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[2003] FCA 263
procedural. Leave was granted to the applicant to reopen his case to lead the further evidence set out in the affidavits of John Frost, sworn 26 February 2003, and Walter Van Nieuwkuyk, sworn 27 February...
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The Court allowed Patrick to reopen his case, even though both sides had finished presenting evidence, so he could introduce two affidavits about how investors' money flowed through transactions connected with the "Crazy For You" Investment Scheme. The evidence related to an issue already raised, and the judge was not persuaded that the respondents had shown irremediable prejudice or that the material had been deliberately withheld. The permission was limited: it did not decide whether the affidavits were admissible or what weight they deserved. Patrick had to pay the respondents' costs of the application.
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2,327 words · generated 29/09/2026
In Patrick v Capital Finance Pty Ltd (No 2) [2003] FCA 263, Tamberlin J considered an interlocutory application to reopen the applicant's case after the evidence had closed, but before final submissions and judgment. The proceeding concerned the “Crazy For You” Investment Scheme. Patrick sought to adduce two affidavits concerning the flow of investors' funds and associated financial arrangements.
The procedural sequence mattered. Patrick had closed his case, and on 18 December 2002 the Court had rejected the respondents' submission that there was no case to answer. The respondents then led their evidence between 10 and 14 February 2003, after which the evidence closed. The matter was listed for final addresses in late April 2003 ([1]). Patrick later sought extensive amendments to his Statement of Claim. Those amendments were refused apart from one exception, because the Court considered that they would cause undue and irremediable prejudice to the respondents. Tamberlin J had delivered reasons on that amendment application on 18 March 2003 ([2]). That earlier ruling is part of the procedural context, but the present application concerned additional evidence on the pleadings as then amended.
The proposed evidence was in two affidavits. John Frost, a director of The Gordon Frost Organisation Pty Ltd (GFO), had already given evidence for Patrick and had been cross-examined before the no-case submission. His new affidavit concerned the circumstances in which Gordon Frost interests received and acted in relation to movements of funds through a Commonwealth Bank account at the Sydney University branch between July and September 1996. It also addressed the assets and liquidity position of GFO and another company in the Gordon Frost group, and referred to a “banking” arrangement with Phillip Emanuel ([3]).
Walter Van Nieuwkuyk had been GFO's executive producer in 1996 and had been involved in the production and dealings with Emanuel. His affidavit referred to two loan settlements, GFO's lack of funds in its account to pay for term bonds and lack of assets to secure any payment it was required to make, a conversation with Emanuel about depositing funds, and an invoice for bank charges ([4]). The Court's reasons describe the topics, but do not set out the affidavits' full contents or determine their factual accuracy.
Tamberlin J granted leave to reopen for the limited purpose of leading the evidence in those affidavits. The order did not determine that the evidence was admissible or establish what weight it should receive. The judge also ordered Patrick to pay the respondents' costs of the application ([15]–[16]).
The Court treated the decision as a discretionary procedural question under Order 35 r 1 of the Federal Court Rules. As recorded at [5], that provision empowered the Court “at any stage” to make an order as the nature of the case required. The parties did not dispute the relevant principles. The judge identified three central considerations: the likely prejudice to those resisting reopening, the reason the evidence had not been led earlier, and whether the interests of justice would be better served by rejecting the application. He referred to Urban Transport Authority of NSW v Nweiser (1991) 28 NSWLR 471 at 478–479 and Smith v NSW Bar Association (1992) 176 CLR 256 at 267.
The proposed affidavits addressed the flow of investors' funds, which the judge regarded as directly relevant to the case advanced on the then-current pleadings ([11]). That issue was not newly introduced by the application. Patrick had advanced from an early stage the contention that investors' funds were channelled through GFO to purchase securities ([12]). The judge also noted that Exhibit D had shown, from early in the proceedings, the contention that money flowed through GFO to Capital's bank account to purchase investment securities ([13]).
