Asia Platinum Group Ltd v Firmware Technologies Inc
[2015] WASC 310
•19 AUGUST 2015
ASIA PLATINUM GROUP LTD -v- FIRMWARE TECHNOLOGIES INC [2015] WASC 310
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 310 | |
| 19/08/2015 | |||
| Case No: | CIV:2506/2012 | 3 JULY 2015 | |
| Coram: | MASTER SANDERSON | 3/07/15 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Judgment for the plaintiff | ||
| B | |||
| PDF Version |
| Parties: | ASIA PLATINUM GROUP LTD FIRMWARE TECHNOLOGIES INC |
Catchwords: | Practice and procedure Failure to comply with terms of springing order Turns on own facts |
Legislation: | Nil |
Case References: | Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
FIRMWARE TECHNOLOGIES INC
Defendant
Catchwords:
Practice and procedure - Failure to comply with terms of springing order - Turns on own facts
Legislation:
Nil
Result:
Judgment for the plaintiff
Category: B
Representation:
Counsel:
Plaintiff : Mr M C Goldblatt
Defendant : Mr L Hager
Solicitors:
Plaintiff : Milton Graham Lawyers
Defendant : Metaxas & Hager
Case(s) referred to in judgment(s):
Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203
1 MASTER SANDERSON: This matter was in the CMC list and was managed by Edelman J prior to his departure from the court. On 3 July 2015, I heard an application by the plaintiff seeking to enter judgment based upon the defendant's failure to comply with a springing order. After hearing argument I made the orders sought by the plaintiff. I indicated I would publish reasons for that decision. These are those reasons.
2 On 6 May 2015, I made certain case management orders designed to carry this matter through to trial. Relevantly, orders 14 and 21 were made in the following terms:
14. Each witness statement shall satisfy the following formal requirements:
(a) It should be set out in numbered paragraphs.
(b) As far as possible, it should be expressed in witnesses' own words.
(c) It should contain evidence only in admissible form. For example, inadmissible hearsay should be avoided.
(d) Where the witness statement contains conversations it should, if the witness' recollection permits, be expressed in direct speech. If this is not possible, this fact should be stated and the witness' best recollection or the substance of the conversation may be set out.
(e) Any documents referred to in the statement should be identified by reference to the discovery number of the document. Documents referred to in the statement should not be annexed to, or copied and supplied with the statement. Once the trial bundle has been prepared, a further copy of each witness statement is to be produced by the party serving the statement, marked up to as to show the volume of the trial bundle, and the page number within the volume, of each document referred to in the witness statement.
(f) It should contain at the end of the statement the following verification:
'I have read the contents of this my witness statement and the documents referred to in it and I am satisfied that it is correct and that this is the evidence-in-chief which I wish to give at the trial of the proceeding'.
(g) It shall be prepared in accordance with the best practice guide 01/2009 issued by the Western Australian Bar Association Supreme Court of Western Australia entitled 'Preparing Witness Statements for Use in Civil Cases' and shall contain a certificate to that effect signed by the practitioner most responsible for its preparation.
21. The defendant shall be entitled to file statements of intended evidence in respect of witnesses that it is issuing subpoenas to attend to give evidence at the trial.
3 The defendant failed to file its witness statements by 15 May 2015. At a directions hearing on 4 June 2015 I made the following order:
Unless by 18 June 2015 the defendant complies with each of orders 1, 2 and 12 of the orders of Master Sanderson dated 6 May 2015 the defendant's defence be struck out and there be judgment for the plaintiff in the sum of $1,023,000.000 with monthly arrests at the rate of 10% per month from 1 May 2012 to date of payment and costs.
4 The time for compliance of 18 June 2015 was adopted from the affidavit of Roderick John Hager, the defendant's solicitor, sworn 4 June 2015. In that affidavit Mr Hager said he had spoken to a Mr Blandin, the principal of the defendant, and Mr Blandin has assured Mr Hager that Mr Blandin was available to address outstanding matters from the defendant's side. It is perhaps worthy of note that at the time the springing order was made, the plaintiff's counsel proposed a shorter timeframe.
5 In purported compliance with the springing order a document purporting to be the witness statement of Jean-Jacques Blandin dated 18 June 2015 was served by the defendant on the plaintiff. It was the plaintiff's position that the statement was so defective it did not comply with the order for the filing of witness statements by the defendant. It followed the springing order had not been complied with and the plaintiff was entitled to judgment.
6 It is important at this point to make two points. What was at issue in the plaintiff's application was a question of fact - did the document the defendant filed fit the description of a 'witness statement'. The second point flows from the first. This was not a case where case management principles were at issue. It was not a matter of determining whether during a course of proceedings the defendant had consistently failed to comply with case management directions. That question may have been relevant had the defendant sought as a fall-back position an extension of time to comply with the springing order. That was not done. So, what was required was nothing more or less than a finding of fact.
