The respondents' contended variation
59As I have indicated, there was no dispute between the parties that the Deed of Settlement had been varied. The question was what was the agreed variation. The appellants contended that the variation, or at least the offer, was contained within the terms of the letter of 25 November. They resisted any suggestion that the variation was constituted by the conversations of 24 and 25 November 2011 between Mr Mattiussi and Ms Bernauer, as contended by the respondents in the notice of contention. The appellants submitted that these conversations did not constitute a variation of the Share Sale Agreement and in any event, the terms of those conversations were in different terms from the contract found by the trial judge. The trial judge found that the contract had been varied only to defer the time at which the $170,000 was to be paid to Willis & Bowring.
60This leads to a consideration of the respondents' notice of contention, which is set out at [11] above.
61The appellants argued that leave should not be granted to the respondents to rely upon the variation pleaded in the notice of contention, first, because it pleaded a contract that was inconsistent both with the reply filed in response to the defence and with the evidence and secondly, because there was no explanation for the failure to file the notice of contention within the time specified in the rules: see the Uniform Civil Procedure Rules 2005 (UCPR), r 51.40. The appellants submitted that they had not come to deal with a case based on a contract in different terms to that found by the trial judge. They submitted that at best, success by the respondents on the variation for which they contended might require a retrial. The appellants also submitted that the variation in the terms contended for by the respondents should be rejected. It is necessary to deal with the various arguments advanced because if leave is not granted to file the notice of contention, the appeal obviously has a stronger chance of succeeding.
62There were some differences between the respondents' reply and the variation now pleaded in the notice of contention. The reply pleaded that the deferred payment was to be made to Brightstars Holdings, whereas the variation pleaded in the notice of contention was that the payment was to be made to Mr Wilson and/or Brightstars Holdings. The appellants submitted that this also differed from Mr Mattiussi's evidence that payment was to be made to Mr Wilson. It was submitted that this was an important distinction because Brightstars Holdings was partly owned by Ms El Kafrouni.
63The reply also pleaded that payment was required "within a reasonable time", which the appellants contended was pleaded as an express term. The appellants pointed to the absence of such a term, either express or implied, in the variation pleaded in the notice of contention. The appellants also referred to the absence of any reference in the reply to conversations in which the variation was agreed to, and to the absence of any pleading of an offer and acceptance.
64The respondents submitted that his Honour's reasons were to be understood in the context of the orders that he made. His Honour's failure in his judgment to refer to the change in payee was an oversight, given that he had made an order that payment of the monies was to be to the respondents. The respondents also submitted that his Honour's reasons should be read in light of the manner in which the matter was conducted at trial, where the focus was on the question whether the obligation to pay the sum of $170,000 had been discharged, or whether that obligation had merely been deferred. They submitted that there was very little reference to the question of the party to whom the payment was to be made and that presumably this was a matter of little significance to the appellants, as their concern was with the liability to pay.
65Although the reply did not allege a specific offer or acceptance, nor expressly refer to the conversations between the solicitors on 24 and 25 November 2011, it nonetheless contained a pleading of a variation whereby payment of the $170,000 was to be deferred until after settlement. During the course of the proceedings at first instance, Mr Mattiussi was cross-examined about the content of his letter of 25 November and, in particular, about the absence of any reference in it to payment being deferred. Further, as noted above, a case based on the conversations was articulated in the respondents' closing written submissions filed on 26 September 2013. No objection was taken by the appellants in their closing oral submissions to the court on 27 September 2013 that that case could not be argued.
66It is apparent, therefore, that the respondents had raised a case, based on the conversations of 24 and 25 November 2011 between the solicitors, that the variation of the Deed of Settlement involved the deferral of the obligation to pay the sum of $170,000. Although the respondents' written submissions did not raise the matter in the crisp way articulated in the notice of contention, that case had been put in the court below. As the appeal was contested, it must have been apparent to the appellants that that was because the respondents relied upon a variation deferring the payment of the sum of $170,000. In my opinion, there is no unfairness in granting leave to the respondents to file the notice of contention.
67The appellants submitted that if the respondents were granted leave to rely on the notice of contention, the Court should reject their argument that the variation was in the terms for which they contend. The appellants' submissions focussed on two matters: first, whether Mr Mattiussi's evidence of the conversations of 24 and 25 November should be accepted and secondly, whether the respondents had infringed the rule in Browne v Dunn by not cross-examining Ms Bernauer as to whether the conversations had occurred and if so, in what terms.
68In respect of the first challenge, the appellants submitted that merely because Mr Mattiussi was not cross-examined on the conversations did not mean that the court was obliged to accept his evidence: see Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; 261 ALR 382 at [105]. They submitted that there were significant problems in this Court accepting his evidence which, they contended, was inconsistent with other evidence: Bulstrode v Trimble [1970] VR 840 at 849.
