John Bridgeman Limited, in the matter of John Bridgeman Limited v National Stock Exchange of Australia Limited

JACKSON J: 1 This matter has been case managed by Reeves J since its inception and was recently transferred to my docket. Due to ongoing default by the plaintiff (JBL), Reeves J directed that JBL must apply for leave to rely at trial on certain affidavits which were filed later than was required by programming orders. The plaintiff also seeks leave to file and serve a further amended statement claim. The defendant (NSX) opposes these applications on the basis of JBL's ongoing default. 2 JBL is an investment management company, whose issued shares are listed on the National Stock Exchange of Australia, a securities exchange which NSX operates. On 10 April 2019, NSX suspended trading in those shares and the suspension has been in effect ever since. 3 Over NSX's opposition, JBL obtained orders for preliminary discovery on 25 July 2019: John Bridgeman Limited v National Stock Exchange of Australia Limited [2019] FCA 1127. JBL commenced this proceeding on 23 October 2019. On various bases, which are not necessary to describe, JBL seeks a declaration that NSX's decision to suspend trading in the shares was invalid, and of no effect. JBL also seeks injunctions, which would require the reinstatement of the quotation of the shares to the Exchange. Relevantly, JBL also seeks damages. In the statement of claim that was originally filed, the damages were claimed for increased cost of borrowed funds, loss of value of JBL's investment management business and loss of certain opportunities. 4 On 22 November 2019, Reeves J made programming orders, which included the filing of pleadings, and required JBL to file and serve lay evidence and expert evidence by 31 January 2020. That evidence was not filed and served by that date. 5 On 12 February 2020, Reeves J extended the time for the filing of JBL's lay and expert evidence to 21 February 2020. No evidence was filed and served by that date. His Honour also referred the matter to mediation before a deputy registrar of the court to be concluded by 1 May 2020. It appears this mediation conference, in fact, occurred in June 2020. 6 On 13 March 2020, some lay evidence of Mr Stuart McAuliffe, JBL's Managing Director, was filed (out of time). 7 On 7 May 2020, JBL applied orally at a case management hearing for orders splitting the trial of liability from the trial of quantum. NSX supported that course, but on 7 July 2020 Reeves J dismissed the application for reasons given in John Bridgeman Limited, in the matter of John Bridgeman Limited v National Stock Exchange of Australia Limited [2020] FCA 941. 8 On 28 July 2020, Reeves J made orders by consent, programming the matter to readiness for trial. These required JBL's expert evidence and further lay evidence to be filed and served by 28 August 2020. No evidence was filed and served by that date. 9 On 9 October 2020, JBL applied for leave to file an amended statement of claim. There was conferral about the document, resulting in an order by consent made on 3 November 2020 giving JBL leave to file the amended statement of claim on the basis that JBL must pay NSX's costs thrown away by reason of the amendment to be assessed immediately, as well as the costs of three case management hearings which took place in October 2020, and which were largely, if not entirely, made necessary by what senior counsel for NSX described as JBL's 'vacillation' over the amendments. 10 In the same orders JBL was directed to file and serve its further lay evidence by 12 November 2020 and its expert evidence by 19 November 2020. No lay or expert evidence was filed by those dates. 11 On 25 November 2020, JBL filed two affidavits of lay witnesses, and on 16 December 2020 it filed two affidavits of expert witnesses, Steven Young and Paul Green. JBL does not wish to rely on one of the lay affidavits at trial, but it does intend to rely on the other, which was sworn by Mr McAuliffe. JBL now applies for leave to rely on the affidavits of Mr McAuliffe, Mr Young and Mr Green. Subject to one point, NSX presently takes no issue with the affidavits based on their content or admissibility. But it says that JBL's history of default means that it should be denied leave to rely at trial on the affidavits which were filed out of time. The point to which that previous comment is subject is that NSX complains that the affidavits, including the expert reports, contain material relevant only to the amendments to the statement of claim which were made at the beginning of November, and which have been subsequently abandoned. 12 In Black & Decker (Australasia) Pty Ltd v GMCA Pty Ltd [2007] FCA 1623 at [5], Finkelstein J said, in the context of an application for leave to rely on affidavit material that had been filed late, and, also, did not comply with the direction that the material only be provided by way of reply: … A useful rule to adopt is to allow an extension only if the failure to meet the existing timetable is the result of excusable non-compliance. In deciding whether there is excusable non-compliance the court should take into account, among other factors: (a) the direct and indirect prejudice to the opposing party; (b) the impact of the delay on the proceedings; (c) the reasons for the delay; (d) good faith or lack of good faith on the part of the party seeking to be excused; and (e) the effect of putting off a trial both on other litigants and generally on the court's ability to efficiently manage its cases. 13 This was said before Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, in which all members of the High Court emphasised the importance of efficient and expeditious disposition of cases, from the point of view of use of public resources and justice to all litigants, not just the individual parties. However, nothing in Aon denied the abiding importance of, 'doing justice between the parties according to law': see e.g. Aon at [30] (French CJ), [98] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). The need to balance all these important aims is reflected in the overarching purpose of the civil practice and procedure provisions, found in s 37M(1) of the Federal Court of Australia Act 1976 (Cth), namely to facilitate the just resolution of disputes according to law, and as quickly, inexpensively and efficiently as possible. I do not read Finkelstein J's 'useful rule' as one to be applied regardless of the impact of disallowing the extension on a party's ability to advance the case it wishes to advance, and the consequences of that for the court's ability to resolve the dispute justly and according to law. 14 Here, JBL advances numerous explanations for its ongoing defaults in two affidavits sworn by the solicitor with the conduct of the matter on its behalf, Guy Humble. The explanations are not entirely satisfactory. First, Mr Humble says he has had difficulty in identifying suitable experts for the particular questions of loss that JBL's case raises. That is plausible, but