7 I mention these two points for two reasons. First, in the course of his submissions, counsel made much of the fact that there had from time to time been a disregard by the defendant of case management directions. A review of the file shows that was in fact the case. But, the defendant's conduct was not relevant to this application and did not play any part in my decision.
8 Second, so far as the defendant was concerned counsel, during the course of his submissions, maintained the defendant had a very strong defence to the claim. Counsel submitted it was 'obvious' that an interest rate of 10% per month was a penalty and the plaintiff's claim was doomed to failure. It can be accepted that the defendant had an arguable defence. But, if that defence was 'obvious' then a defendant's summary judgment application would presumably have succeeded. None was brought. In any event, the strength or otherwise of the defendant's position played no part in my decision. It might have done so had there have been an application for an extension of time to comply with the springing order.
9 Counsel for the plaintiff put his submissions on a number of different grounds. First, he submitted there had been no real attempt to comply with order 14 of the orders made 6 May 2015. At the end of Mr Blandin's statement there appears a statement which is required by order 14(f) of the orders. But, after that statement there appears a handwritten notation made by the defendant's solicitor. It reads:
There is additional narrative and attachments which the defendant may apply for leave to put into evidence in advance of the trial.
10 Second, counsel submitted the statement does not set out admissible evidence in chief. What Mr Blandin's statement did was address paragraphs in the witness statement of Mr Peter McAleer filed on behalf of the plaintiff; what Mr Blandin's statement did was make denials as if it were a pleading. That, it was said, is not a witness statement.
11 Finally, counsel pointed to the fact that the defendant's solicitor had certified at the end of the statement that it had been prepared having regard to the Best Practice Guide 01/2009 issued by the West Australian Bar Association entitled 'Preparing Witness Statements for Use in Civil Cases'. It was submitted that the statement breached fundamental principles of the Best Practice Guide. In particular, the witness should not be shown the written statement another witness. A witness statement is not a pleading. A witness statement should never adopt the form of responding to particular paragraphs in other witness statements and the witness should not be told what is in other witness statements. These points are made in par 23 and par 24 of the Guide. In response, counsel for the defendant made two main points.
12 First, he pointed out the statement of Mr Blandin is 175 paragraphs long and responds to every fact, matter, and allegation made in the plaintiff's witness statements by identifying the relevant paragraphs in the statements of Peter McAleer and Jim McAleer.
13 Second, he submitted that Mr Blandin, in at least 161 paragraphs of his statement, denies, disputes or challenges the evidence given by Peter McAleer and Jim McAleer. As a consequence, it was submitted that plaintiff's counsel would have to subject Mr Blandin to cross-examination if the plaintiff was going to ask the court to prefer the evidence of Peter McAleer and Jim McAleer over Mr Blandin.
14 There was no real dispute between the parties as to the legal principles involved. Counsel for the plaintiff referred to a number of different authorities but it is sufficient if I quote from what was said by French J (as his honour then was) in Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203. His Honour was discussing the meaning of non-compliance in respect of a self-executing order. He said:
Where compliance requires, as in this case, filing of the applicant's evidence, the failure to file anything at all would have the clear consequence that the application would stand dismissed. Where the evidence filed could be characterised as so incomplete in material respects as to be a derisory or colourable compliance then again there would be little difficulty in concluding that the self-executing order had not been complied with and that the application stood dismissed [102].
15 Of particular relevance to this case are pars 22, 23 and 24 of the Guide. It is worth setting out these paragraphs in full.
22. What arrangements should be made when a witness statement is signed?
22.1 It is very important that time is spent with a witness going over a witness statement before it is signed. The statement is the evidence of the witness, not the lawyer. It can be frustrating for the lawyer if a witness wants to make alterations after further review of a draft statement especially if the changes are to key parts of the testimony. However, it is an important part of the process.
22.2 Every witness must be given an adequate opportunity to read and consider the contents of the statement. The witness should be asked whether there are any particular parts that the witness does not understand. In some cases it is advisable to read the statement out loud to the witness to provide the witness with the opportunity to hear what it says. This is important where a witness is more familiar with oral rather than written expression or has difficulty reading or concentrating. It is less effective to have a witness read the statement out loud because of the tendency to focus on the process of reading out loud rather than the content of the statement.
22.3 If it is not possible to deal with the witness in person then the witness should be clearly instructed to read the statement carefully to make sure its contents are correct. A statement should never be sent to a witness without giving the witness an opportunity to make corrections before the statement is signed.
