CIVIL PROCEDURE - Whether leave should be granted to rely on affidavit evidence served late - issues as to lack or relevance and inadmissibility of evidence.
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CIVIL PROCEDURE - Whether leave should be granted to rely on affidavit evidence served late - issues as to lack or relevance and inadmissibility of evidence.
The Second - Fourth Defendants' application for leave to rely on late affidavits
Mr Gregory Harris and Ms Monica Brown have brought derivative proceedings, in the name of Sirrah Pty Ltd (in prov liq) ("Sirrah") against the Second - Fourth Defendants, Mr William Harris, Ms Michelle Harris and Harris Healthcare Pty Ltd ("HHC"), in respect of, inter alia, certain dealings with property and funds of Sirrah, and they also bring oppression claims. The proceedings are listed for hearing commencing 23 March 2021 and the Second - Fourth Defendants have abandoned an application they had previously filed to seek to vacate that hearing date.
On 23 October 2020, the Court extended the time for the Second - Fourth Defendants to file evidence (as they had previously been ordered to do on 10 August 2020) until 11 December 2020, on the basis that no further lay evidence was to be relied on if not filed and served by that time without leave, and extended the time for them to file and serve expert evidence to 20 January 2021, again on the basis that no expert evidence was to be relied on if not filed and served without leave. By my judgment in respect of that extension of time, I noted that I would accept the Second - Fourth Defendants' estimate of the eight weeks they considered they required for lay evidence, on the basis that they must expedite matters to lead that evidence within the minimum time they estimated, and would extend the time for them to lead lay and expert evidence, leaving sufficient time for the Plaintiffs' expert evidence in reply and maintaining the allocated hearing dates. The Second - Fourth Defendants did not file those affidavits or expert evidence within that time.
By Notice of Motion filed on 8 February 2021, the Second - Fourth Defendants, initially sought leave to rely on 17 affidavits filed later than the date for filing of evidence ordered by the Court and two outlines of evidence of witnesses, and leave to file and serve an expert report of Mr Hillig to be filed on or before 22 February 2021. The Second - Fourth Defendants subsequently abandoned the application for leave to read six of those affidavits and the two outlines of evidence, presumably recognising that that evidence was not relevant to the matters in issue in the proceedings or not in admissible form or both, and abandoned the application for leave to rely on the report of Mr Hillig.
The Second - Fourth Defendants relied on an affidavit of their solicitor, Mr Amirbeaggi dated 22 January 2021 in respect of this application. Mr Amirbeaggi there rightly recognised the orders that had previously been made and referred to the fact that he had initially estimated some ten witnesses' evidence would be led and that had expanded to twenty witnesses. In the event, the number of witnesses has again contracted as noted above, and issues arise as to the relevance and form of several affidavits of the remaining witnesses to which I refer below. Mr Amirbeaggi also referred to other matters which he suggested had caused the delay, including the end of year period, the issue of summonses for examination by the provisional liquidator of Sirrah in the Federal Court of Australia and ongoing production of documents in respect of those summonses. Mr Amirbeaggi also referred to work which had been done by him and his staff to prepare affidavit evidence and to the dates on which the relevant evidence was filed.
By his second affidavit dated 8 February 2021, significant parts of which were admitted as submission only, Mr Amirbeaggi referred to the level of resources which had been involved in the preparation of evidence. Regrettably, it seems to me that the level of resources which has been been required will have been significantly increased because the affidavits on which the Second - Fourth Defendants rely were not limited to evidence which was relevant and admissible. That may raise a question, which should be deferred until after the determination of the substantive hearing in the proceedings, whether the Court should make orders in its supervisory jurisdiction over legal practitioners which prevent the Second - Fourth Defendants' solicitors from seeking to recover the costs of the preparation of obviously inadmissible and irrelevant evidence from the Second - Fourth Defendants. Mr Amirbeaggi also sets out the amount of work that had been done and leads evidence, admitted as submission, intended to suggest that the leading of the late evidence would cause no prejudice to the Plaintiffs. Mr Amirbeaggi also outlined the orders previously made, over a long period, in respect of the preparation of these proceedings for hearing.
Mr Sirtes who appears for the Second - Fourth Defendants, submits, and I accept, that the Court must determine the application whether to grant leave for the Second - Fourth Defendants to rely on the late evidence by reference to the principles set out in ss 56-58 of the Civil Procedure Act 2005 (NSW), and particularly the overriding purpose of achieving the just, quick and cheap resolution of the real issues in the proceedings. He submits, and I accept, that the Court must seek to act in accordance with the dictates of justice in giving effect to the overriding purpose, and may refer to the extent to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the relevant parties' control and the degree of injustice that would be suffered by the respective parties as a consequence of any order for directions. Mr Sirtes also submits, and I accept, that Mr Amirbeaggi's evidence identifies that significant resources that have been devoted to preparing the relevant evidence, although it appears that a significant part of that effort has been wasted, so far as a number of affidavits were not relevant or admissible and are now sought to be relied on; significant parts of other affidavits are now not sought to be read; and other parts of affidavits do not seem to relate to any matters in issue in the proceedings. Mr Sirtes submits that there would likely be little prejudice to the Plaintiffs in responding to the evidence, where the proceedings are listed for hearing commencing 23 March 2021 and, as I noted above the Second - Fourth Defendants no longer seek to vacate that hearing date. It seems to me that the Plaintiffs would likely have sufficient opportunity to reply to the evidence within that period, particularly if they restricted that reply to evidence which was relevant to the matters in issue and admissible.
Mr Sirtes also referred to the time which had been taken to reach a hearing date although that is not a matter which wholly assists the Defendants. There is, it seems to me, no principle that, because there have previously been delays in preparing a matter for hearing, then further delays should be permitted to achieve a perverse consistency, rather than the Court making orders to seek to achieve the just, quick and cheap resolution of the real issues in dispute in the proceedings. Mr Sirtes also submits that much of the evidence served is responsive to the Plaintiffs' evidence and the provisional liquidator's report. However, the relevance of the evidence must be determined by reference to the matters and material facts that are pleaded in the proceedings. I will return to that matter below.
The Plaintiffs rely on the affidavit dated 16 February 2021 of their solicitor, Mr See, in response to the application for leave to lead the further affidavit evidence and other applications. Mr Wells, who appears with Mr Anderson for the Plaintiffs, identifies several matters which the Plaintiffs contend should be taken into account in determining the interests of justice in respect of the application for leave to rely on the Second - Fourth Defendants' late affidavit evidence. He refers, first, to an absence of apparent relevance of the evidence in respect of which leave is sought. There is substantial force in that submission, although that difficulty has been reduced by the fact that several irrelevant affidavits are now not sought to be read and that significant irrelevant portions of some other affidavits are now not sought to be read.
Mr Wells points in particular to the extensive evidence about a "mushroom farm" which was operated by the Harris family, or some of its members, prior to the events in issue in these proceedings. It appears from oral submissions that this evidence relates to an unpleaded issue, where irrelevant evidence has been led and then responded to, but that evidence is not relevant to any pleaded fact in the proceedings. This matter was addressed, following the hearing of this application, by the Second - Fourth Defendants indicating they would not read specified evidence as to that issue and the Plaintiffs indicating they would also not read evidence as to this issue where the Second - Fourth Defendants did not do so. Mr Wells also points to extensive and possibly inadmissible evidence in the several affidavits as to Mr William Harris' work ethic or skills as manager of the business (or at least individual witnesses' perceptions of that matter) which also do not appear to be relevant where the Plaintiffs do not contend that Mr Harris did not work hard or did not lack managerial skills, but instead that his pleaded actions amount to oppression and breach of director's duties in respect of the conduct of Sirrah's affairs. The proof of a good work ethic or managerial skills is not an apparent answer to the Plaintiffs' pleaded case.
Mr Wells also submits that a grant of leave would be prejudicial to the Plaintiffs, several weeks prior to the commencement of the hearing, because they would be required to prepare lay and possibly expert evidence in response to a very substantial volume of evidence. I am not persuaded by that submission, since the Plaintiffs could properly have regard to relevance and admissibility in determining the scope of the evidence to which they respond, and the significance of this issue has also been reduced by the extent of evidence that the Second - Fourth Defendants will not now read. Mr Wells also submits that Mr Amirbeaggi's evidence led by the Second - Fourth Defendants in support of the application amounts to assertion and submission and does not provide cogent evidence explaining the delay. Mr Wells also takes issue with an asserted difficulty in the Second - Fourth Defendants' obtaining documents from the provisional liquidator of Sirrah. It is not necessary to consider that matter in order to determine this application.
[3]
Determination
I now turn to the particular affidavits as to which the Plaintiffs seek leave to rely, notwithstanding their late service. First, the Plaintiffs seek leave to rely on an affidavit dated 16 December 2020 of Ms Charlton, on the basis that they would not read paragraphs 4-6, 9-11, 19-26, 28-31 and 33 at the hearing. In the paragraphs that are sought to be read, Ms Charlton refers to having accepted the position of Chief Executive Officer and Director of Nursing at a nursing home in issue in the proceedings, Cabrini, in April 2016 and expresses an apparently irrelevant and possibly inadmissible opinion as to the way in which that nursing home was run. There is no suggestion that any adverse proposition as to the standard of that facility is put by the Plaintiffs. Ms Charlton also leads evidence, which may be admissible as to first hand hearsay, as to statements made by Mr William Harris as to development plans in respect of Cabrini and gives apparently inadmissible evidence as to the way in which management fees payable to HHC were determined. Ms Charlton gives evidence of the circumstances of the sale of Cabrini, although it is not apparent that Mr Harris's motives for that sale are in issue, and gives apparently inadmissible evidence as to Mr Harris's abilities as a manager. It seems to me that what is now sought to be read by the Second - Fourth Defendants in Ms Charlton's affidavit is irrelevant or inadmissible, and I am not satisfied that the just, quick and cheap resolution of the issues in dispute would be promoted by granting leave to rely on that evidence. It seems to me that the parties' and Ms Charlton's time would be wasted and further costs incurred by the parties if that leave were granted, and the evidence was then rejected on objection when it was sought to be read.
The Second - Fourth Defendants seek leave to rely on the affidavit dated 14 February 2020 of Mr Greg Anderson, with the exception of paragraph 15 which would not be read. Significant parts of that affidavit may be inadmissible or irrelevant or both. However, Mr Anderson leads evidence which may be relevant and admissible as to the basis on which management fees paid by Sirrah to HHC were set, which is a significant issue in the proceedings. On balance, it seems to me that I should grant leave to rely on that affidavit, so far as part of it may be relevant and admissible, and the issues as to other irrelevant and inadmissible material can be dealt with by objection at the hearing.
The Second - Fourth Defendants seek leave to rely on an affidavit dated 21 December 2020 of Mr David Nelson, who refers to carrying out valuations of the Cabrini business over an extended period. It may be that this affidavit is intended to demonstrate that activities of Mr Harris led to an increase in the value of the Cabrini business, and Mr Sirtes foreshadowed that it might be relied on in respect of unpleaded claim for an allowance for skill and effort if the Court were to order an account of profits. However, the material facts supporting that claim so far as they relate to the value of the business at particular points in time or Mr Harris' contribution to it are not pleaded. It seems to me that the Court should not grant leave to rely on that affidavit, where the scope of any issue between the parties to which it would be relevant has not been identified by pleadings, so as to allow procedural fairness to either party in respect of that issue.
The Second - Fourth Defendants seek leave to rely on an affidavit dated 18 December 2020 of Mr Pulleine, other than part of paragraph 12, paragraphs 15, 17-19, part of paragraph 20, 21-32 and 34 will not be read. What is left of that affidavit deals, in the early part, with a mushroom farm which is not in issue in the proceedings (and as to which the Second - Fourth Defendants do not seek to read evidence in other affidavits) and as to which Mr Pulleine's evidence is inadmissible in form; the financial position of the Cabrini business prior to the matters in issue in the proceedings, which does not seem to me to be relevant to any pleaded facts; several statements made by Mr William Harris to Mr Pulleine as to the conduct of the Cabrini business; and a statement made by Mr William Harris as to the circumstances in which the Scooti motor scooter business was established. I gave consideration to whether the last paragraph may be relevant; it seems to me that it is not, so far as it contains an assertion that Mr Harris was building the Scooti business for the "Harris family" as distinct from supporting any contention that the business was being conducted on behalf of Sirrah. I am not persuaded that it would be in the interests of the just, quick or cheap resolution of these proceedings to grant leave to read Mr Pulleine's affidavit, given these matters.