vague. Second, it is said that the need to resolve the question of splitting the trials delayed briefing experts. That may be accepted, but it does not explain JBL's default and delay in filing lay and expert evidence between 31 January 2020 and the time when the split trial was raised at the beginning of May 2020. Third, it is said that one of the experts who was originally briefed identified a conflict of interest and had to be replaced, but this appears to have happened after the orders of 28 July 2020 were made. Why it took until then to identify the conflict is not explained. Fourth, there is reference to difficulties in accessing the documents and information requested by the experts. It is put in those vague terms in the affidavits. Fifth, there were the amendments to the statement of claim which appeared to have occupied much of October 2020, but those are, largely, the very amendments which JBL now wishes to abandon, and the nature of the amendments were known when JBL consented to the latest deadline that it missed, 19 November 2020. Sixth, the report of one of the experts is said not to have attended to all the questions asked of him, requiring a supplementary report. 15 While these explanations are not entirely satisfactory, I do not consider that JBL's ongoing default, as lamentable as it is, is so serious as to justify the court denying it the ability to put on an important aspect of its case. For that would be the effect of denying JBL leave to rely on the relevant affidavits; it would have no basis to advance its case for damages. While NSX points out that there is other relief JBL seeks which may have utility, the inability to seek to prove the claim for millions of dollars in damages would, obviously, leave a significant hole in the case, and may lead to JBL abandoning it altogether. 16 There is no evidence of lack of good faith on JBL's part. In light of all the matters I have described, in my view JBL's defaults are largely attributable to a combination of overoptimism in agreeing to deadlines, a lack of diligence, and the inevitable mishaps and slippages when briefing experts. It is a combination which does JBL and its lawyers no credit, and should not be without consequences. NSX did point in its oral submissions to specific prejudice to it, which has been occasioned by the default and delay. In particular, the fact that one of its main witnesses, Mr Fitzpatrick, has had allegations that he made the suspension decision arbitrarily and capriciously, hanging over his head since at least October 2019 when the proceedings were commenced. Mr Fitzpatrick filed an affidavit containing his evidence on the issues in dispute on 18 May 2020, but senior counsel for NSX submits that the ongoing delay caused by JBL's conduct, which inevitably means delay in the matter coming to trial, will prejudice Mr Fitzpatrick and NSX generally, including, I infer, because of the effect of the passage of time on Mr Fitzpatrick's memory of events. 17 While those matters may be accepted, the likely delay, including the further delay that will be caused if leave to rely on the affidavits is given and NSX needs to reply, is not excessive in the scheme of things. The best way to deal with it is to ensure that the matter proceeds to trial as expeditiously as possible from here on in. All in all, the delay has, of course, also had the effect of delaying the resolution of the proceedings, but it has not had the drastic effects that sometimes justify denying an extension of time, such as the vacation of a trial date. 18 I am, therefore, not persuaded that JBL's default is yet at the stage that warrants what would be, in effect, a refusal on the part of the court to entertain a substantial part of JBL's case. Leave to rely at trial on the affidavits of Mr McAuliffe, Mr Young and Mr Green will be granted. 19 Nevertheless, JBL's ongoing and inadequately explained defaults have caused yet further delay, due to the need to resolve this application, and has also caused further expense to NSX. JBL's conduct of the case has, in all the circumstances, been unreasonable, and it is appropriate to mark the court's disapproval of that and to compensate NSX to the extent possible by ordering JBL to pay NSX's costs of and incidental to the application for leave to rely on the affidavits, and the costs of the case management hearing of 17 December 2020, costs of which were reserved, to be assessed on an indemnity basis forthwith. 20 In relation to the matter I referred to earlier concerning doubt as to the parts of the affidavits on which JBL now relies, in view of the abandonment of most of the amendments made in November 2020, JBL has written to NSX indicating which parts of the expert report it does not rely on, and senior counsel for JBL has indicated orally which parts of Mr McAuliffe's latest affidavit will not be read into evidence. I accept that these notifications were all given late in the day, and that is part of the justification for the award of indemnity costs. I also accept that NSX will need further time to assess the affidavits and to consider whether the parts not relied on can simply be excised from the balance. Nevertheless, it appears to me that any issues which arise after NSX has conducted that consideration can be addressed by appropriate directions of the court, if necessary. 21 In relation to the application to further amend the statement, NSX does not oppose leave to amend but says that it should be on terms that the costs associated with the previous and now abandoned amendments, which have already been ordered to be payable to NSX, should now be assessed on an indemnity basis. NSX says this is appropriate because it can be inferred, from JBL's swift abandonment of the amendments, that there was no proper evidentiary basis to support them. I do not make that inference. Mr Humble's affidavit of 29 January 2021 says that the need for the amendments became apparent during discussions with Bruce Debenham, one of the experts that JBL was then briefing. But when further documentation was provided to Mr Debenham after the amendments, he reached conclusions which meant that the amendments had to be abandoned. 22 This does not, necessarily, mean that the amendments had no proper evidentiary foundation. It is, at least, equally likely that they had a foundation in the initial views of Mr Debenham, but after full consideration by him of all the evidence, including new material made available to him, they proved insupportable. I will make no change to the cost orders in relation to the three amendments which have been made on previous occasions, but since JBL is, in effect, seeking yet another indulgence from the court to permit its abandonment of the previous amendments, it is appropriate to order that it pay NSX's costs of the application to amend the statement of claim to be assessed immediately, albeit not on an indemnity basis, and the costs thrown away by this latest amendment. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson.