Narui Gold Coast Pty Limited v Charles Harrison Pty Limited & Anor

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4369/01 Narui gold Coast pty limited V charles harrison pty limited & ANOR JUDGMENT

1 This is an application brought by the former plaintiff, now the cross-defendant, Narui Gold Coast Pty Ltd (Narui), by way of Notice of Motion filed on 29 October 2004 returnable on 30 November 2004. The duty judge referred the matter to me on the basis that it would take approximately one hour, however for reasons that will become apparent, the hearing proceeded over three days. The Motion seeks firstly that the Amended First Cross-Claim be declared to have been dismissed for non-compliance with the Orders of Acting Master Berecry made on 22 July 2004. Alternatively, that the Amended First Cross-Claim be dismissed as an abuse of process.

2 The only proceedings now extant are two Cross-Claims. The first is brought by the former defendant, Charles Harrison Pty Ltd, as first cross-claimant, and Charles Harrison & Co Pty Ltd as second cross-claimant (the Harrison companies) against Narui. The second is brought by Narui against Barr Project Management Pty Ltd, as first cross-defendant, and Timothy James Barr, as second cross-defendant.

3 The litigation arose out of disputation about contracts for two parcels of land in the far north of this state near Kingscliff. Contracts were exchanged for what has been referred to as "the primary land", a large parcel of land, and a smaller parcel of land known as "lot 7" on 7 December 2000 between the plaintiff, now the cross-defendant, Narui as vendor, and the first cross-claimant, Charles Harrison Pty Ltd, as purchaser.

4 On 5 September 2001 the former plaintiff commenced the main proceedings against the Harrison companies and their principal, John Charles Harrison. Those proceedings sought, inter alia, declarations that the contracts to which I have referred were void, or alternatively sought declarations for rectification and orders for specific performance.

5 On 22 October 2001 the Harrison companies filed the Cross-Claim alleging that the plaintiff, now the cross-defendant to the First Cross-Claim, by its agent Timothy Barr and/or Barr Project Management Pty Ltd, were in various ways guilty of misleading or deceptive conduct under the Trade Practices Act 1974.

6 On 24 October 2003 an Amended Cross-Claim was filed. It is alleged that Nauri made representations that it had development approval for the subdivision of the primary land granted to it by Tweed Shire Council on 31 May 2000. It is also alleged that a representation was made that if one of the Harrison companies did "a good job" and developed the primary land well, it would have first right of refusal on the development of lot 7. There was also an alleged representation that Narui would obtain for one of the Harrison companies a development application in accordance with the purported development approval that was allegedly already obtained from the Tweed Shire Council. 7 The history of this litigation is extremely unsatisfactory. It is apparent that by late 2002 the parties understood that the only issue between them was a question of damages. Although it was apparent that the plaintiff was no longer propounding or seeking to propound its claim, formal discontinuance of that claim did not occur until April 2004. There have been various skirmishes, including applications for removal of caveats and appellate processes in relation to that application that have, on one view of the evidence, held up the final hearing of the case.

8 On 21 November 2003 Narui was successful in obtaining a security for costs order against the Harrison companies in the amount of $220,000 to be paid by 19 December 2003. On 18 December 2003 the Harrison companies made application to have that order for security reviewed. It is said in submissions that the Amended Cross-Claim was stayed by reason of that security order until May this year when Justice Windeyer reviewed the order and changed it to payment of security in two tranches, the first being $130,000 payable within a short period after the order was made and the second being $150,000 payable within a short period after the trial date is fixed. The first amount of security has been paid. 9 Soon after the security was reviewed and Justice Windeyer made his orders, Narui made application for orders that the Harrison companies serve any further affidavit material on which they intended to rely at the trial of the Amended Cross-Claim by 29 July 2004 and that if they failed to comply with that order the Amended Cross-Claim be dismissed. That application was brought by way of Notice of Motion that was filed on 12 July 2004 and appears to have been heard by Acting Master Berecry in July 2004. The rule under which the applicant moved for the dismissal order was Pt 33 r 6(2) which provides: Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings or does not prosecute the proceedings with due despatch the Court may, on application by any party or of its own motion, stay or dismiss the proceedings.