The Second - Fourth Defendants rely on the affidavit of Mr William Harris's former wife, Ms Bernadette Harris dated 20 December 2020, other than paragraphs 5-49 (which largely relate to the mushroom farm), 50-61, 63-75, 80, part of paragraphs 84 and 85, 86, 91, 98, 101, 110, 124 and 131-132 which would not be read at the final hearing. The parts of the affidavit that would be read relate to the conduct of the nursing home at Cabrini; the capacity of Mr Harris's parents which does not seem to be in issue so far as a transfer of a share to Mr Harris is challenged; and Ms Harris's state of mind to whether taking over the Cabrini business was a benefit, which may not be relevant or admissible. Ms Harris also leads evidence as to steps which were taken to "avoid losing Cabrini to the Bank" and to statements made by Mr Harris's mother in that respect and as to Mr Harris's commitment to the relevant business and provides evidence of later events. I have reservations as to whether a significant part of Ms Harris's evidence would ultimately be admitted, over objection, but I have concluded, with hesitation, that the just resolution of the real issues in the proceedings will be promoted by granting leave to rely on that affidavit, out of time, despite that difficulty.
The Second - Fourth Defendants seek leave to rely on the affidavits dated 21 December 2020 of Michelle Harris and dated 21 January 2021 of Mr William Harris, as to which the Second - Fourth Defendants no longer seek to read paragraphs 6-20, 25-32, 34-71 and 79 (largely relating to the mushroom farm), 86-91, 103-106, 123-124, 126-127, 131-134, 177-183, 191-195, 221, 224, 229, 232, 245, 248-255, 261-263 and 292-294. It seems to me that the difficulties as to relevance and form in Mr Harris' affidavit have been significantly reduced, although not necessarily eliminated, by the large parts of it that will no longer be read and that should also address any difficulties for the Plaintiffs in leading evidence in reply. Where Ms Harris and Mr Harris are individual Defendants in the proceedings, it seems to me that the interests of justice will be served by granting leave to rely on their evidence, and dealing with any questions of relevant or admissibility of that evidence at the hearing.
The Second - Fourth Defendants also seek leave to rely on the affidavit of Mr Rebollido, other than for paragraphs 5, part of paragraphs 8 and 9, and paragraphs 12 and 14-15 which would not be read at the substantive hearing. Mr Rebollido leads evidence, which may be rejected for form, as to the manner in which payments to Mr Harris were recorded in HHC's accounts and leads evidence as to international transfers to Bali and Fiji which may be adverse to Mr Harris, but also may not be in admissible form. Mr Rebollido also leads some evidence, in short form, as to the manner in which financial records for the Cabrini business were kept. On balance, and again with hesitation, it seems to me that I should grant leave to read that affidavit.
The Second - Fourth Defendants seek leave to rely on the affidavit dated 24 December 2020 of Mr Corben, other than paragraphs 6-14 which largely deal with matters relating to a dispute between Mr Harris' parents and the State Bank prior to matters in issue in the proceedings. Mr Corben was previously the accountant for Mr Harris' parents and refers, in what remains to be read in the affidavit, to Mr Harris' parents wish that he continue the Cabrini business. It seems to me that these matters are not relevant to the facts pleaded in the proceedings and I should not grant leave to rely on that affidavit out of time.
The Second - Fourth Defendants also seek leave to rely on the affidavit dated 8 February 2021 of Mr Whitten, a solicitor who formerly acted for them, or Sirrah, other than paragraphs 17-31 which also largely relate to the mushroom farm and dealings between Mr Harris' parents and the State Bank, and paragraphs 38, 40, 69-72, 80 and 93-94. There are also issues as to the admissibility of aspects of that affidavit but part of it may be relevant, so far as it relates to the circumstances in which the "Scooti" scooter business was established. On balance, and with hesitation, it seems to me that I should grant leave to read that affidavit.
Finally the Second - Fourth Defendants seek to rely on an affidavit dated 8 February 2021 of Mr Shaun Madders, an accountant. There are a range of difficulties with that affidavit, but it is sufficient to note for present purposes that annexes a "draft" accounting reconciliation based on unidentified instructions from Mr William Harris together with certain documents. I am not persuaded that that affidavit, and still less a "draft" report, would be admissible and I am not persuaded that it would promote the just, quick and cheap resolution of the real issues in the proceedings to extend the time for that affidavit to be relied on.
For these reasons, I grant leave to the Second - Fourth Defendants to rely on the affidavits (excluding those parts that they have advised are not to be read) of Mr Anderson, Ms Bernadette Harris, Ms Michelle Harris, Mr William Harris, Mr Rebollido and Mr Whitten and their Notice of Motion dated 8 February 2021 is otherwise dismissed. I reserve the question of costs of the motion and, if there is no agreement between the parties as to costs, direct they submit their respective submissions as to that matter not exceeding 5 pages in length within 3 business days.
