Hip Foong Hong v H Neotia and Company

In about October 1990, before the incorporation of the company, Mr Brookfield had contacted the respondent Davey Products Pty Ltd ("Davey Products"). It was a supplier of pumps and Mr Brookfield identified himself as a potential buyer of its pumps. Mr Wilsdon, the South Australian manager for Davey Products, had identified the waste water industry as a potential source of sales for his company's pumps. Two of those pumps known as the Davey Lowara Doc 3 ("the Doc 3 pump") and the Davey Lowara Doc 7 ("the Doc 7 pump") figure prominently in these proceedings. Mr Wilsdon visited Mr Brookfield's premises in the latter half of October 1990 where he was shown a working display unit of the Parco Beaver System. Not long after that, Davey Products commenced supplying Mr Brookfield with Doc 3 and Doc 7 pumps. The Doc 3 pump was to be used as a recirculation pump and the Doc 7 pump was to be used as an irrigation pump in the Parco Beaver System. At a later date Davey Products also supplied Sumprat Pumps to Mr Brookfield. These were of almost identical design to the Lowara Pumps and there was an equivalent model for both the Doc 3 and the Doc 7 pumps. Mr Brookfield, and later the company following upon its acquisition of his business, experienced problems with all models of the pumps supplied by the respondent. The continuance of those problems led to the institution of proceedings in this Court in Action No SG 112 of 1993. Mr Brookfield and the company contended that they had relied upon representations made orally and in brochures supplied by Davey Products to the effect that the pumps would do the particular jobs required of them. In due course the case went to trial before a judge of this Court, Branson J, but the applicants were unsuccessful: their claims were dismissed on 8 February 1996. Their subsequent appeal to a Full Court was dismissed on 12 September 1996 and they were unsuccessful in seeking special leave to appeal to the High Court. That application was refused on 30 May 1997. The claims of both applicants against Davey Products were based in breach of contract, negligent mis-statement and breach of s 52 of the Trade Practices Act 1974 (Cth) ("the TP Act"). The learned trial judge noted in her reasons that neither in the application nor in the statement of claim had any distinction been made between claims for relief on behalf of Mr Brookfield in his own right and claims made by him in reliance of a deed whereby the liquidator of Septic Products had purported to assign all the company's rights and causes of action to Mr Brookfield. The Full Court noted in its joint judgment: "At trial no attempt was made to prove loss or damage suffered directly by Mr Brookfield although it was argued that, quite apart from the deed, the losses of Septic Products were in reality the losses of Mr Brookfield. The trial judge rejected this approach." The learned trial judge found that the claim by the company for negligent mis-statement failed because, whatever the representations that had been made by Davey Products about the capabilities of its pumps, they had been made to Mr Brookfield at a time before Septic Products was incorporated. The pleadings did not allege and the evidence failed to establish any reliance by Septic Products on any representations. Absent reliance, her Honour found that the company had failed to establish the requisite degree of proximity between Davey Products and Septic Products to give rise to a duty of care. On the claim in contract, her Honour found that from mid March 1991 when Septic Products became the purchaser of pumps from Davey Products, all pumps were supplied pursuant to warranty claims. Septic Products only purchased Doc 3 and Doc 7 pumps; it placed no orders for sumprat pumps. Her Honour found that the sales of pumps by Davey Products to Septic Products took place in circumstances where, pursuant to s 14 of the Sale of Goods Act 1895 (SA), an implied condition as to the merchantable quality applied to all the Doc 3 and Doc 7 pumps. Her Honour also held that, at least in the case of the early sales of Doc 3 pumps to Mr Brookfield, there was an implied condition that the Doc 3 pumps were fit for the particular purpose made known by Mr Brookfield to the respondent. The implied condition as to reasonable fitness did not apply in relation to the Doc 7 pumps as her Honour held that they were purchased under contracts "for the sale of a specified article under its patent or other trade name" within the meaning of the proviso to par I of s 14 of the Sale of Goods Act. The particular purpose made known by Mr Brookfield, and through him by Septic Products, for which the Doc 3 pumps were required was held by her Honour to be that they should be suitable for acting as recirculation pumps in Parco Beaver System. The claim in contract failed however. Her Honour held that Mr Brookfield and Septic Products had not made known to Mr Wilsdon the actual purpose for which the Doc 3 pump was required, namely for the purpose of acting as a recirculation pump in the modified system or in the BPS System (a waste water system invented by Mr Brookfield and in respect of which he had received provisional patent approval). Her Honour held that the modification to the filter system initially incorporated into the Parco Beaver System and later into the design of the BPS System altered the working environment of the Doc 3 pumps, that the failures in the Doc 3 pumps were related to the altered environment and that the use of the pumps in the altered environment