10 On 22 July 2004 Acting Master Berecry delivered an extemporé judgment in which he recounted the unsatisfactory history of the matter. It is obvious that the evidence before the Master included evidence from Mr Harrison. There was some medical evidence in relation to a condition Mr Harrison claimed to have been suffering, and also some evidence in respect of his mother's illness by way of explanation for non compliance with the previous order to file evidence prior to the date of the application before the Acting Master. The Acting Master found some of the evidence given by Mr Harrison a little curious but ultimately preferred the view that it was not conduct that could be described as contumelious and, as he said, he gave the benefit of the doubt to Mr Harrison. The Acting Master also said: I do know that there have been many timetables that have not been complied with. I do know that at least the legal representatives of both parties have been aware of what the parameters of this case are since late October 2002. It seems to me that the current state of affairs cannot be allowed to continue.

11 The relevant orders made by the Acting Master on 22 July 2004 were in the following terms: 1. The First and Second Cross Claimant file and serve all further affidavit evidence (including expert evidence) on which they will rely in the Hearing of these proceedings by 4:00pm on 19 August 2004. 2. The Cross Claimant's solicitor file and serve an affidavit by 4:00pm on 19 August 2004 verifying whether or not there has been filed and served all of the evidence referred to in order 1 above. 3. The proceedings on the Amended Cross Claim be dismissed unless by 4.00pm on 19 August 2004, there be filed and served on the Cross Defendant an affidavit of the Cross Claimant's solicitors deposing that all further affidavit evidence (including expert evidence) on which the Cross Claimant's will rely at the Hearing of the proceedings has been filed and served. 12 Firstly, there was an order in relation to the filing of the Harrison companies' evidence. That was required by 4 o'clock on 19 August 2004. Order 2 required the Harrison companies' solicitor to file and serve an affidavit "verifying whether or not" that evidence had been filed. That was also required by 4 o'clock on 19 August 2004. Curiously, on one view of it, Order 3, the guillotine order, refers to an affidavit deposing that all further affidavit evidence had been filed and served, rather than an affidavit verifying whether or not the evidence had been filed and served as provided for in Order 2. 13 On 19 August 2004 affidavit evidence from various witnesses was filed and an affidavit of the solicitor, Bruce Vernon Dennis, was filed. It is that affidavit that is the central focus of this application. It was in the following terms: 1. I am the solicitor on the record for the cross-claimants herein. 2. I make this affidavit pursuant to Orders made by Acting Master Berecry on 22 July 2004. 3. I am instructed by Charles Harrison, the sole director of each of the cross-claimants, and verily believe that the cross-claimants have filed all the evidence in chief they intend to rely on at the hearing of this matter. 14 On 30 August 2004 the Registrar made orders, probably by consent, including an order that by 6 September 2004 the solicitor for the cross claimants to the First Cross Claim provide a list of each affidavit on which there was an intention to rely at the hearing. Consistently with previous dilatoriness that was not done until 13 September 2004 when Dennis & Co, wrote to the solicitors for Narui, Hickey Lawyers, advising: We are instructed to advise you that we shall be relying on all affidavits filed herein on behalf of our clients. In addition it is proposed to Subpoena financiers who were and are prepared to do 100 % financing to give verbal evidence. 15 On 11 October 2004 Hickey Lawyers responded expressing their concern in the following terms: Thank you for your letter of 13 September 2004. We note with concern the suggestion that the Cross-Claimants propose to adduce evidence additional to that which has been filed and served in the proceedings prior to 19 August 2004. On that date, Mr Bruce Dennis deposed in paragraph 3 to having received instructions and to his belief that the Cross-Claimants had " filed all the evidence in chief they intend to rely on at the hearing of this matter". Your letter under reply now discloses that the Cross-Claimants had not in fact by that date filed all the evidence in chief which they intend to rely on at the hearing. Would you please as a matter of urgency inform us in writing of the following matters: 1. The identity of each of the "financiers" whom it is proposed to subpoena to give "verbal" evidence. 2. Provide to us a Statement setting out the effect of the evidence the Cross-Claimants propose to adduce from each such witness. 3. Provide to us an explanation as to why the evidence in each case cannot, indeed has not, been provided in affidavit form. Our client is considering making a further application to the Court, but is prepared to await your response within seven days before doing so.

16 On 29 October 2004 Dennis & Co responded by letter in the following terms:

We refer to your letter of 11 October 2004. Our clients have filed all the affidavits they intend to rely on at the hearing of this matter, however, as you have been aware for sometime prior to your letter, our clients will seek to adduce evidence oral from financiers. In answer to your request for information about the further proposed witnesses our client replies as follows (using your numbering): 1. Mr Reg Rundle who lives in Japan and Mr Arthur Lane of Macquarie Bank. 2. So far as Mr Reg Rundle is concerned it is proposed that evidence will be adduced about: (a) his financial position; (b) his interest in the development (c) his agreement with our clients to advance 100% project finance in return for 30% of the shares in Charles Harrison Pty Limited So far as Mr Lane is concerned it is proposed to adduce evidence in accordance with his letter to Mr Dennis of 8th September 2003 and the likelihood of Macquarie Bank advancing moneys to our clients to finance the development. 3. The reason affidavits have not been filed and served is that neither Mr Rundle nor Mr Arthur Lane would provide one. Our clients are continuing discussions with Mr Rundle about his providing an affidavit, however, we consider it unlikely that he will provide such an affidavit. We await your client's evidence. 17 Mr Lane's letter of 8 September 2003 referred to in that letter was in the following terms. Following introduction to us by your Mr Noel Dennis in 2001 Mr Charles Harrison approached us to provide 100% financing of the cost of purchasing at Kings Forest and also the cost of subsequently developing same. The purchase contracts related to two parcels of land comprising 100 hectares and 7.6 hectares respectively owned by Narvi Gold Coast Pty Limited. The purchase prices were $10.5m and $450,000 respectively. Based on the information received we would have been pleased to receive an application from Mr Harrison for funding of this acquisition and assisting him with creating an appropriate funding solution on both the land acquisition and subsequent development of the properties. We were not able to proceed further with the proposal as it was feared that the purported approval of the Development Application to subdivide the property into more than 600 residential allotments had not been obtained. 18 On 28 October 2004 this Motion and the affidavit in support of Damian Eden Hodgson sworn 28 October 2004 was filed. That affidavit set out the background to the proceedings, the tortured history and a reference to the affidavit of Mr Dennis of 19 August 2004 and the receipt of the letter of 13 September 2004. 19 Dennis & Co.'s office seems to have a set up which is a little different to most solicitors' offices. Mr Bruce Dennis' father, Mr Noel Dennis, is a legal clerk. He appears to have had the carriage of this matter in the office. He apparently went to China at around late October or early November where he contracted influenza. When he returned he was ill and it seems he did not return to the office until about last week. It was at that stage that the Motion and Mr Hodgson's affidavit was first reviewed. Mr Bruce Dennis became aware of the Motion only last week. Mr Noel Dennis advised Mr Bruce Dennis that he thought the matter was returnable on 30 November 2004 and that there would probably be a timetable put in place for evidence to be filed. Notwithstanding that evidence Mr Noel Dennis swore an affidavit on 29 November 2004 in which he referred to a conversation he allegedly had with Mr Arthur Lane on or about 25 August 2004. 20 Robert John Tassell, the solicitor for Nauri, also swore an affidavit on 29 November 2004 in which he gave evidence of some discussions he had with Mr Lane. 21 Mr Einfeld QC leading Mr Dubler SC opened the case for Nauri on Tuesday, 30 November 2004 submitting that the affidavit sworn by Mr Bruce Dennis on 19 August 2004 was not compliant with the order made by the Acting Master and that the evidence would demonstrate that when Mr Dennis swore that affidavit he knew that the evidence was not all filed and that other witnesses needed to be called in chief for the Harrison companies. Having opened the case, Mr Einfeld QC then sought to cross-examine Mr Noel Dennis. 22 Mr Noel Dennis had claimed in his affidavit that he had spoken to Mr Lane on or about 25 August 2004 in a telephone conversation in which he alleged he asked Mr Lane if he would provide an affidavit confirming the contents of the letter he wrote in 2003 the terms of which are set out above. That affidavit claimed that Mr Lane said that he would have to check with his legal department and that he subsequently telephoned Mr Noel Denis and advised that that he could not provide an affidavit.

23 There was another person, Mr RS Rundle, whose evidence also seems to have been thought appropriate to give in chief at some stage. Mr Rundle lives in Japan and Mr Harrison informed Mr Noel Dennis that Mr Rundle came to Australia occasionally. By the end of Mr Noel Dennis's cross-examination it was clear that at the time of the alleged conversation with Mr Lane, Mr Lane was sailing his yacht in the Whitsundays. Albeit that he had his mobile phone with him, it is clear that a conversation could not have occurred on 25 August 2004 and ultimately Mr Noel Dennis accepted that in that two week period from about 19 August or so to the end of August, Mr Lane was away and that he thought he had his dates wrong. 24 His evidence was unsatisfactory because he said initially that he was quite certain the conversation occurred after 19 August 2004. Having regard to that mistaken belief, to use a neutral term, that it had occurred on or about 25 August 2004 his evidence is in my view unreliable. 25 Mr Einfeld QC indicated that he intended to make submissions that Mr Noel Dennis had given evidence that was not true and that when Mr Bruce Dennis swore his 19 August 2004 affidavit he knew it to be misleading. He used the term "dissembling". In the circumstances of those serious allegations Mr Einfeld QC decided that he should call Mr Lane to give evidence and, after waiting some hours, it transpired that it was not possible for him to come to Court on 30 November 2004. Indeed I was informed that Mr Lane had advised that he could only come to Court by way of subpoena. I made an order for him to attend at 10 o'clock on Wednesday, 1 December 2004. 26 A further development occurred overnight. The principal of the Harrison companies, John Charles Harrison, decided to give evidence. He swore an affidavit on 30 November 2004. He is the sole director of the cross-claimants and he has the conduct of the litigation. His evidence was in part extraordinary. He gave evidence that on 19 August 2004 he instructed Mr Bruce Dennis to file an affidavit setting out that the evidence-in-chief was complete, that he saw Mr Dennis prepare that affidavit; and that he read Mr Dennis' affidavit before it was signed. He claimed that he had had a conversation with Mr Lane in 2001 in which he informed Mr Lane that he was litigating with the Japanese vendors and that they did not seem to be taking him seriously. He suggested that he needed to arrange finance to purchase the land and, if he had that finance, the Japanese may know that he was serious. He claimed Mr Lane said that Macquarie Bank would be interested in having a look at the contract and Mr Lane suggested that he contact him through Noel Dennis. 27 Subsequently, Mr Noel Dennis took Mr Harrison to meet with Mr Lane at the Macquarie Bank. Mr Lane indicated an interest in looking at the matter, perhaps funding it, advising that the Bank had funded a project up that way, about half a kilometre east of the primary land. He also became rather personal, advising Mr Harrison that he had a holiday house at Pottsville and that he liked the area. Mr Harrison claimed that he told Mr Lane that he was in dispute with the Japanese and that Mr Lane said that he knew that and perhaps the Bank could assist him in some negotiations. 28 Mr Harrison said that he recalled being in Mr Noel Dennis' office in about September 2003 when he rang Mr Lane and asked him if he would assist with evidence concerning the litigation. He recalls Mr Dennis saying, "Well, then, would you do a letter?" It is said that the letter to which I have referred from Mr Lane was sent as a result of that conversation. Mr Harrison also claimed he had a further conversation with Mr Lane in August or September this year about the Japanese and a cash offer and that Mr Lane suggested he go and see him.

29 The extraordinary thing about Mr Harrison's evidence is that he has taken a very firm approach to this litigation that is apparently inconsistent with his solicitor's advice. He said in his cross-examination that he was of the view that it was not a requirement for him to file any evidence of a readiness, willingness or ability to complete the contract. He conceded that he was at odds with his solicitors about that matter and they held a different view. He expounded on that view by informing the court that he had read the relevant part of the text Lindgren, Carter and Harland Contract Law of Australia with reference to Foran v Wright and that he was rather confident that his research and view was the correct one and his solicitor's approach was not. He agreed that if his solicitor was correct he would be in rather serious difficulty. He maintained throughout his cross-examination that the evidence of the financiers relevant to the readiness, willingness and ability to complete "had not become an issue". He maintained that the evidence would not be required until evidence-in-reply because he was seeking damages for loss of bargain and expectation damages on the basis of an anticipatory breach, and that it would only be an issue if Narui raised it in the pleadings or in evidence.

30 Mr Lane then gave evidence. I cannot envisage why Mr Lane would tell me, as he did, that he did not know about the litigation and, that he had never been asked to provide affidavit evidence, if that were not the case. He has a good source of contacts through Mr Noel Dennis and there is nothing about Mr Lane that suggests that he was not doing his best to tell me the truth. I am satisfied he did not have a conversation on 25 August 2004 with Mr Noel Dennis. He said that no-one had asked him to give evidence in these proceedings. It did turn out that the day before Mr Lane gave evidence Mr Bruce Dennis had asked him whether he would be willing to give an affidavit in the proceedings and that he had refused. 31 After that evidence Mr Einfeld QC then commenced his final submissions. He submitted that Mr Bruce Dennis well knew the instructions given to him on 19 August 2004 were not correct and that the respondent's failure to call Mr Bruce Dennis to give evidence on the hearing of the Motion was fatal to the resistance of this application. 32 Mr Einfeld QC submitted that the affidavit sworn by Mr Bruce Dennis on 19 August 2004 and filed on that day was a device to stave off dismissal; that there was no care taken as to whether it was true or not; that Mr Bruce Dennis should have known, or it was highly probable that he knew, that the affidavit was incorrect and misleading; and that the absence of Mr Bruce Dennis from the witness box would give some comfort to the Court in reaching those conclusions. 33 It was only during final submissions for the Harrison companies that Mr Justice sought to reopen the Harrison companies' cases to call Mr Bruce Dennis. I adjourned the matter to 2 December 2004, and a formal application to read the affidavit of Mr Dennis sworn on 2 December 2004 was made. That was opposed and is the subject of a separate judgment allowing re-opening and allowing the reading of the affidavit. Mr Dennis' affidavit contained some background material and the detail of the arrangements in the office. It also included the communication between Mr Bruce Dennis and counsel, Mr Justice, on 19 August 2004. It is clear that Mr Justice drafted Mr Bruce Dennis' affidavit of 19 August 2004. 34 Mr Dennis' affidavit evidence was that at the time that he signed the affidavit of 19 August 2004 he believed that all evidence-in-chief that the cross-claimants could bring was complete and that prior to signing his affidavit he asked Mr Harrison whether he had any other witnesses to swear affidavits and that he said he did not. The affidavit of 2 December 2004 included the following: I felt comfortable to sign the Affidavit knowing that Mr Harrison's Affidavit appeared to found a prima facie case on liability and Mr Bridger's affidavit founded a prima facie case in relation to damages. 35 The affidavit also claimed that Mr Dennis had obtained his "client's specific instructions" and that at some time prior to 19 August 2004 he discussed with Mr Harrison the question of what to do with the fact that Mr Lane would not swear an affidavit. He claimed that Mr Harrison's instructions were that he did not believe that Mr Lane's evidence was properly evidence-in-chief; that it might become relevant in reply; but that, in any event, the case would have to be prepared upon the contingency that Mr Lane did not assist. 36 Mr Bruce Dennis was cross-examined. It is clear from that cross-examination that at a time prior to 18 October 2004, Mr Harrison expressed his view to Mr Dennis about the need, or lack of it, to call evidence-in-chief from the financiers. Mr Bruce Dennis indicated that prior to 18 October 2004, he knew his client's "attitude" but that he required from his client some written instructions. Those written instructions were delivered on 18 October 2004 prior to the filing of this Motion. That letter included the statement that after the affidavits were filed on 19 August 2004 and when it was necessary to advise what affidavits were intended to be relied upon, Mr Noel Dennis sought Mr Harrison's instructions. Mr Harrison claimed in his letter of 18 October 2004 that he instructed Mr Noel Dennis that: We should reserve the right to rely upon all affidavits filed and in addition to reserve the right to call possible witnesses ('financiers') who had not sworn affidavits for us. 37 Mr Harrison's written instructions continued: Your affidavit sworn 19th August 2004 accurately reflects my instructions to you on that date. I instructed you that we had filed all the evidence-in-chief that we intended to rely upon. The existing affidavits prove the terms of the contracts the repudiation by Narui, and our acceptance of the repudiation which completed our cause of action for anticipatory breach.