[4]
The Second - Fourth Defendants' application for leave to withdraw several admissions
By a second Interlocutory Process filed on 9 February 2021, the Second - Fourth Defendants initially sought leave to withdraw admissions in several paragraphs of their Further Amended Defence filed several months ago, on 21 August 2020. The Second - Fourth Defendants have now limited that application to seek leave to withdraw admissions only in paragraphs 11, 26E and 30 of the Further Amended Defence, and that they be granted leave further to amend their Defence so as to deny paragraph 11 of the Amended Statement of Claim; deny paragraph 26E of the Amended Statement of Claim and not admit paragraph 30 of the Amended Statement of Claim. This is the second attempt by the Second - Fourth Defendants to withdraw admissions. The first was made by Interlocutory Process filed on 10 August 2020, which was dismissed by consent on 17 August 2020. The paragraphs in issue in the two applications are not the same.
The Second - Fourth Defendants rely on a further affidavit dated 8 February 2021 of Mr Amirbeaggi in support of the withdrawal of the relevant admissions. The Second - Fourth Defendants did not make written submissions in support of the application to withdraw the admissions in the Defence although Mr Sirtes addressed that matter orally.
Mr Wells in turn submitted that the admissions in paragraphs 11 and 30 of the Defence was made in the Defence filed on 25 February 2019, almost two years ago, and the admission in paragraph 26E was included in the Defence to the Amended Statement of Claim filed on 18 February 2020, about a year ago. Mr Wells submitted that leave to revisit orders made on 10 August 2020 should be refused. The admissions contained in paragraphs 11 and 30 of the Amended Defence do not appear to have been the subject of the earlier application and I would have permitted the application to withdraw the admissions to proceed, in any event, when the earlier application was not pressed rather than determined on the merits.
Mr Wells also refers to the principles relevant to the withdrawal of an admission, pointing to the well-established principle that admissions made with deliberateness and formality, and on advice, would not ordinarily be permitted to be withdrawn; that a clear explanation as to how and why the admission came to be made would generally be necessary; and that withdrawal of an admission may be appropriate where it is shown the admission is contrary to the actual facts and where the admission is made in error; and a lack of attention to a defence at the time it was verified would not ordinarily provide an adequate ground for withdrawal of the admission. Mr Wells submits that the Defendants have not shown with evidence that the admissions are contrary to the actual facts, and have not advanced a sufficiently clear explanation of how and why the admissions came to be made. He emphasises that the Defence to the Amended Statement of Claim was verified by Mr William Harris, both in his own right and as a director of HHC.
I summarised the principles applicable to the withdrawal of an admission in Re Bluemine Pty Ltd (in liq) [2019] NSWSC 1807 at [4] and [6]-[7] and Mr Sirtes did not contest the accuracy of that summary, as follows:
In written submissions, [the relevant defendant] acknowledges that, by reason of r 12.6 of the Uniform Civil Procedure Rules 2005 (NSW), an admission made in a defence cannot be withdrawn except by consent or by leave of the Court. He also points to the fact that, unless and until leave is given to withdraw an admission, no evidence may be led which is contrary to the admission and no submissions can be made which are contrary to the admission: Nominal Defendant v Gabriel [2007] NSWCA 52 at [110]; (2007) 71 NSWLR 150. He acknowledges that a defendant, in seeking to withdraw an admission, must adduce clear evidence of how it was that the admission was made and why it should be permitted to be withdrawn: Rigato Farms Pty Ltd v Ridolfi [2000] QCA 292; [2001] 2 Qd R 455 at 459-460. [Counsel who appears for the relevant defendant] also submits that it may be appropriate to grant leave to withdraw an admission where it was made in circumstances where it was contrary to the actual facts or without due consideration of the relevant matters, and refers to the decision in Drabsch v Switzerland General Insurance Co Ltd (unreported, Supreme Court of New South Wales, Santow J, 16 October 1996) to which I will refer further below. He emphasises that the Court will have regard to all the relevant circumstances, with the overall question being the need for each party to receive a fair trial. …
In submissions in response, the Plaintiffs in turn refer to the case law applicable to the withdrawal of an admission. The relevant principles are set out in the judgment of Santow J in Drabsch v Switzerland General Insurance Co Ltd above, to which reference has been made in many of the subsequent cases. Those principles were in turn applied by Brereton J in Re Dymocks Book Arcade Pty Limited [2013] NSWSC 298, which quoted those principles at length, and noted the several cases which subsequently applied them. Those principles in turn have been summarised by White J (as his Honour then was) in SLE Worldwide Australia Pty Limited v Wyatt Gallagher Bassett Pty Limited [2005] NSWSC 816 at [56], where his Honour observed that:
"It is legitimate and it may be necessary to consider whether the party making the admission did so deliberately, or whether he did so in error, whether the significance of the admission has changed since it was made, for example by reason of other amendments … or whether new evidence has come to light. … Where a party, who is legally advised and does not suffer any disability, deliberately and without mistake, admits liability in whole or in part, and there are no relevant changes of circumstance, prima facie, justice or fairness to both parties does not require it be allowed to change its mind. That is why admissions made with deliberateness and formality are not ordinarily permitted to be withdrawn." [citation omitted]
In that case, his Honour also held that the existence of the reasonable argument against liability, in that case, did not provide sufficient basis to permit withdrawal of the admission. Equally, as the Full Court of the Federal Court observed in Jeans v Commonwealth Bank of Australia Limited (2003) 204 ALR 327 at [18] … the question is one of the attainment of justice rather than trying to apply an artificial approach and, as the case law has also noted, the Court is "after the truth" so that, in principle, an erroneous admission should be able to be withdrawn unless other factors outweigh that factor."
I also there observed (at [10]) that:
"there exists a prejudice to the public interest, where a serious admission is made as to a significant matter, namely the appointment of a liquidator; that admission is verified, on oath, by affidavit; and it is then sought to be withdrawn, with the only justification given that the party who made it did not, on his solicitor's account, pay any particular attention to the proceedings at the time the admission was made. That approach, it seems to me, would fundamentally undermine the requirement for verification of Defences, if it were generally used to explain an admission wrongly made by reason of a lack of attention to the Defence at the time it was verified."
[5]
Determination
Paragraphs 10 and 11 of the Amended Statement of Claim presently plead that, by regulation 71 of Table A, the shareholding qualification for directors of Sirrah is one share unless and until fixed by the Company in general meeting; and that Sirrah has not, at any time, fixed the shareholding qualification for directors of Sirrah otherwise. Paragraphs 10 and 11 of the Amended Defence presently admit these allegations. In support of the application for leave to withdraw the admission in paragraph 11 of the Defence, Mr Amirbeaggi refers to paragraph 100 of Mr Whitten's affidavit dated 8 February 2021, which appears to be intended to be a reference to paragraph 99 of that affidavit. That paragraph refers to the lodgement of a Form 484 with ASIC relating to the issue of one share each in Sirrah to Mr Harris and Ms Harris on 25 January 2018, after Mr Whitten received notice in these proceedings that there was a requirement within Sirrah's articles of association for each director to hold at least one share in the Company. Mr Amirbeaggi also refers to paragraph 305 of Mr Harris's affidavit dated 21 January 2021 where Mr Harris refers in substantially the same terms as Mr Whitten to lodgement of that notice with ASIC. Mr Wells responds that the evidence led by the Defendants does not support the withdrawal of the admission in paragraph 11, because it does not suggest that the relevant qualification for directors of Sirrah was ever fixed.
It seems to me that this evidence provides no support for a withdrawal of the admission that Sirrah had not at any time fixed the shareholding qualification for directors of Sirrah other than as one share, as provided by regulation 71 of Table A as pleaded in paragraph 10 of the Amended Statement of Claim. At best, that evidence indicates that, after the events in issue, Mr Harris and Ms Harris took steps to comply with that regulation, as distinct from than taking any step to fix the shareholding qualification at less than one share. The evidentiary basis to withdraw the admission and deny the allegation is not established, both because there is no explanation which shows any error in making it and because there is no evidence that supports the denial of the allegation.
Paragraph 26E of the Amended Statement of Claim pleads that, since on or about 15 December 2017, Sirrah has had no ongoing trading operations and paragraph 26E of the Amended Defence presently admits that allegation. Mr Amirbeaggi refers, in respect of the application to withdraw that admission, to paragraph 99 of Mr Whitten's affidavit, which appears to be a reference to paragraph 98 of that affidavit, which refers to work undertaken through the end of 2009 in respect of the sale of Cabrini's business. Mr Amirbeaggi also refers to paragraph 275 of Mr Harris's affidavit dated 21 January 2021, although nothing in that paragraph refers to ongoing trading activities of Sirrah after the sale of its business. Mr Wells responds by referring to previous statements made by Mr Harris, including to the provisional liquidator, which appear to support the admission that Sirrah had not traded or conducted other business after the sale of its assets in December 2017 and submits that the evidence now led does not support a basis for withdrawing that admission. I am not persuaded that the evidence provides any explanation showing an error at the time the admission was made or any other basis for leave to withdraw the admission.