was not a particular purpose made known to the respondent. There remained the claim under the TP Act. At trial no attempt was made to prove loss or damage suffered directly by Mr Brookfield. Although the liquidator of Septic Products had purported to assign its cause of action under the TP Act to Mr Brookfield, her Honour held that Mr Brookfield, as an assignee, could not recover damages pursuant to s 82 of that Act. Most aspects of her Honour's findings were challenged - all unsuccessfully - in the appeal processes and they are not now capable of further challenge unless the applicants can, as a result of establishing fraud or otherwise convincing the Court that fresh evidence warrants a new trial, have the litigation process reopened. On 16 December 1997 an application was filed in this Court by Mr Brookfield for himself and on behalf of the company. His right to act in the name of the company has not been questioned and I find it unnecessary to express any view on the issue in light of the decision that I reached. The application is inelegantly drafted but, having had the benefit of oral submissions from Mr Brookfield, its effect can be summarised with relative ease. He has made serious allegations of deliberate withholding of information in the proceedings before Branson J and this has lead him to seek an order in terms: "That the cost order be suspended until perjury and fraud charges are laid against Mr Dallis Wilsdon (formerly of Davey Products Pty Ltd)." Apparently, as a result of the trial, the Full Court appeal and the application to the High Court for special leave, Mr Brookfield is facing taxed bills of costs in favour of Davey Products in excess of $380,000; it is that "cost order" that he seeks to defer. On 30 January 1998 Mr Brookfield filed a notice of motion. The first two orders that he sought are set out hereunder: "1. For the suspension of the execution of the judgment of Branson J dated 19 December 1997 (sic) until 2 August 1998 when the application to have judgment set aside will be served and filed. 2. That the respondent make full and proper discovery of all correspondence in its possession or power located at or from its Melbourne office of Davey Products Pty Ltd with relation to its trading with Lowara Pumps in Italy and its trading with Gould Pumps in Singapore and Italy." The date 19 December 1997 should, presumably, be 8 February 1996. The significance of the date, 2 August 1998 was not explained. Mr Brookfield did not advance any reason in support of his apparent inability to apply to have judgment set aside at an earlier date. If, as is the fact, he presently has no evidence supporting his allegations of perjury and fraud, one is left wondering why, after such a long period of time, it might be that such evidence will be forthcoming in, or about, August 1998. Initially Mr Brookfield had indicated that his application to stay the execution of the judgment and his proposed application to have the judgment set aside would be grounded in perjury and fraud. But during the course of his oral submissions, he acknowledged that the material before the Court was of such a nature that he could not presently make out the foundations for a case of either perjury or fraud. He therefore limited his submissions to the alleged deliberate failure on the part of Davey Products and its solicitors to make proper discovery of all relevant documents prior to and during the course of the trial. In order to obtain a new trial, upon the ground that fresh evidence has been discovered (if no charge of fraud or surprise is brought forward) it must be shown that the fresh evidence would clearly favour the applicant: Hip Foong Hong v H Neotia and Company (1918) AC 888 at 894 where their Lordships said: "If no charge of fraud or surprise is brought forward, it is not sufficient to show that there was further evidence that could have been adduced to support the claim of the losing parties; the applicant must go further and show that the evidence was of such a character that it would, so far as can be foreseen, have formed a determining factor in the result. Such considerations do not apply to questions of surprise, and still less to questions of fraud." The commencement point in a consideration of the submissions that Mr Brookfield has made to the Court is a section in the affidavit of Mr Wilsdon dated 30 July 1995 which was used during the course of the substantive proceedings before Branson J. It is necessary to set out pars 64 to 69 inclusive of that affidavit: "64 Davey sold Lowara pumps in Australia, and the Doc and Sumprat range of pumps, for many years. 65 I have made an inspection of Davey records to determine the total numbers of these pumps sold by Davey throughout Australia. I have also made an inspection of Davey records to determine the numbers of these pumps returned to or replaced by Davey in those years. Based on that inspection I have produced a schedule summarising those figures. A copy of that schedule is now produced and shown to me and marked "DW25". 66 A copy of the records of Davey upon which "DW25" is based is now produced and shown to me in a bundle marked "DW26". 67 Of the pump sales referred to in "DW25" I am aware that a number were to manufacturers of waste water treatment systems. I have made an inspection of the records of Davey to determine how many of these pumps were sold to such manufacturers and the number of pumps returned to or replaced by Davey. Based on that inspection I have produced a further schedule summarising these figures. A copy of that schedule is now produced and shown to me and marked "DW27". 