38 Mr Harrison then referred to the basis of his understanding and the letter continued: 4. The affidavits filed on our behalf indicate that putative "financiers" were: John Wilson, Ken Owens, Ian Hipwood, Reg Rundle and Arthur Lane (of Macquarie Bank). None of these was prepared to swear an affidavit for my companies but their evidence would corroborate existing affidavit evidence if they were to be called. 5. Reg Rundle agreed to provide funds to acquire and complete the development of Stage 1 after John Wilson, Ken Owens and Ian Hipwood were scared off by the litigation. I believe that Reg went to Japan with Australian Army intelligence at the end of World War Two and stayed on to amass a considerable fortune as one of Japan's largest importers. 6. Arthur Lane (an associate director of Macquarie Bank) said that the bank would put up every cent for stage 1, that the bank had provided venture capital for the nearby Casuarina Beach and Salt developments, that he owned a holiday house on the beach at nearby Pottsville, and that the bank considered that the area was the number one property hot spot in Australia. 7. None of this is in my affidavits because it is hearsay. I suppose that these witnesses would probably say these things if called. I don't know what else they would say or what else is relevant. 8. I trust that this clarifies things.

39 That letter clearly states that none of the people mentioned, including Mr Lane and Mr Rundle, was prepared to swear an affidavit, but that their evidence, as he put it, would "corroborate" existing affidavit evidence if they were to be called. In cross-examination, when asked what had changed since 19 August 2004, Mr Bruce Dennis said that his client at this stage was "equivocal".

40 Mr Einfeld QC submitted that I should apply to Mr Bruce Dennis' evidence the principle that was expressed by Handley JA in Commercial Union Assurance Company of Australia Pty Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418, recently referred to by Ipp JA in Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127 at 139. That principle is that inferences should not be drawn in favour of a party that calls a witness who could have given direct evidence when that party refrained from asking the crucial questions. In this instance it is submitted that Mr Bruce Dennis did not deal directly with the position of his state of mind on 19 August 2004 and did not directly deal with what had changed thereafter, it being suggested that he well knew on 19 August 2004 that what he was doing in that affidavit was dissembling. 41 Mr Justice referred me to The Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203 in which French J at par [106], referred to the following factors as those that should be considered when deciding whether a case should stand dismissed: 1. The seriousness of the non-compliance. 2. The reason for the non-compliance. 3. The history of delay or breach of orders in the past on the part of the applicant. 4. Any prejudice to the applicant arising from the dismissal of the proceedings. 5. Any prejudice to the respondents from permitting the proceedings to continue. 6. The authority of the Court.

42 French J continued at [106]: The question whether the particular order of 1 May 2001, has been obeyed also requires an evaluative judgment. That judgment must be informed by the proposition that the Court will not lightly deny a party a trial for failure to meet a procedural requirement. There must be a realistic appreciation that in complying with this particular order, it could not be expected that the filing of evidence by the applicant would, as it were, capture its case in amber. There may be witnesses to be called who are not prepared to swear affidavits and who would be required to produce documents or give testimony under subpoena. There must also be retained a degree of flexibility which will allow the matters in dispute in the case to be brought into sharper focus, the real issues identified and false issues discarded. Litigation is a dynamic process and the rules and directions under which it is managed must be able to accommodate that reality. On the other hand, where there is a history of failure to obey the Court's orders there may be a more rigorous approach to the minimum requirements of a self-executing order.

