National Australia Bank v Caporale

Judgment 1The history of these proceedings is partly dealt with in Zippoz Pty Ltd v National Australia Bank Ltd [2011] NSWCA 164, given in June 2011. The loan agreement in question is in respect of an amount exceeding $4 million. It was entered in 2004. Payments ceased to be made in March 2007 and in 2010 these proceedings were commenced, with the plaintiff seeking possession of the properties which secured the loan. Various orders were made as to the provision of particulars, which were not complied with by the defendants. The defendants' solicitors ceased to act for them and in March 2011 Harrison AssJ struck out the defences and entered judgment in favour of the plaintiff. Writs of possession were issued in May 2011. The defendants then sought leave to appeal, which was refused by the Court of Appeal. 2The defendants were at that point again legally represented. An application made after the Court of Appeal's judgment was given, to have the default judgment set aside, was granted. Directions were given for the filing of a defence and the preparation of the matter for hearing. There was again repeated default on the defendants' part, with respect to the Court's directions. The result finally was that when the matter came before me on 7 November 2011, I directed that the defendants were not to serve any further evidence after 2 December 2011, without leave of the Court. I also gave other directions as to the filing of the plaintiff's evidence in reply. The matter is now listed for hearing in August. 3In February 2012, Ms Caporale appeared, the defendants' solicitor being ill. She sought an adjournment of the proceedings, in order that the defendants could make an application for leave to file further evidence. That was refused. A motion was filed in March in order to pursue that application. It was not supported by evidence adequately explaining what evidence was sought to be adduced, or why it had not been earlier served, in accordance with the Court's directions. The leave sought was refused. 4On 10 May 2012, Ms Caporale filed a further motion seeking leave to serve further evidence. In her affidavit she explained that the defendants' solicitor was ill and had ceased to act in February. It was now apparent to her that crucial documentary evidence had not been led, which would support the defendants' claim that there was an estoppel and that the original contract between the parties had been varied. The evidence would go to the plaintiff's internal policies and practices to demonstrate why the plaintiff's case would not be accepted; that the defendants' claim that they had oral consent from the plaintiff to defer/capitalise payments due was plausible; and that it would be unconscionable for the plaintiff to proceed with any debt recovery. 5In her submissions Ms Caporale clarified that she did not seek to serve further documents, but rather, the opportunity to re-order five volumes of documents which had already been served. That opportunity was not opposed by the plaintiff. The further evidence sought to be led was expert evidence from a former senior employee of another bank, as well as a further affidavit which Ms Caporale proposed to swear. This was opposed by the plaintiff. 6I concluded that the leave sought had to be refused. The Court's overriding obligation is to act in accordance with the dictates of justice, having in mind the overriding purpose specified in s 56 of the Civil Procedure Act 2005, namely, "the just, quick and cheap resolution of the real issues" in the proceedings. 7There was no adequate explanation given by Ms Caporale as to why the proposed evidence was not served in December 2011, in accordance with the Court's directions and it was not apparent that the proposed evidence was either admissible or relevant. 8The defendants have been given every reasonable opportunity to put on their evidence. The opportunity sought now to put on expert evidence, from an expert who had not even been engaged, on the basis of an expectation that his report could be served by the end of June, was not one which commended itself, having in mind not only the history of these proceedings and the defendants' attendance to its obligations to the Court, but also to the issues lying between the parties and what the proposed evidence was apparently to be directed to. 9The defence filed in July 2011 admits various relevant matters, denies the service of certain notices, denies that the plaintiff is entitled to possession of the properties in issue and claims that it is estopped from asserting default, or relying on any default, having in mind conversations between Ms Caporale and certain officers in 2007, in which certain representations were made, which the defendants had relied on to their detriment. Those representations are denied by the plaintiff. The issue which lies between the parties is thus whether the claimed representations were made and if they were, whether they gave rise to the claimed estoppel. There is no issue raised on the pleadings as to the plaintiff's relevant polices and practices. In those circumstances it was apparent that the further evidence which Ms Caporale sought to lead was of questionable relevance to what was in issue between the parties. 10Ms Caporale explained that the expert's evidence would go to credibility, having in mind the Bank's internal policies. It was not suggested that the proposed expert had any involvement in the dealings between the parties, was present at the time of the discussion in issue, or has had any involvement in the parties' dealings. 11A person may only give opinion evidence as an expert if they have specialised knowledge based on their training, study or experience. Any opinions expressed must be based wholly or substantially on that knowledge (see s 79 of the Evidence Act 1995). Under s 102 of the Evidence Act credibility evidence about a witness is not admissible. It was not suggested that the proposed expert had specialised knowledge of a kind which would qualify him to give opinion evidence in relation to credibility under s 108C, to the contrary, his expertise was said to relate to banking practice. 