69One of the matters that was in issue in the proceedings was the accuracy of the letter of 25 November, which made no reference to payment of the sum of $170,0000 being deferred. In cross-examination, Mr Mattiussi described his letter as being "clumsy" and to the extent that there was no reference to the deferral of payment of the sum of $170,000, he said it was inaccurate. He said, however, that the letter nonetheless stated what he always understood the position to be, namely, that his clients were responsible to him for his fees. To the extent that there was a question as to how the sum of $170,000 was to be paid, he said that was a matter between his clients and the appellants. In my opinion, given this explanation, the letter is not inconsistent with the variation for which the respondents contend and it was open to the court to accept his evidence as to the conversations he said were had on 24 and 25 November.
70The second challenge made by the appellants to the case advanced on the notice of contention related to the 'failure' to cross-examine Ms Bernauer. The appellants contended that, in accordance with the principle in Browne v Dunn, there was an obligation on the respondents to cross-examine Ms Bernauer on the conversations to which Mr Mattiussi deposed.
71The rule in Browne v Dunn is a rule of fairness. It was explained by Hunt J in Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 as a requirement to cross-examine a witness if it was intended to contend that the witness' evidence should not be accepted. In the present case, although Ms Bernauer's affidavit evidence was read in the appellant's case, there was no reference in her affidavits to the 24 and 25 November conversations. The appellants sought to explain away this omission on the basis that Ms Bernauer had ceased to act for them because of a perceived conflict of interest and that Mr Mattiussi's evidence post-dated her affidavits and her ceasing to act for them. They contended in those circumstances that there was an obligation on the respondents to call Ms Bernauer or to require her to be called for cross examination and to ask her about the conversations. The corollary of this submission was that they had no forensic obligation to adduce evidence from her on this matter.
72I do not agree. The appellants were aware of the conversations to which Mr Mattiussi deposed and of the respondents' reliance on those conversations as the basis of the variation for which they contended, namely, for the deferral of payment. If the appellants wished to contest the conversations, they could and should have called Ms Bernauer to give evidence. They did not do so although Ms Bernauer had attended court in response to a subpoena issued at the instance of the appellants. The respondents were under no obligation to require her to be called so as to cross-examine her on evidence that the appellants had not seen fit to obtain from her, either by way of further affidavit evidence or orally at the trial. They also had the forensic advantage of the absence of any cross-examination of Mr Mattiussi on the conversation. I do not consider that there was any aspect of fairness that required the respondents to question Ms Bernauer as to the conversations. Nor were they required to call her for cross-examination, notwithstanding that she was present at court and available to be cross-examined. They were entitled to rely upon the absence of any challenge to that evidence by the appellants.
73The appellants also alleged a number of inadequacies in the evidence which, they contended, impacted upon the accuracy and cogency of Mr Mattiussi's evidence. The alleged inadequacies related to the absence in evidence of any file note of the conversations on 24 and 25 November, such that an inference should be drawn that no file note existed and therefore that no such instructions had been given. The appellants also pointed to the absence of any other corroboration of the key words of the variation alleged by the respondents.
74Although there was no file note produced in evidence, it should be noted that Willis & Bowring's bill of costs listed telephone calls with Ms Bernauer on 24 and 25 November and Ms Bernauer's costing sheet lists a telephone call on 25 November. That evidence constitutes corroboration. But in any event, evidence does not require corroboration to be accepted and his Honour found Mr Mattiussi to be a credible witness who gave clear and responsive evidence. Although the appellants referred to Fox v Percy [2003] HCA 22; 214 CLR 118, they did not point to incontrovertible evidence to the contrary of the evidence given by Mr Mattiussi. Nor did the appellants refer to any other matter that would involve the considerations referred to in Fox v Percy. Given the uncontested evidence of the conversations on 24 and 25 November, the letter of 25 November 2011 was not of that character.
75It is of particular importance in this context that Mr Mattiussi was not cross-examined on the conversations with Ms Bernauer on 24 and 25 November. He was not challenged to the effect that he had no such instructions, nor was there any evidence to suggest that he had no such instructions, as the appellants have contended in their further written submissions. Nor was Mr Wilson challenged on the basis that he had not given any such instructions. The appellants' criticism that the respondents' instructions to Mr Mattiussi were not in evidence is of no substance.
76The appellants also submitted that it was relevant that Mr Mattiussi gave no reason in his evidence as to why the identity of the payee had changed from a payment to him to a payment to Mr Wilson. With respect, this is apparent from the terms of the conversation on 24 November, the letter of 25 November, as well as Mr Mattiussi's evidence referred to above at [68]. Mr Mattiussi would look to his client to pay him, and those monies would be recouped by Mr Wilson from the respondents.
77In my opinion, the conversations between Mr Mattiussi and Ms Bernauer on 24 and 25 November constituted an offer and acceptance on behalf of their clients that payment of the sum of $170,000 was to be deferred.