68 A copy of the records of Davey upon which "DW27" is based is now produced and shown to me in a bundle marked "DW28". 69 A fire in the office of Davey in Sydney in 1993 destroyed certain records of Davey. Amongst those records destroyed were those which would allow me to determine why a pump was returned to or replaced by Davey. Without those documents I have been unable to undertake that analysis. I do note, however, that my analysis reveals that the financial year ending 30 June 1991 was the only year in which an abnormally high number of returns or replacements were made..." Mr Brookfield identified three areas of complaint in this section of Mr Wilsdon's affidavit. First, he complained about the deposition that certain of the records of Davey Products had been destroyed by fire; he said that the date of the fire was wrong: it was in 1991 and not in 1993. Secondly, he submitted that certain material information that should have been included in Ex DW25 had been deliberately omitted. Thirdly, he pointed to the reference, in Ex DW27, to certain documents and complained that those documents had not been discovered. He raised a fourth complaint in addition. It now seems that certain records of Davey Products that were or may have been relevant to these proceedings (and which were not discovered) were destroyed by Davey Products, allegedly in the ordinary course of business, in August 1996. This was after the Full Court appeal had been heard in May 1996 but before the delivery of its judgment in September. THE FIRE The conduct of Davey Products, on the issue of the destruction by fire of certain of its records in 1991, must now, with the benefit of hindsight, be criticised. Before addressing the contents of Mr Wilsdon's written and oral evidence, it is necessary to have regard first to the affidavit of Robert Leopold Morrow sworn on 4 March 1998 and filed in this Court on the following day for use in these proceedings. Mr Morrow stated that he is and has been the credit manager for Davey Products since October 1985 and that he was the officer of the company responsible for coordinating its defence in the proceedings that Mr Brookfield and Septic Products had instituted against Davey Products. He identified the date of the fire in the Padstow premises of Davey Products in New South Wales as 16 March 1991; he acknowledged that Mr Wilsdon was wrong when he deposed that the fire occurred in 1993. In par 12 of his affidavit, Mr Morrow said that "all records including job cards and Goods Return Advice forms of the Sydney office, other than records of archived material, was (sic) destroyed in the fire". He then added that it was his belief that "records up to 6 months old were considered current and would have been destroyed as they were retained in the office where the fire occurred. Older documents were archived or stored in a different building". He then drew the obvious conclusion, namely, that all records of the company in respect of transactions in New South Wales would have been available in the proceedings other than those that were stored in the premises for the period of six months immediately preceding the fire. It was quite wrong for Mr Wilsdon to depose in his affidavit in par 69 that: "Amongst those records destroyed were those which would allow me to determine why a pump was returned to or replaced by Davey." That statement, if at all accurate, would have only been accurate in respect of the relevant six month period, and then only for the State of New South Wales. In other words, the documents that were destroyed were those from mid September 1990 to mid March 1991. Documents that preceded mid September 1990 would have been available from archives and, of course, documents subsequent to the fire would have been available. The position was no clearer as a result of Mr Wilsdon's oral evidence. Under cross-examination at p 1343 the subject of the fire was raised: "And you suggest that that fire destroyed certain records of Davey? ... Yes, that's correct. You say in your affidavit, exhibit R8 in [par] 69 that amongst those records destroyed were records which would allow you to determine why a pump was returned to or replaced by Davey? ... Correct. You say that without those documents you are unable to make that analysis? ... Yes. ... MR CAMERON: What records do you refer to as having been destroyed in that fire? ... Well, it gutted the complete storage area of the premises. No, that is not the question? ... Sorry. The question was, what were the records which you say were destroyed in the fire? ... I believe that they were job card records and goods return advice records. The goods return advice records were records which you say were kept when goods were returned to the Davey Products business when pumps were replaced free of charge under warranty? ... Yes. The practice where pumps were replaced free of charge under warranty was for those pumps to be collected or provided without any paper work except for the goods return advices? ... Yes. So because of that fire you were unable to satisfy yourself as to how many pumps were in fact replaced free of charge under warranty? ... Yes. Are you unable to ... HER HONOUR: Sorry, did you finish that answer, Mr Wilsdon? ... Yes, I was going to just have second ride (sic) of that answer inasmuch as there was a hardback manilla book kept in the store as a cross reference kept in alphabetical order for pumps that were returned from dealers in New South Wales. MR CAMERON: You understand