Philip Karadaghian v Big Beat

The Evidence 15The Court received evidence dealing with the alleged facts as to the identity of the supplier of security services at the relevant time and place. That evidence must be received in the context that Ambiant continues to maintain that it was the security provider contracted to Big Beat at the relevant time and place. 16I deal first, although the evidence was adduced later in time, with the testimony of Mr Victor Moraitis. As earlier stated, he was a Director of Ambiant as at 20 October 2007. He instructed his solicitors to file Ambiant's Defence in the proceedings now before the Court. Therefore, he was responsible for the admission to which Ambiant still adheres. 17By affidavit affirmed 2 November 2011, Mr Moraitis confirmed that Ambiant was the relevant security provider. He also attested to the existence of an incident report relating to the plaintiff's assault, recorded in the security diary kept by Ambiant. 18His oral evidence was to a slightly different effect. He gave evidence as to the establishment of Ambiant by two persons, including himself, with the stated intention that it would provide security services to Home Nightclub. It was intended to supersede Southland as the provider of security services. 19His oral testimony was to the effect that Ambiant commenced providing security services to Home Nightclub in mid-2007. 20His evidence was to the following effect. Mr Moraitis met with Mr Page at least weekly and discussed security services. Mr Moraitis told Mr Page of the existence of Ambiant at or about the time he set up the company. As at 30 June 2007, Mr Page was aware that the business of Ambiant had started to provide security and the company had been brought to Mr Page's attention on more than half-a-dozen occasions as at 20 October 2007. 21Mr Moraitis testified that it was Ambiant that employed and paid the security guards (Transcript, 83). 22Arguably inconsistently, Mr Moraitis also attested that Ambiant was conducting its business "in conjunction" with Southland and that the security services were provided by Southland but billed as Ambiant. 23Mr Moraitis was the "Principal", in his view, of both Southland and Ambiant, and a number of other corporate entities. He also testified that Southland's licence was the one displayed at Home Nightclub at 20 October 2007. It was a requirement of the law that the security licence be displayed. 24The plaintiff submits that I should reject Mr Moraitis' evidence at it "defies all credibility". I will deal with that submission after dealing with the other evidence. 25The Court has already dealt, in part, with Mr Waterson's evidence. He testifies as to the manner in which he came to the conclusion necessary for the making of the admission in November 2008 and for adherence to that admission in instructions that gave rise to the filing of the Defence. As earlier stated, Mr Waterson does not state that Mr Page was unavailable at the time in 2008 when the request from the plaintiff was answered. Further, Mr Waterson does not say that he did not speak to Mr Page about that response. 26Mr Waterson does say that the records of Big Beat that he inspected disclose that the invoice for the security services was an invoice from Ambiant, which was paid. However, on a later inspection he believes, from some other records, that PGP Security was the relevant provider. He has no independent recollection of the identity of the security provider and was not privy to the terms of the security contracts. 27Mrs Page testified as to the fact that Mr Page dealt with security arrangements exclusively on behalf of Big Beat. She has no direct knowledge of any arrangements made with Ambiant, Southland, or PGP Security. However, Mrs Page testified that she gave instructions to Mr Waterson that Ambiant were the security provider for the purposes of the pleadings, not the earlier letter. She does not testify that Mr Page did not give such instructions. 28Mrs Page was aware, from conversations, that Mr Moraitis provided security services via corporate entities rather than in his personal capacity. In particular, Mrs Page was unaware whether Mr Page had contracted Ambiant to provide security services on 20 October 2007, but did recall seeing a master licence of "PGP Southland" in the security room at the Nightclub and, at a later time, for Southland. Further, while Mrs Page was aware of "PGP" and/or "Southland", she was unable to locate any invoices for Southland. Her knowledge of Southland seems to be confined to seeing its master security licence, although the date it was seen is unclear and unknown. The later discovered invoices, although not clear, relate to "PGP Security" but not to "Southland" by name. 29Ms Page (i.e. Sophie Page) worked for Big Beat at Home Nightclub but was not involved in any negotiations with Mr Moraitis concerning security contracts. Her affidavit attests to recalling Southland's security licence displayed at the Home Nightclub prior to 2007. She could not recall ever seeing a licence for PGP, otherwise known as Paramount Global Protection, or for Ambiant. She accepted that she had no recollection or independent recollection of whose security licence was being displayed at a time before January 2008. 30Mr Stamatakis was one of the security guards at Home Nightclub and said he was employed by Ambiant on the night in question. He testified that Ambiant paid his wages in 2007 but could not specifically recall whether that included 20 October 2007 because of the passage of time. Likewise, he could not recall the master licence that was being displayed at the Nightclub. 31Mr Jon Dupre gave evidence. Mr Dupre was the licensee nominated on the master security licence held by Southland as at 20 October 2007. 32Mr Dupre with Mr Gerald Gleeson, Mr Moraitis and Mr Markowski formed Southland Security and Protection Pty Ltd in December 2006. The company obtained a master licence under which, initially, Mr Markowski was the nominated licensee. 33The venture was not successful. Mr Moraitis and Mr Markowski resigned from the board of the company and as Directors on 30 June 2007, or effective as that date. Mr Dupre wrote to the Security Licensing and Enforcement Directorate of the New South Wales Police Force on 11 July 2007 substituting his own name for that of Mr Markowski as the master licence holder and doing so on the ground that Mr Markowski had resigned from Southland. Mr Dupre did not inform ASIC as soon as he should have, but I accept his evidence that the failure to notify ASIC was an oversight. 34Mr Dupre testified that Mr Moraitis had no further business dealings with Southland after 30 June 2007 and that Southland never provided security services to Big Beat after 30 June 2007. In particular, Mr Dupre testified that Southland was not providing security services at the Home Nightclub on 20 October 2007. Mr Dupre held, in his possession, the master licence for Southland as at 20 October 2007 and it was never (i.e. after 30 June 2007) displayed at the Home Nightclub, which premises he had never attended. 35Importantly, from the prospect of prejudice, Mr Gleeson, his business partner, who, according to Mr Dupre would have corroborated his evidence, passed away in February 2011 and the business records, that, according to Mr Dupre would also have corroborated his evidence, were destroyed in July and December 2010. 36It is unnecessary for me to come to any final conclusion on credibility. The evidence can be reconciled. If it were necessary to state a preference, I would clearly prefer the evidence of Mr Dupre over that of Mr Mortaitis. Mr Dupre's evidence was corroborated by independent contemporaneous records. 37Nevertheless, the evidence is reconcilable. It seems that Mr Page and Mr Moraitis had meetings with each other about the provision of security services, during which discussions agreement was reached. It also seems that Mr Moraitis paid little or no regard to the separation of the corporate entities with which he was associated, or was once associated, or the proper identification of the entity on behalf of whom he was acting. To reiterate the somewhat trite proposition of the former Lord Chancellor, Edward Thurlow, corporations have neither bodies to be punished nor souls to be condemned. They act through individuals. 38The evidence establishes that Mr Page and Mr Moraitis concluded an agreement for the provision of security services. Mr Page was acting on behalf of Big Beat. The evidence is ambivalent as to the entity on behalf of whom Mr Moraitis was acting. It may be the identity of the security provider was a matter left to the discretion of Mr Moraitis. Nevertheless, on the evidence before the Court, at this juncture, Mr Mortaitis was not in a position to agree on behalf of Southland to provide security services and the security services were not provided by Southland. 39On the balance of probabilities, the evidence of Mr Stamatakis is accurate. It is most likely that he provided security services on 20 October 2007 as an employee of Ambiant. 40The importance of that finding is that Ambiant was not a licensed provider of security services under the Security Industry Act 1997 at the time that the plaintiff suffered his injury. Ambiant was deregistered on 6 October 2010. Its registration was reinstated by the Court on the application of the plaintiff. The allegation of negligence against Big Beat includes a substantial allegation that Big Beat was negligent in outsourcing its security services to an entity that was not licensed. 41There is no evidence that Mr Moraitis is, himself, the holder of a master licence. Even if Big Beat agreed with Mr Moraitis that he, through one or another entity, would provide security services, without ensuring that the services were to be provided by a holder of a master licence, Big Beat would have similar, but not identical, difficulties with an allegation of negligence. 42Nevertheless, the Court finds, on the balance of probabilities, that Ambiant was the provider of security services and that Mr Moraitis was negotiating those security services on behalf of Ambiant, which employed the security guards. The Court is not in a position to find that the foregoing arrangement has been disproved or that the foregoing arrangement is contrary to the facts, or even the arguable facts, arising from the evidence that has been adduced. At best, from the perspective of Big Beat, it can be said that it is arguable that there is a possible hypothesis inconsistent with that state of affairs.