Paragraph 30 of the Amended Statement of Claim pleads that, from June 1997 until 30 November 2016, the terms of a 1997 Service Agreement were not varied; the 1997 Service Agreement was not renewed; and no other agreement in relation to the provision of management services by HHC to Sirrah was entered into. Paragraph 30 of the Amended Defence admits paragraphs 30(a)-30(b), admits that no express written agreement was entered into between HHC and Sirrah in the relevant period and pleads certain facts as to work done by Mr Harris and a claim to his entitlement to reasonable remuneration for services. In support of this application, Mr Amirbeaggi refers to the paragraph 90 of Mr Whitten's affidavit which refers to the entry of a new Service Agreement between Sirrah and HHC for ongoing management services by HHC to Sirrah on 1 December 2016. That does not advance the application for leave to withdraw the admission in the paragraph 30 of the Amended Defence, since the admission expressly relates to the period to 30 November 2016, and events from 1 December 2016 do not affect it. Mr Amirbeaggi also refers to paragraph 275 of Mr Harris's affidavit, which also refers to the Service Agreement between Sirrah and HHC dated 1 December 2016, and does not support the withdrawal of the admission for the same reason. Mr Wells responds that the matter admitted in paragraph 30 of the Amended Defence was within Mr Harris's knowledge, and there is no explanation of how that admission came to be made.
Paragraph 30 of the Amended Defence is, on its face, apparently well thought out and the evidence provides no explanation of any error in the way it was structured. Mr Sirtes submits that the admission is sought to be withdrawn in order to advance an argument of law which, as best I understood it, was that the fact that Mr Harris or HHC was paid more than provided by the Management Agreement was implicitly an amendment to the Management Agreement. I am again not persuaded that the evidence provides any explanation showing an error at the time the admission was made or any other basis for leave to withdraw the admission.
Mr Wells also submits that the Plaintiffs would be prejudiced by the late withdrawal of the admissions and the need to incur further costs in adducing further evidence in chief, and that the hearing date would be put at risk. I am not persuaded that the narrow application which is now made would have that result. However, it seems to me that the case for withdrawal is here weak, for the reasons noted above, and the prejudice to the public interest in undermining the importance of a verified defence, and the fact that the proceedings have continued on the basis of these admissions for a substantial period, also tend against an order granting leave to withdraw the admissions. For these reasons, I am not satisfied that the application for leave to withdraw the admissions is established. The Second - Fourth Defendants' Interlocutory Process seeking that leave filed on 9 February 2021 is dismissed with costs.
A further issue arose because it appears that the Second - Fourth Defendants had, possibly inadvertently, purported to withdraw an admission without leave by inserting the words "do not" at the beginning of paragraph 54(a) of the Amended Defence. I made orders on 22 February 2021 allowing the Second - Fourth Defendants an opportunity to advise whether those words were pressed or should be struck out and to provide submissions and any evidence relied on for any order, nunc pro tunc, for leave to withdraw the submissions. They did not make such submissions or lead such evidence and I assume that such an application is not pressed. Accordingly, the words "do not" at the beginning of paragraph 54(a) of the Amended Defence must be struck out.
[6]
Orders
I make the following orders:
1 Grant leave to the Second - Fourth Defendants to rely on the affidavits (excluding those parts that they have advised are not to be read) of Mr Anderson, Ms Bernadette Harris, Ms Michelle Harris, Mr William Harris, Mr Rebollido and Mr Whitten and their Notice of Motion dated 8 February 2021 is otherwise dismissed.
2 Reserve the question of costs of the motion and, if there is no agreement between the parties as to costs, direct they submit their respective submissions as to that matter not exceeding 5 pages in length within 3 business days.
3 The Second - Fourth Defendants' Interlocutory Process seeking leave to withdraw admissions filed on 9 February 2021 is dismissed with costs.
4 The words "do not" at the beginning of paragraph 54(a) of the Amended Defence be struck out.
[7]
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Decision last updated: 30 March 2021