that that was also destroyed in the fire in Sydney in 1993? ... No, that book was not destroyed in the fire. Have you seen that book? ... Yes, I have." It is apparent, both from Mr Wilsdon's affidavit and his answers in cross-examination that there were inherent mistakes in his evidence. The contents of his affidavit called out for explanation. How could he say that he had searched the records of the company, yet claim that records had been destroyed by fire? That contradiction could have and should have been explored. If, as is highly unlikely, the fire was selective in the damage that it caused, this should have been stated. The existence of this glaring contradiction becomes more obvious with an examination of the contents of Ex DW 27 and Ex DW 28. The book that he mentioned in his last few answers of the above passage in his cross-examination was Ex DW28. The exhibit comprised, in fact, two exercise books and they contained some (albeit limited) details of pumps that had been returned. If the matter was of importance, an examination by Mr Brookfield's advisers of the contents of the two books would have shown that they contradicted the assertion that relevant records had been destroyed in the fire. It is clear that the quoted contents of Mr Wilsdon's affidavit were wrong in material respects. A reader would be entitled to accept that all relevant records referable to the reasons for the returns and replacements of pumps prior to 1993 had been destroyed when, in fact, there were such records available except only for the period September 1990 to March 1991. EXHIBIT DW25 Exhibit DW25 entitled "Schedule of Sales and Returns of Lowara Drainage Pumps" lists details of all sales of Doc 3, Doc 7, sumprat 140 and sumprat 220 pumps throughout Australia in the five financial years commencing 1 July 1988 and concluding on 30 June 1993. 31,387 pumps were sold in that five year period. Exhibit DW25 then contains a heading: "Warranty Replacement Pumps 1990/91 - 1993/94" under which appears the following information: Doc 3 Doc 7 Sumprat Sumprat Total 140 220 1988-89 N/R N/R N/R N/R N/R 1989-90 N/R N/R N/R N/R N/R 1990-91 323 137 282 20 762 1991-92 248 118 161 7 534 1992-93 161 42 39 7 249 1993-94 8 - 5 - 13 740 297 487 34 1,558

There is an endorsement in Ex DW25 to indicate that the symbol "N/R" means "No record". Mr Brookfield has submitted that it was incorrect of Mr Wilsdon to state that there was "No record" in respect of warranty replacement pumps for the 1989 and 1990 financial years. He pointed to the information contained in Ex DW28. The two account books contain hand written entries divided into four columns. The first column shows the date, the second column the name of the customer who returned a pump, the third column gave particulars of the pump model and the fourth column contained a series of figures which presumably represented some form of code or identification that was used by Davey Products. Exhibit DW28 shows that in that two year period in excess of forty Doc 3 or Doc 7 pumps were returned to Davey Products. Mr Brookfield complained, correctly in my view, that it is therefore self evident that it was incorrect to present DW25 in the manner in which it was presented. Although it did not contain any information pointing to the reasons for returns and replacements, it still was a record of pumps that had been returned in those two years. EXHIBIT DW27 Mr Brookfield's next complaint centred upon the contents of Ex DW27. This document purported to set out details of the sales by Davey Products to two business houses that were engaged in waste water treatment; they were described as "Envirocycle" and "Biocycle". The sales were also expressed to be those that had been made by Davey Products in New South Wales and they related to Doc 3, Doc 7, Sumprat 140 and Sumprat 220 pumps. The first section of the exhibit particularises sales in the five financial years commencing 1 July 1988 and concluding on the 30 June 1993 and the next section is entitled "Pump Returns to Davey (NSW) ex Biocycle and Envirocycle". Under that heading, particulars of pumps returned are set out. There is then an enigmatic entry: "See indexed account books x 2 These figures have been collated from Customer Sales Reports, Warranty Transaction Reports, and Return Job Cards over the above period." It would seem that the reference "indexed account books x 2" is, in fact, a reference to the bundle that is marked "DW28". But Mr Brookfield's major complaint is that the documents referred to in the latter part of Ex DW27 as "Customer Sales Reports, Warranty Transaction Reports, and Return Job Cards" were never the subject of discovery by Davey Products. Mr Wilsdon, in his affidavit had alleged that Ex DW27 was a schedule summarising how many of his company's pumps were sold to "manufacturers of waste water treatment systems" and how many were returned to or replaced by Davey Products. There then appears in Ex DW27 the notation, without explanation, about the source material that was used by Mr Wilsdon in the collation of his figures. What reports and what job cards? Where were they housed? When did he examine them? How did he proceed with the collation? If they were included in the records that had been destroyed in a fire - whether in 1993 or 1991 - how was is that Mr Wilsdon was able to refer to them as the source of his collation when he compiled Ex DW27 on 27 July 1995? These were all matters that were open to Mr Brookfield, his company and his legal representatives during the course of the trial. If they were then matters of importance (and I express no view of that subject) they were on notice and they had the opportunity to investigate the matters. It was not a case where the very existence of the documents was unknown to them. In my opinion, the documents described in Ex DW27 as "Customer Sales Reports, Warranty Transaction Reports and Return Job Cards" were discoverable documents in the trial and should have been discovered by Davey Products as part of the usual discovery process prior to the commencement of the trial. I am by no means so certain that all the documents that were used or may have been used in the compilation of the information in Ex DW25 would have likewise been discoverable. Their relevance is in doubt because Mr Wilsdon was simply disclosing details of all sales of all pumps for all purposes throughout Australia. Those purposes included usages other than the usage of pumps in the treatment of waste water. In any event, it is not necessary to come to a final decision on this subject because, notwithstanding that there may have been deficiencies in the respondent's discovery, those deficiencies would have been self evident prior to trial, if Mr Brookfield's advisers had regarded them as matters of importance. Indeed Mr Brookfield acknowledged during the course of argument that he and his legal representatives were aware, prior to and during the course of the trial, of the information that is contained in Exs DW25 and DW27. Mr Brookfield also complained that his solicitors had, on numerous occasions prior to trial, pursued the subject of further and better discovery in correspondence with the solicitors for the respondent. I invited Mr Brookfield to bring to my attention an example of a specific request for discovery of the "Customer Sales Reports, Warrant Transaction Reports and Return Job Cards". However he was unable to produce any such specific request. DESTRUCTION OF RECORDS Finally, and somewhat surprisingly, Mr Morrow explained that in August 1996, the New South Wales office of Davey Products was moved and as a consequence of that move all their old records were destroyed. Mr Brookfield was highly critical of this information alleging that it breached provisions of the Taxation and Corporations Laws which required business houses to maintain records for seven years. Mr Brookfield drew the Court's attention to the decision of the High Court in Allen v Tobias (1957-1958) 98 CLR 367 where Dixon CJ and McTiernan and Williams JJ quoted with approval at 375 the following extract from the opinion of the Privy Council in The Ophelia (1916) 2 AC 206 at 229-230: "If any one by deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case." The difficulty that Mr Brookfield faces in the application of those observations to his case is that the act of destruction in August 1996 preceded by over a year his present application to this Court and occurred some six months after the trial had been completed. None of the issues raised in the appeal to the Full Court addressed the need for the production or examination of the respondent's records. There is no evidence before the Court to suggest that the act of destruction of the records was in any way connected to the relationship that Mr Brookfield and his company had with Davey Products. I am not able to draw any adverse inference in these proceedings against Davey Products as a consequence of the destruction of those records. THE RESPONDENT'S SOLICITORS Mr Brookfield has submitted to the Court that the essential nature of the litigation before Branson J was his complaint that the pumps supplied to him and to his company by Davey Products continuously broke down. His claim is that other customers of Davey Products would have suffered similar difficulties but that he and his company were denied access to the records of Davey Products and thereby denied the opportunity of establishing that it was not just Mr Brookfield and his company who suffered these difficulties. He has gone so far as to allege that the failure to make discovery of "customer sales reports, warranty transaction reports and return job cards" was a deliberate omission by the respondent and that the respondent's solicitors were involved in, and must take responsibility for, the deliberate omission. A solicitor, as an officer of the Court, has a duty to the Court to ensure that the process of discovery is completed in accordance with the Rules of Court. A solicitor must assist and advise his client as to his client's duty and if the client should persist in omitting relevant documents from the affidavit of discovery "it seems to me plain that the solicitor should decline to act for him any further": Myers v Elman (1940) AC 282 at 293 per Viscount Maughan. But there is no evidence, in the circumstances of this case, of a deliberate omission or a deliberate refusal to follow the solicitor's advice. The role of the solicitor was also addressed in Woods v Martins Bank Limited (1959) 1QB 55 at 60 by Salmon J: "It cannot be too clearly understood that solicitors owe a duty to the Court, as officers of the Court, carefully to go through the documents disclosed by their clients to make sure, as far as possible, that no relevant documents have been omitted from their clients' affidavits." (See also the remarks of MacFarlan J in Ferguson v Mackaness Produce Pty Ltd (1972) NSWR 66 at 68-69. Mr Mills, the solicitor for Davey Products, deposed in his affidavit that was sworn on 3 March 1998 for use in these proceedings: "The purpose of the evidence in paragraphs 65 and 66 of the Wilsdon affidavit was to illustrate the number of pumps sold and the number of pumps returned under warranty. It was not evidence as to why those pumps were returned or what fault had occurred. Accordingly documents regarding the problems were not considered to be relevant." What Mr Mills says might be correct as to the purpose of the affidavit, but it is not the point that is presently under consideration. That point is whether there had been a failure by Davey Products to make adequate discovery. The documents dealing with the return of pumps and the nature of the faults were, in my opinion, clearly relevant to the issues in the trial and therefore discoverable. The question then, is what consequences, if any, flow from the respondent's failure to make adequate discovery? There is not, in my opinion, the slightest suggestion of bad faith on the part of the respondent's solicitors. That conclusion is obvious because of the express reference to the "non-discovered" documents in Ex DW27 and because of the contents of Ex DW28. This is a clear case of a genuine mistake about whether or not certain documents were discoverable. INADEQUATE DISCOVERY In Commonwealth Bank of Australia v Quade (1991) 178 CLR 134, Mr and Mrs Quade and other members of their family arranged a foreign currency borrowing in Swiss francs from the Commonwealth Bank of Australia. The value of the Australia dollar as against the Swiss franc decreased dramatically over the period of the loan with the result that the Quade's loan increased significantly in terms of Australian dollars with ruinous consequences. They sued the bank claiming damages for breach of s 52 of the TP Act, breach of the Contracts Review Act 1988 (NSW) and common law negligence. It was common ground that the Quades would succeed on all three causes of action or on none of them. In due course the matter went to trial; the Quades were unsuccessful and their application was dismissed. They appealed to the Full Court of the Federal Court and upon the hearing of the appeal they moved the Court to receive further evidence pursuant to s 27 of the Federal Court of Australia Act 1976 (Cth) and O 52 r 36 of the Federal Court Rules 1979 (Cth). The further documents were bank documents that were produced, after the conclusion of the trial, in recognition of the fact that they had been wrongly omitted from the bank's affidavit of documents that had been filed and served in purported compliance with the order for discovery. (See Quade v Commonwealth Bank of Australia (1991) 27 FCR 569 at 573 per Burchett J). In assessing the importance of the decision in Quade's case it is of significance to note that Burchett J in the Full Court said (at p580) that the Quades had not been lacking in diligence; they had required the bank "to make discovery of documents, and it was entirely the (bank's) default which rendered the evidence unavailable to the appellants." The Full Court determined that the motion to adduce fresh evidence upon the appeal should be allowed with costs and made appropriate orders including an order that there be a new trial. The bank appealed to the High Court by special leave, and with the agreement of the Court and at the request of the parties, the Court confined its consideration of the appeal to the question of "what is the appropriate approach (or "test") to be adopted by an appellate court for determining whether a new trial should be ordered when documents which should have been discovered were not discovered by the successful party." (per Mason CJ, Deane Dawson Toohey and Gaudron JJ at 139). Burchett J in the Federal Court noted at p 580 that the general rule concerning the basis on which a new trial may be granted upon an appellant's claim to have discovered fresh evidence was stated by Dixon J in Orr v Holmes (1948) 76 CLR 632 at 640: "If a trial has been regularly conducted and the party against whom the verdict has passed cannot complain that evidence has been wrongly received or rejected or that there has been a misdirection or that he has not been fully heard or has been taken by surprise or that the result is not warranted by the evidence, the successful party is not to be deprived of the verdict he has obtained except to fulfil an imperative demand of justice. The discovery of fresh evidence makes no such demand upon justice unless it is almost certain that, if the evidence had been available and had been adduced, an opposite result would have been reached and unless no reasonable diligence upon the part of the defeated party would have enabled him to procure the evidence." In their joint judgment, the members of the High Court endorsed the remarks of Dixon J in Orr v Holmes, adding that his Honour had repeated the substance of those comments in Greater Wollongong Corporation v Cowan (1955) 33 CLR 435 at 444 when he said: "If cases are put aside where a trial has miscarried through misdirection, misreception of evidence, wrongful rejection of evidence or other error and if cases of surprise, malpractice or fraud are put on one side, it is essential to give effect to the rule that the verdict, regularly obtained, must not be disturbed without some insistent demand of justice. The discovery of fresh evidence in such circumstances could rarely, if ever, be a ground for a new trial unless certain well-known conditions are fulfilled. It must be reasonably clear that if the evidence had been available at the first trial and had been adduced, an opposite result would have been produced or, if it is not reasonably clear that it would have been produced, it must have been so highly likely as to make it unreasonable to suppose the contrary. Again, reasonable diligence must have been exercised to procure the evidence which the defeated party failed to adduce at the first trial." The other members of the Court in Greater Wollongong Corporation v Cowan, Williams Webb, Kitto and Taylor JJ concurred in the Chief Justice's remarks. The High Court in Commonwealth Bank v Quade emphasised (at p 141) that Orr v Holmes and Greater Wollongong Corporation v Cowan had established that a reconciliation of "the demands of justice" and the "policy" that there be an end to litigation at least prima facie dictates that: "The successful party should be deprived of the verdict in his favour only if the unsuccessful party persuades the appellate court that there was no lack of reasonable diligence on his part and that it is reasonably clear that the fresh evidence would have produced an opposite verdict." The members of the High Court then went on to hold, however, that the stringent rule in the ordinary class of case did not apply in a case, such as that then before the Court, where the unavailability of the evidence at the trial resulted from a significant failure by the successful party to comply with an order for discovery of relevant documents in his possession or under his control. In those circumstances, the Court was of the view that a lower threshold or test would suffice to justify an order for a new trial. The Court declined to enunciate a general rule but noted that it would be necessary for an appellate court to take account of: "a variety of possibly competing factors, including, in addition to general considerations relating to the administration of justice, the degree of culpability of the successful party, any lack of diligence on the part of the unsuccessful party and the extent of any likelihood that the result would have been different if the order had been complied with and the non-disclosed material had been made available. While it is not necessary that the appellate court be persuaded in such a case that it is "almost certain" or "reasonably clear" that an opposite result would have been produced, the question whether the verdict should be set aside will almost inevitably be answered in the negative if it does not appear that there is at least a real possibility that that would have been so."(at 143) CONCLUSION The decision in Commonwealth Bank v Quade is not, of course, on all fours with the present application. For example, it was a case which formed part of the normal appellate process; the issue of "fresh evidence" was one of the grounds of appeal to the Federal Court. In the present case, Mr Brookfield and his company exhausted the appellate process some time ago and are now raising, for the first time, the issue of "fresh evidence" as a prelude to the intended application to apply to have the judgment set aside. I apprehend that the task confronting the applicants in the present case is the more difficult by virtue of them having had the earlier benefits of the appeal system. Nevertheless, it seems to me that the principles that can be extracted from the decision in Commonwealth Bank v Quade may be utilised appropriately in the present proceedings for the purposes of demonstrating that, in the ultimate, this application must fail. The most significant difference, when comparing the facts of this case with those in Commonwealth Bank v Quade, is that in the latter case the Quades did not know and were not lacking in diligence in their failure to know about the documents that were subsequently discovered by the bank. In the present case that cannot be said of Mr Brookfield and the company and their advisers with respect to the undiscovered documents that were described in Ex DW27 as "customer sales reports, warrant transaction reports and return job cards". The insertion of the acronym indicating "no records" in Ex DW25 must now be accepted as inaccurate. Be that as it may, as Mr Brookfield conceded during the course of his submissions, Ex DW28 contains the two account books which, in turn, contain details of pumps that had been returned to Davey Products in New South Wales in the relevant two year period. The disclosure of that information, even though it did not contain information about the reasons for the returns and replacements, did contain sufficient information to contradict the assertion that there were "No Records" and that fact would have been sufficient to alert the applicants and their advisers if they had perceived the issue to be one of importance. Despite Mr Wilsdon's incorrect evidence about the date of the fire, Ex DW27 contained the informative entry: "These figures have been collated from customer sales reports, warranty transaction reports, and return job cards over the above period." That endorsement self evidently acknowledged the existence of additional documents of those descriptions and so Mr Brookfield and his company were thereby alerted to their existence as were their legal advisers. Did they lack diligence in failing to pursue the matters? Perhaps they did not then consider the matters to be relevant; that issue remains unresolved because Mr Brookfield fell back upon his legal representatives stating that he was guided by them; but they have not been given the opportunity to speak in their defence. Whilst it is true that those documents were clearly discoverable and whilst I must reject the explanation advanced by the solicitor for Davey Products that he did not consider them relevant, the fact remains