43 On appeal (Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2003] FCAFC 51) the Full Federal Court said at [29]:

With respect to the prejudice likely to be suffered which was referred to by his Honour, we consider that while this must be given some weight, in substance, it is the type of general prejudice with which litigants are frequently faced and is not sufficiently out of the ordinary to outweigh the detriment to the applicant if it is foreclosed from advancing its case against Pongrass. 44 The question is whether the affidavit sworn by Mr Bruce Dennis on 19 August 2004 complied with the Acting Master's order of 22 July 2004. The affidavit is worded in a way that was probably not anticipated. Mr Dennis chose to adopt the words settled by counsel "I am instructed by Charles Harrison and verily believe that the cross-claimants have filed all the evidence-in-chief they intend to rely on at the hearing of this matter". It might have been a vain hope of Mr Dennis that his client would come to his senses and call evidence-in-chief from those financiers, but I am satisfied that Mr Harrison has taken a very deep interest in and firm approach to this litigation. He has even gone to the extent of having an affidavit prepared outside the Dennis & Co offices, that is the affidavit of Mr Tune sworn on 19 August 2004. The evidence generally and specifically the letter of 18 October 2004 lead me to the conclusion that there may be some difficulty in the relationship between solicitor and client. Mr Harrison apparently expresses firm views about the law and expresses firm views about the way in which things are to be done in line with his view of the law. 45 Is it non compliance for Mr Dennis to have filed an affidavit stating that on his instructions all the evidence-in-chief was filed, even if he held the view that if he had his way he would have wanted the financiers to give evidence? This is where taking instructions and letting clients have their way, perhaps even to their detriment, is in stark focus. 46 It is submitted by Mr Einfeld QC that what Mr Dennis did could not be described as verifying anything. It was submitted that he, as an officer of the Court, was required to effectively certify that all evidence had been filed that was going to be relied upon in the evidence-in-chief. It was submitted that I should work backwards from the letter of 29 October 2004 to find that Mr Dennis' knowledge as at 19 August 2004 was as contained in the letter of 29 October 2004 and that he knew his affidavit was inaccurate. 47 I am of the view that as at 13 September 2004 Mr Harrison's attitude was known to Mr Bruce Dennis albeit it was not in writing. I am satisfied that the "attitude" expressed in the 18 October 2004 letter was the "attitude" that had been expressed to Mr Bruce Dennis after 19 August 2004 and prior to 13 September 2004. That is the basis upon which Mr Dennis gave evidence of the "change" since 19 August 2004, that his client was "equivocal", meaning, I take it, that prior to that date he had not been equivocal. He was now equivocal in that he thought that the financier's evidence might, as he put it "corroborate" his own evidence in his case in chief, thus a change. 48 I am not satisfied that Mr Bruce Dennis did not believe what he swore to on 19 August 2004 or that he was, as suggested, dissembling. I am satisfied that he understood the difficult position he was in and that when he filed that affidavit it was filed consistently with his client's instructions and then present intentions. Mr Bruce Dennis went further than deposing that the affidavit evidence was on, indeed he said that all the evidence-in-chief had been filed. Even if the solicitor felt that there should be further evidence, the clear instructions were as I have stated. I am satisfied that the affidavit complied with Order 3 made by the Acting Master. 49 The consequence of that finding makes it unnecessary to decide the real difference between the evidence of Mr Noel Dennis and Mr Lane, albeit that I have expressed a view about Mr Lane's evidence. It is clear that by 29 October 2004 when Dennis & Co expressed a view to Hickey Lawyers, that Mr Lane and Mr Rundle would not provide affidavits, that they had received written instructions from Mr Harrison in his letter of 18 October 2004. But having regard to the view that I have formed in relation to Mr Bruce Dennis' evidence, notwithstanding the delay in taking the witness box and notwithstanding the late forensic decisions that were made during this hearing, I am satisfied that I should dismiss the applicant's motion seeking a declaration that the proceedings stand dismissed and an order that they are dismissed.

50 I make the following orders: 1. I dismiss the applicant's motion for dismissal.

2. I reserve the question of costs. 3. I order that the cross-claimants file and serve an outline of evidence they will attempt to call from financiers by 10 December 2004. 4. I order the cross-defendant file and serve all evidence by 17 December 2004 except evidence in response to the outline served on 10 December 2004. 5. I list the matter in the first callover for 2005 with priority. 6. The cross-defendants to the second cross-claim are to file their evidence in response to the cross-claimant's evidence by 25 February 2005. 7. The cross-claimants to the first cross-claim are to file any evidence-in-reply by 25 February 2005. 8. The cross-claimant to the second cross-claim is to provide discovery by 23 December 2004. 51 I will list this matter before me on 10 February 2005 at 9.30 am for any argument as to costs. I grant liberty to restore the matter to my list on one day's notice.

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