The relationship with the existing evidence was important to the prejudice assessment. The affidavits were connected to Frost's earlier affidavit of 27 November 2002, flow charts in Exhibit D concerning settlements on 19 July, 6 August and 21 August 1996, and diagrams in an Australian Taxation Office Report of Findings ([14]). In the judge's view, the proposed material was “in the nature of confirmatory evidence” concerning an issue already canvassed. That reduced the force of the respondents' claim that the evidence would take them by surprise.
The respondents argued that they might have called other evidence or cross-examined differently if the affidavits had been available earlier. They also relied on the duration and complexity of the hearing, the many witnesses called and cross-examined, and the multi-party character of the case ([6]). Tamberlin J was not persuaded that the respondents had established that further evidence would in fact have been called or that the case would have been conducted differently. He regarded those assertions as largely tentative and provisional ([11]). He also considered the proposed evidence relatively limited in scope and was not persuaded that any prejudice would be incapable of remedy. Cross-examination could be provided for if needed ([11], [15]).
The judge separately considered whether Patrick had deliberately chosen not to lead the evidence earlier. He accepted that there had been some tardiness in advancing material that had been obtained, but did not find a deliberate tactical choice. The alleged tactical reason for refusing leave was therefore not made out, and the delay was not enough in itself to exclude the evidence ([7]). He also gave no substantial weight to the submission that Frost's evidence became available only after an undertaking that no action would be taken against Gordon Frost interests ([8]).
Finally, the judge gave weight to the interest in deciding the case on a clarified factual record. He said it was important to expose the true facts in a lengthy class action, provided that this could be done without injustice or undue prejudice. In his view, proceeding to submissions and judgment while excluding relevant circumstances that might assist in determining the true position would be inappropriate ([10]). Balancing that consideration against the asserted prejudice led him to grant leave, while requiring Patrick to meet the respondents' costs.
The judgment does not announce a new general rule replacing the authorities it cites. It applies the framework the parties accepted as “well-settled” for an application to adduce further evidence after all parties have closed their evidence ([5]). The stated framework requires attention to prejudice, the explanation for the late evidence, and the interests of justice. The judgment cites Urban Transport Authority of NSW v Nweiser and Smith v NSW Bar Association as authorities for those considerations, but does not set out their facts or reasoning in detail.
The ruling's practical contribution is its fact-sensitive application of that framework. Relevant considerations included the timing of the application, whether the evidence concerned an issue already in the case, how closely it connected to earlier evidence, whether the opposing parties showed that they would have acted differently, and whether any prejudice could be addressed. Here the evidence concerned a central issue already advanced and was closely connected to materials already before the Court ([11]–[14]). That supported the judge's conclusion that receiving it would not cause unremediable unfairness.
The order also draws a procedural distinction between permission to reopen and later evidentiary rulings. At [15], Tamberlin J expressly stated that granting the application did not mean the material was admissible. He considered it relevant, but left admissibility unresolved and noted the possible need for cross-examination. Thus, the ruling permitted the applicant to seek to adduce the affidavits; it did not establish the truth of their contents or resolve their ultimate evidentiary status.
There was a costs consequence despite Patrick's success on the application. The judge characterised reopening as a “substantial indulgence” and ordered Patrick to pay the respondents' costs of the application and costs flowing from admission of the further evidence ([16]). The judgment therefore illustrates that procedural permission and costs consequences are separate questions.
At [5], the judge identified the principal considerations as “the likely prejudice to the parties resisting the application, the reason why the evidence was not led in the first place, and whether the interests of justice would be better served by the rejection of the application.” In plain English, the applicant's explanation matters, but so does whether the other side can fairly meet the new material and whether refusing it would impede a just resolution.
At [7], the judge was “not persuaded” that a deliberate tactical choice had been made to withhold the evidence. He acknowledged “some tardiness”, but said that was not sufficient to exclude it. This was a finding on the evidence and submissions in this application, not a statement that delay is immaterial in other cases.
At [10], the Court said that in a lengthy class action “it is important that the true facts are exposed”, provided that this can occur without injustice or undue prejudice. The qualification is central: the interest in a complete factual record does not displace fairness to the opposing parties. The judge's conclusion was that the balance in this case favoured allowing the evidence.
At [14], the affidavits were described as “confirmatory evidence” on an issue “earlier canvassed”. That description connected the new material to the existing case and supported the conclusion that the respondents would not be taken by surprise. The judgment does not say that evidence is admissible merely because it confirms earlier evidence.
At [15], the judge cautioned that leave “does not mean” the material is admissible. In plain English, the applicant obtained permission to reopen, but the evidence remained subject to any admissibility question and to possible cross-examination. The ruling should not be read as a finding that the affidavits' factual assertions were proved.
The judgment concerns an application made after all parties had closed their evidence but before final submissions and judgment. The proposed material was directly relevant to a central issue in the existing case: the flow of investors' funds in the relevant loan transactions ([1], [11]). It was not an attempt to introduce an unrelated controversy. The evidence was linked to earlier testimony, charts and other material already relied on ([14]).
A fact pattern resembling this one would therefore involve a late request to adduce evidence that bears on an issue already put in play, with a discernible connection to evidence already heard. The relevance and connection are not automatic grounds for reopening. The judgment also examines why the evidence was not previously led, whether the delay reflected a deliberate tactical decision, and whether the other parties can meet the evidence fairly ([5], [7], [11]).
The procedural stage is significant. The matter had not yet proceeded to final address or judgment, and the judge considered it inappropriate to move to those stages while potentially relevant circumstances were shut out ([1], [10]). The judgment does not decide how the same application would be treated after judgment, on appeal, or in a different procedural setting.
The case also involved complex, multi-party litigation and a substantial hearing. Those features formed part of the respondents' prejudice submission ([6]), but they did not determine the outcome. The judge examined whether the respondents had concretely shown that they would have called additional evidence or changed their cross-examination. He found the submissions on that point largely tentative and considered possible prejudice capable of remedy ([11]).
The supplied judgment contains no account of later judicial consideration of Patrick v Capital Finance Pty Ltd (No 2). It therefore does not establish whether later courts have followed, distinguished, applied or questioned this decision. No later-treatment conclusion can be drawn from this text alone.
Within this judgment, the cited authorities are Urban Transport Authority of NSW v Nweiser (1991) 28 NSWLR 471 at 478–479 and Smith v NSW Bar Association (1992) 176 CLR 256 at 267. Tamberlin J cites them for the parties' undisputed, well-settled principles concerning applications to adduce further evidence after closure of evidence ([5]). The reasons do not describe later cases applying those authorities or discuss a broader chain of precedent.
For research purposes, the safe account of the precedent relationship is limited: Patrick cites those two cases when stating the relevant discretionary considerations, and it applies those considerations to its own procedural facts. The judgment does not claim to modify their principles or determine how its own ruling should govern future cases.
The reasons leave several matters unresolved. First, the Court did not decide whether the affidavits were admissible. It expressly distinguished relevance and permission to reopen from admissibility ([15]). The judgment also does not record the ultimate weight that the evidence received or whether it changed the findings in the substantive proceeding.
Second, the decision does not quantify what cross-examination or other procedural measures would be required to address possible prejudice. It says there “may be need” for cross-examination, leaving that question open to be managed later ([15]). Nor does it describe any further evidence the respondents ultimately sought to call after the affidavits were received.
Third, although the judge considered the delay and rejected the allegation of a deliberate tactical choice on the material before him, the reasons do not set out a general threshold for acceptable delay. The result turned on the particular explanation, the evidence's connection to the existing case and the limited findings about prejudice ([7], [11], [14]).
Fourth, the decision does not establish a general principle that confirmatory evidence should be admitted or that the public interest in exposing the true facts will always outweigh procedural prejudice. The judge expressly conditioned the importance of exposing the facts on doing so without injustice or undue prejudice ([10]). The application succeeded because of the combined circumstances identified in the reasons, not because one consideration was treated as conclusive.