that the existence of those documents was well known to Mr Brookfield and his company. His complaints at this late stage of the failure to make proper discovery of them carry the hallmark of an argument of desperation. In my opinion, the applicants have failed to satisfy me that there was no lack of diligence on their part, in respect of the subject of discovery and the respondent's failure to make proper discovery. There is yet another reason why this application should fail. Mr Brookfield attempted to submit that the production of the missing documents (being those referred to in Ex DW27 as "consumer sales reports, warrant transaction reports and return job cards") would constitute evidence justifying his complaints that the Doc 3 and Doc 7 pumps were, throughout Australia, being returned because of their unsatisfactory performances. That is not correct because the exhibit only referred to dealings with the two New South Wales manufacturers. But let it be assumed at this stage that such a proposition could be correct. Proof of that fact would not assist Mr Brookfield or Septic Products because of her Honour's finding (which was upheld by the Full Court) that he and his company were unsuccessful because of him having modified the Parco Beaver System and used the pumps in the modified system. At p 74 of her judgment, Branson J made the specific finding that there was "a relationship between the established failure of a significant proportion of the Doc 3 pumps supplied to Septic Products by the respondent and the modifications effected by Mr Brookfield to the Parco Beaver System." The issue that must be determined by the Court is whether or not Mr Brookfield has placed before the Court sufficient material to warrant the Court interfering with the due execution of a judgment which, on the face of it, has been properly obtained. Although the Court has a general power to stay the execution of a judgment: O 37 r 10: there is a general principle that a successful party should not be deprived of the fruits of its victory: The Annot Lyle (1886) 11 PD 114 at 116; McBride v Sandland (1918) 25 CLR 369 at 374. Mr Brookfield and his company are attempting to invoke the jurisdiction of this Court to stay the execution of a judgment and exceptional circumstances need to be shown before the Court will exercise its discretion in their favour: Jennings Construction Limited v Burgundy Royal Investments Pty Ltd No 1 (1986) 161 CLR 681 at 684. That was a case dealing with an application for leave to appeal to the High Court and for a stay pending the determination of that application. However I see no reason why the principles propounded in that case should not apply in the present circumstances. The applicants' case, as it developed, backed away from the allegation of fraud even though Mr Brookfield still maintained that there had been a gross dereliction of duty on the part of the respondent and its solicitors in the discovery process. Initially he also alleged perjury on the part of Mr Wilsdon with respect to the date of the fire but the force of that argument dissipated with the clear and frank admissions by the witnesses for the respondent that a mistake had been made and that the correct date of the fire was in 1991. Essentially therefore, the case for the applicants centres upon the alleged non discovery of documents. In particular, the documents that were not the subject of discovery were those identified in Ex DW27 being, the customer sales reports, the warranty transaction reports and the return job cards and, to a lesser extent, the source documents for the information in Ex DW25. I have come to the conclusion that the complaints made by Mr Brookfield on behalf of the applicants on the subject of non discovery of documents are not of sufficient substance to warrant the intervention of the Court. The existence of those documents, and in particular the documents that are referred to in Ex DW27 was there to be seen and Mr Brookfield acknowledged that he did see reference to them during the course of the trial. It is not as if the existence of those documents first came to light subsequent to the date of judgment. Clear and explicit reference was made to them in the document that was compiled by Mr Wilsdon and which became an exhibit to his affidavit. It is true to say that the respondents should have made discovery of those documents. But is equally true to say that Mr Brookfield's legal advisers could have demanded (by reference to the contents of Ex DW27) further and better discovery of the documents that were there identified. Insofar as Mr Brookfield seeks a stay of judgment based upon his intended application to have judgment set aside, I must rate his chances of succeeding in that latter application, on the information presently before the Court, as very slight. I have therefore come to the conclusion that this is not a case where it would be appropriate to stay the execution of the judgment. Having arrived at that conclusion, it follows that it would not be appropriate to consider the application for an order for further and better discovery. In my opinion, the present application should be dismissed with costs. I certify that this and the preceding twenty (20) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Loughlin

Associate: Dated: 19 May 1998 Mr Brookfield appeared in person and on behalf of the second applicant

Counsel for the Respondent: Mr A Besanko QC and Mr G Davis

Solicitor for the Respondent: Messrs Piper Alderman

Date of Hearing: 15 April 1998

Date of Judgment: 19 May 1998