Principles on Withdrawal of Admissions 43The Uniform Civil Procedure Rules 2005 (UCPR) at r 12.6 deals with the question of withdrawals. The Rule is in the following terms: "r 12.6 Withdrawal of matter in defence or subsequent pleading (1) A party raising any matter in a defence or subsequent pleading may withdraw the matter at any time. (2) Despite subrule (1), a party may not withdraw any admission, or any other matter that operates for the benefit of another party, except with the consent of the other party or by leave of the court. (3) A withdrawal under this rule is to be made by filing a notice of withdrawal stating the extent of the withdrawal. (4) If the withdrawal is by consent, the notice under subrule (3) must be accompanied by a notice from each party whose consent is required by subrule (2) to the effect that the party consents to the admission or other matter being withdrawn in accordance with the notice of withdrawal." 44In turn, the Court's exercise of discretion to grant leave to withdraw an admission is informed by the provisions of s 64 of the Civil Procedure Act 2005 (the Act), which provides the Court with the power to amend any document at any time in the proceedings and, as a consequence, imports the criteria in s 58 of the Act and, necessarily s 56 and s 57 of the Act. Those provisions are in the following terms: "s 56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3): (a) any solicitor or barrister representing the party in the proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs. (6) For the purposes of this section, a person has a relevant interest in civil proceedings if the person: (a) provides financial assistance or other assistance to any party to the proceedings, and (b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings. s 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). s 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case. s 64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate." 45The exercise of discretion in allowing the withdrawal of admissions has been the subject of significant authority. As his Honour White J commented: "Admissions made formally and deliberately by a party legally advised should not be permitted to be withdrawn unless the party seeking to withdraw them can point to an error when the admissions were made or a relevant change of circumstance" (SLE Worldwide v WGB & Ors [2005] NSWSC 816) 46His Honour referred to Sangora Holdings Pty Ltd v Dunstan (unreported, Supreme Court of Western Australia, Full Court, 13 April 1999) to the effect that the withdrawal of an admission in a pleading is a serious matter because from that point onwards the admitted fact ceases to be an issue and the action precedes upon that assumption, which, in its absence, may have resulted in a very different proceeding or a proceeding on a very different basis. Moreover, the longer the period during which the admission has stood, the less readily permission will be granted for its withdrawal. 47Fundamentally, the courts have indicated that the indulgence of granting leave to withdraw an admission may be granted where the applicant can show: (i)That the admission was made inadvertently; or (ii)That the admission was contrary to the established facts. 48As stated by Santow J (as his Honour then was) in Drabsch v Switzerland General Insurance Company Ltd & Ors (unreported, 16 October 1996, Supreme Court of NSW), where his Honour discussed the principles relating to consent to the withdrawal of particular admissions and said: "I set these principles out as follows:

1. Where a party under no apparent disability makes a clear and distinct admission, which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the court, an application to withdraw the admission, especially at appeal, should not be freely granted; Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ Comm D, followed in IOL Petroleum Ltd v O'Neill per Young J (Young J, 17 November 1995, unreported) and Apex Pallett Hire Pty Ltd v Brambles Holdings Ltd (Supreme Court of Victoria, Full Court, 8 April 1988, unreported), and in that respect not following H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 at 703.
2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guideline being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded; IOL Petroleum Limited v O'Neill (supra), in the context of withdrawing a concession made before the Registrar.
3. Where a court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after a full opportunity to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn; Coopers Brewery Ltd v Panfida Foods Ltd (supra) at 745 and 748. Thus a court will not lend its approval to the withdrawal of admissions where, by analogy with the making of amendments, this is actuated by purely tactical reasons; compare Devae Prufcoat Pty Ltd v Altex Industrial Paints Ltd (Cole J, 15 March 1989, unreported).
4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission; H Clark (Doncaster) Ltd v Wilkinson (supra), in that respect not doubted.
5. Following Cohen v McWilliam and Anor (1995) 38 NSWLR 476, a court is not obliged to give decisive weight to court efficiency, such that a party who wishes to defend its claim is entitled to a hearing on the merits, with cost orders being available as a means of compensating the other party for any costs thereby unnecessarily incurred or not fairly visited on the other party." 49The foregoing recitation of principle needs to be understood in the context that his Honour was then dealing with an appeal but, with the necessary changes being made, the principles apply with similar force. Further, the judgment of his Honour was delivered prior to the judgment of the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175, which confirmed the wider considerations necessary, other than the rights of any individual party, mandated by the provisions of the Civil Procedure Act in order "to facilitate the just, quick and cheap resolution of the real issues in the proceedings" and issues of case management. These involve due consideration to the public interest and the efficient management of courts' resources. Notwithstanding those qualifications, the principles enunciated by Santow J in Drabsch, supra, inform the exercise of the Court's jurisdiction and power.