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REASONS FOR JUDGMENT 1 On 18 December 2002 after the applicant had closed his case I refused an application by the respondents to dismiss the proceedings on the basis that there was no case to answer. Evidence was then led by the respondents in the period 10-14 February 2003 and the evidence closed. The matter is currently listed for final address in late April 2003. 2 Subsequently an application was made to make extensive amendments to the Statement of Claim and this was refused, with one exception, on the basis that undue and irremediable prejudice would be caused to the respondents. I delivered reasons for judgment on that application on 18 March 2003. 3 The further evidence now sought to be led by the applicant concerns the ascertainment of the flow of investors' funds in relation to the "Crazy For You" Investment Scheme. There are two affidavits which are the subject of the application. The first affidavit is that of John Frost who is a director of The Gordon Frost Organisation Pty Ltd ("GFO"), which is not a party to the proceeding. Mr Frost has previously given evidence for the applicant and was cross-examined prior to the no-case submission. The affidavit sought to be filed relates to the circumstances in which Gordon Frost interests received and acted in relation to the movement of funds in a Commonwealth Bank account held at the Sydney University branch in the period July to September 1996 and it contains statements as to the assets and liquidity position of GFO and another company in the Gordon Frost group. The affidavit refers to a "banking" arrangement with Phillip Emanuel, whose company is the seventh respondent which, although a party to the proceeding, has not appeared or participated in the case. 4 The second affidavit sought to be filed is that of Walter Van Nieuwkuyk who, at the relevant time in 1996, was employed by GFO as executive producer. He was involved in the production of the "Crazy For You" production and had dealings with Phillip Emanuel in relation to it. He attended two loan settlements and his evidence is to the effect that GFO did not have funds in its account to pay for any term bonds purchased, nor did it have any assets to secure any payment that it was required to make. He refers to a conversation with Phillip Emanuel in relation to the deposit of funds. He also makes reference to an invoice in respect of bank charges levied on GFO. 5 In this case the application to re-open and lead further evidence is made before submissions and judgment. Order 35 r 1 of the Federal Court Rules ("FCR") confers power on the Court at any stage to make such order as the nature of the case requires. The question is whether the power should be exercised in favour of the applicant. There is no dispute between the parties as to the relevant, well-settled principles which apply in respect of an application to adduce further evidence after the close of evidence from all parties. The principal considerations are the likely prejudice to the parties resisting the application, the reason why the evidence was not led in the first place, and whether the interests of justice would be better served by the rejection of the application: see Urban Transport Authority of NSW v Nweiser (1991) 28 NSWLR 471, at 478-9; Smith v NSW Bar Association (1992) 176 CLR 256 at 267. 6 The submissions made by the respondents are that consideration may have been given to calling other evidence if the two affidavits now sought to be filed had been filed at the outset or during the course of the proceedings prior to the close of the evidence. It is also said that the case would have been conducted differently if this evidence had been addressed at the outset or at an earlier stage by the possibility of calling further evidence or cross-examining differently. Because the case has been conducted without this evidence having been adduced the respondents say that they would suffer detriment in now meeting the evidence, particularly having regard to the duration of the hearing over many days and the substantial number of witnesses called and cross-examined at a point in time when this evidence had not been called in what can properly be described as complex multi-party litigation. 7 It has been submitted that there was a deliberate tactical choice on the part of the applicant and his legal advisers not to bring this evidence forward, but I am not persuaded, having regard to the affidavit of Ms Susan Phillips of 27 February 2003 and the cross-examination thereon, that any deliberate choice was made to that effect and I do not consider that this ground for refusing the application has been made out. It does appear that there was some tardiness in advancing the material which had been obtained but I do not consider that it is a sufficient basis to exclude the evidence. 