence within 7 days of the further hearing.
6. The plaintiffs to serve any reply submissions arising from the further Hart evidence within 14 days of the further hearing.
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Decision last updated: 10 June 2020