Conclusion 50There are two fundamental issues with which the Court must deal in determining whether or not to grant leave to withdraw the admissions made. A third issue emerges being the delay in the application from the time when the admission was first made or between now and the time when the facts became known to the applicant. 51Nevertheless, it seems that the issue of delay need not be one that requires discussion, given the view the Court, as presently constituted, has as to the two fundamental issues. Those issues are whether the admission was inadvertently made and whether the admission was contrary to the established facts. 52The admission was a formal and deliberate admission made initially in correspondence and later in pleadings. The admission was made at a time when the individual responsible for contracting between Big Beat and the providers of security services was available and active in the management of Big Beat. The officer of Big Beat that made the admissions was a person authorised so to do and made those admissions, at least, after a study of the relevant documentation. 53In the foregoing circumstances, the admission was not made inadvertently or by mistake. The question that then arises is whether the admission was wrong, namely, contrary to established facts. 54As is clear from the findings of fact made earlier in these reasons, Big Beat has failed to satisfy the onus cast upon it to satisfy the Court that the admission made was contrary to established facts. At best, from Big Beat's perspective, there is an arguable possibility that a corporate entity other than Ambiant was the contracting party with Big Beat. Nevertheless, on the evidence before the Court, Ambiant was the employer of the security guards. Ambiant was also a company with which Mr Moraitis was associated. 55As earlier stated, the overwhelming impression is that Mr Moraitis is a person who paid insufficient regard to differentiating between the various corporate entities with which he was associated and paying insufficient regard to identifying precisely the corporate entity on behalf of which he was then acting. The evidence adduced by Big Beat does not satisfy the Court that Ambiant was not the supplier of the security services with which it was utilising and with which it had contracted. 56The foregoing conclusion is made bearing in mind that the balance of probabilities is the requisite burden of proof, but also bearing in mind, in an interlocutory application of this kind, that something short of final acceptance of the truth or accuracy of the evidence to be adduced is required. In other words, if the evidence to be adduced by Big Beat in this area was unequivocal, even though subject to issues of credit, it would seem to me that Big Beat would have satisfied the onus cast upon it. It is not for the Court as presently constituted to determine with finality which of a number of witnesses is to be preferred at trial. 57However, the evidence adduced by Big Beat comes nowhere near that lower requirement. I am not satisfied that the admission, when made or now, was contrary to established fact or facts, if the evidence adduced by Big Beat were to be preferred. 58Lastly, the unavailability of one crucial witness (Mr Gleeson) and the unavailability of a significant amount of documentation points to an irremediable prejudice that would be suffered by Mr Karadaghian, if the admission were withdrawn. Material that has been produced, including earlier invoices in relation to companies other than either Ambiant or Southland; the official records in relation to master licences and ASIC records, including correspondence with ASIC; and the failure to produce or be capable of producing the security licence said to have been displayed at the relevant location on the relevant night; point not only to prejudice but to the likelihood that the admission made was open and probably correct. 59Following the major hearings in relation to these matters, the applicant on the motion (Big Beat) sought leave to re-open because of further documentation that was discovered by it, but had not previously been produced in answer to a subpoena that covered the documents. The foregoing is not intended as a criticism of the answer originally given to the subpoena. 60The additional material points starkly to the failure of Mr Moraitis to differentiate clearly between various corporate entities with which he had an association. It takes the matter little further. 61In the circumstances, the Court refuses leave to withdraw the admission. Little or no attention has been paid to the cross-claim. Different issues arise in relation to it. I will reserve the parties' rights in relation to the cross-claim which may go only to questions of contribution. In the circumstances, the Court makes the following orders:

1. Prayer 5 of the Motion, notice of which was filed on 27 September 2012, dismissed;
2. Prayers 1, 2, 3 and 4 of the Motion, notice of which was filed on 27 September 2012, adjourned to a date to be fixed;
3. The first defendant pay the plaintiff's costs of and incidental to the motion, except those costs solely referable to an appointment with and the report of Professor Mattick, which costs will await the outcome of those particular prayers for relief.
4. Liberty to apply on 2 days' notice.

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