8 It is also submitted by the respondents that the additional evidence from Mr Frost was only forthcoming after an undertaking had been given to Gordon Frost interests that there would be no action taken against them. I do not think that any substantial weight ought to be given to this consideration on the application. 9 Determination of the importance and weight to be assigned to the evidence is not to be resolved at this point but it could not be said to be so insubstantial, immaterial or futile as to warrant rejection. The evidence is directly concerned with the question as to the flow of funds. 10 In a lengthy hearing such as the present, involving a class action, it is important that the true facts are exposed, provided this can be done without injustice or undue prejudice to affected parties. To proceed to judgment where the facts in issue can be clarified without injustice to the parties without allowing that evidence to be put before the Court would be detrimental to public confidence in the administration of justice and the case could be seen to have proceeded on a false basis. In the present circumstances it is inappropriate to proceed to submissions and judgment in this matter on the basis that relevant circumstances sought to be placed before the Court which may assist in determining the true position are shut out. 11 The evidence sought to be adduced is directly relevant to the case advanced by the applicant on the pleadings as currently amended which is directed to the way in which funds flowed in the relevant loan transactions. It is a relatively short compass and I am not persuaded that any suggested prejudice to the respondents would be incapable of remedy. I do not think that it would be unjust to allow the evidence to be adduced subject to, of course, cross-examination. I am not persuaded that additional evidence would have been called if the new affidavits had in fact been filed at the outset or in the course of the proceedings or that the case would have been conducted differently. The assertions to this effect from the Bar table are for the most part cast in tentative and provisional terms. 12 It has been the contention of the applicant from an early stage in the presentation of the case that the investors' funds were channelled through GFO to purchase the securities, and it is the issue which lies at the centre of the dispute between the parties. 13 From very early in the proceedings it was evident from Exhibit D that the contention of the applicant was that monies flowed through GFO to the bank account of Capital in order to purchase the investment securities. The evidence was put forward on this basis. 14 The affidavits now sought to be read are closely linked to earlier evidence advanced in this case prior to the determination of the no-case submission. In particular, the material is linked to the evidence of Mr Frost in his affidavit of 27 November 2002, to the flow charts in Exhibit D concerning the loan settlements of 19 July, 6 and 21 August 1996, and to the diagrams in the Report of Findings produced by the Australian Taxation Office concerning the Investment Scheme. Because of this close link to earlier evidence it does not raise a matter which can be said to take the respondents by surprise. It is in the nature of confirmatory evidence, in respect of an issue earlier canvassed. 15 Accordingly, for the above reasons, I grant the application to re-open for the limited purpose of adducing the further evidence in these affidavits. This does not mean of course that the material is admissible, although I consider that it is relevant to the issues for decision. There may be need for provision for cross-examination. 16 Because a substantial indulgence is now sought in respect of this application, in the circumstances I consider that the costs of the application to re-open and any costs flowing from the admission of the further evidence should be paid by the applicant. The order of the Court is that the application to adduce the further evidence is granted and the applicant is to pay the respondents' costs.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.
Counsel for the Applicant: C L Pannam QC T J McLean
Solicitor for the Applicant: Corrs Chambers Westgarth
Counsel for the First, Second, Third and Fourth Respondents: E N Magee QC D M Austin
Solicitor for the First, Second, Third and Fourth Respondents: Voitin Walker Davis
Counsel for the Fifth Respondent: R Garratt QC M Moshinsky
Solicitor for the Fifth Respondent: Cornwall Stodart
Counsel for the Sixth Respondent: P M Bornstein
Solicitor for the Sixth Respondent: Phillips Fox
Date of Hearing: 21 March 2003
Date of Judgment: 28 March 2003
Patrick
Capital Finance Pty Ltd
(1991) 28 NSWLR 471
(1992) 176 CLR 256
Leave was granted to the applicant to reopen his case to lead the further evidence set out in the affidavits of John Frost, sworn 26 February 2003, and Walter Van Nieuwkuyk, sworn 27 February 2003. The applicant was ordered to pay the respondents' costs of the application. The Court did not determine the admissibility or weight of the material.