12That is not expertise of a kind which would appear to provide a foundation for the giving of any credibility evidence. What is proposed appears to suffer from the difficulty discussed by McCallum J in Harris v Bellemore [2009] NSWSC 1497: "35 Questions 2 to 8 and 10 to 12 are directed to evidence given by Dr Bellemore in the proceedings that certain images appearing on x-rays of the plaintiff depict a conical washer. Until 1 April 2009, Dr Bellemore had maintained that he used conical washers on the Illizarov frame fixed to the plaintiff's leg. However, in circumstances set out in my judgment given in respect of the plaintiff's application to amend the pleadings dated 28 April 2009, Dr Bellemore has since conceded that he did not use conical washers on the frame 36 In those circumstances, the plaintiff seeks to direct questions to the expert witnesses on liability as to the credibility of the evidence previously given by Dr Bellemore on that issue. For example, question 2 asks: "Is it credible in your view that an orthopaedic surgeon of approximately 25 years experience in orthopaedics and over 15 years experience using Illizarov frames could as at 2009 believe that it was the image of a conical washer?" 37 In respect of those questions, Mr Kelly submitted "these questions go to credit which is a critical matter in the issues between the parties in relation to what if any warnings were given to the plaintiff". 38 The concession that the questions go only to credit invokes the application of the exclusionary rule in s 102 of the Evidence Act, which provides that credibility evidence about a witness is not admissible. The only exception to that rule under which the evidence might be admitted is s 108C, which provides: "(1) The credibility rule does not apply to evidence given by a person concerning the credibility of another witness if: (a) the person has specialised knowledge based on the person's training, study or experience, and (b) the evidence is evidence of an opinion of the person that: (i) is wholly or substantially based on that knowledge, and (ii) could substantially affect the assessment of the credibility of the witness, and (c) the court gives leave to adduce the evidence." 39 Mr Muston relied on the Explanatory Memorandum to the NSW amending act (set out in Odgers, Uniform Evidence Law (8th ed)) at [1.3.8640] which states: "The new section is intended to enable the admission of expert opinion evidence that is relevant to the fact finding process (for example, to prevent misinterpretation of the behaviour of a witness with an intellectual disability or cognitive impairment, or inappropriate inferences from such behaviour)". 40 Further guidance as to the legislative purpose of s 108C(1) may be gleaned from subs (2) which discloses that one of the areas of specialised knowledge contemplated in the section is knowledge of the impact of sexual abuse on children and their behaviour during and following the abuse. 41 I do not think that s 108C was intended to enable parties in a medical negligence case to call evidence from their expert witnesses on liability as to the credibility of the defendant doctor. The specialised knowledge of the expert liability witnesses in the present case is not in any field that touches on the assessment of the credibility of their colleagues. 42 Further, it would in my view be quite wrong to encourage or permit the expert witnesses to give evidence on those issues. It would tend to compromise their independence as expert witnesses, inviting them to enter the field that should be exclusively reserved for the trial judge of determining the facts in issue. 43 Mr Kelly submitted that the defendant's reliance on s 108C arises from "the erroneous proposition that s 108C(2) is an exclusionary rather than an inclusionary subsection". I think that submission misconceives the defendant's point. Plainly, the particular kind of specialised knowledge referred to in s 108C(2) is not the only kind of specialised knowledge that might establish an exception to the credibility rule. The defendant's contention, which I accept, was that any opinion of the experts on liability in these proceedings as to the credibility of Dr Bellemore's evidence could not be substantially based on their specialised knowledge." 13In the absence of any suggestion that the expert's area of expertise is such as would qualify him to give the opinion evidence proposed, it was not possible to see that such evidence would either be relevant or admissible, given what is in issue between the parties, namely a dispute over whether or not alleged representations were made and if they were, whether they gave rise to an estoppel. 14In all of those circumstances it seemed to me that consistently with the overriding purpose and the dictates of justice, the leave sought had to be refused. 15It should also be noted that when the defendants were before the Court of Appeal, it was observed that there was no material before that Court disclosing Ms Caporale's authority to act on behalf of the various individual and corporate defendants, apart from herself, for whom she had purported to act in the past. The defendants were then legally represented. That is no longer the case. The Court of Appeal noted at [36] that: "If at any point legal representation should cease, but proceedings continue, the Court will need to be affirmatively satisfied that she has authority to take steps, and potentially incur liabilities, on behalf of others." 16That does not appear to have occurred. It is a matter which Ms Caporale must attend to, if she seeks to represent the other defendants further in the proceedings.