22.4 Where the statement refers to documents then the witness should be shown the documents referred to in the statement and they should be identified in some way that removes any uncertainty as to the documents referred to by the witness. As stated elsewhere in this Guide that is most efficiently done by referring to documents in a bundle that has been prepared by the lawyers for the parties. However, if there is no bundle then the documents must be identified by some other means such as discovery numbers or by annexing a copy to the statement
22.5 The statement as signed should contain a verification at the end of the statement such as:
'I have read the contents of this my witness statement and the documents referred to in it and I am satisfied that it is correct and that this is the evidence-in-chief which I wish to give at the trial of the proceeding'.
23. Should a witness be shown the witness statement of another witness?
23.1 A witness should not be shown the written statement of another witness because:
• providing the witness statement of one witness to another is a means of facilitating collusion concerning the testimony of witnesses;
• providing the witness statement of one witness to another is likely to result in witness coaching by identifying matters with which the witness must agree or disagree;
• a witness does not need to know the evidence of another witness in order to give complete and accurate testimony as to the matters known to that witness;
• it is for the lawyer to identify the matters addressed in other witness statements about which a particular witness may be able to give evidence and for the lawyer to ask the witness proper questions to elicit the testimony that the witness is able to give without collusion or coaching;
• there may be an order for witnesses out of court at trial and the process of requiring witness statements is to facilitate the efficient conduct of the trial, not to otherwise alter the trial process by which the evidence of a witness may be tested.
24. How should a responsive statement deal with testimony in other statements?
24.1 A witness statement is not a pleading. It should never adopt the form of responding to particular paragraphs in other statements. The witness should not be told what is in other witness statements. It is the responsibility of the lawyer to identify topics relevant to the issues in the case that have been addressed in other witness statements and to elicit the testimony of the witness as to those topics and record the testimony in the statement. As explained elsewhere in this Guide, the testimony should be elicited by open questions that do not direct the witness to give a particular version of events.
24.2 A witness is not called to argue the case or dispute the evidence of other witnesses. A witness is called to give his or her own version of the relevant events. The written statement of the witness is simply recording the testimony of the witness. It may be testimony that is different to that recorded in the statements of other witnesses. Ultimately, that may be a matter for comment and submission by counsel. However, it is not the role or responsibility of a witness to argue for the witness's version of the events. Indeed, it is fundamentally inconsistent with the role of a witness for 'evidence' to take the form of a response to the evidence of others.
24.3 At trial, counsel will have an obligation to put an inconsistent version of the facts to a witness when cross examining the witness. However, the evidence in chief of a witness recorded in a statement is the testimony of the witness, preserved as much as possible from any process that will taint the independence of that testimony.
24.4 So, consider a case where one party serves a witness statement of Michael Olivera that says:
1. I met with Paul Smith at his house on 14 June 2006. Phil Jones was already there.
2. We talked about their business.
3. I asked Paul what the turnover was for the business and Paul told me that the turnover for the business had been over $1 million per year for the past 3 years.
4. I believed the statement about the turnover. It was very important to me when I was deciding to buy the business. It was one of the things I wrote on a list of factors that I prepared before I bought the business.
24.5 Paul Smith should not be shown the witness statement of Mr Olivera. He could be asked whether he recalls meeting with Mr Olivera at his house on 14 June 2006. If he recalls Mr Olivera being at his house he could be asked whether he discussed any aspect of the business at the time. He could be asked whether he ever discussed the turnover of the business with Mr Olivera at any time. After obtaining his answers to these inquiries his witness statement might state:
1. Michael Olivera came to my house in June 2006.1 can't remember the date.
2. I invited him for a social barbeque lunch to meet my then business partner Phil Jones because they were both from Canada and Michael had just migrated to Australia.
3. The barbeque was the only time Michael has ever been to my house. I did not discuss our business with Michael at the barbeque nor did Phil in my presence.
4. Some months later, in about September 2006 I gave Michael a document with the turnover figures for our business. I never discussed the document or the turnover figures with Michael at any time.
24.6 His witness statement should not state anything like:
'I refer to paragraphs 1 to 3 of the statement of Michael Olivera. I categorically deny those paragraphs'.
8. What should be done if witness statements are exchanged that are grossly deficient?
8.1 The usual order for witness statements requires statements to be filed of the evidence of a witness that may be ordered to stand as the evidence in chief of the witness. A document in which much of the material is irrelevant or objectionable does not comply with an order requiring such statements to be filed. In such cases, a considerable and unjust burden is placed upon the opposing party. Many objections must be taken and dealt with by conferral or ruling at considerable cost. The additional costs may be recovered if the opposing party is ultimately successful, but are otherwise unlikely to be recovered by a separate costs order. It is difficult to prepare responsive statements to grossly deficient witness statements. The alternative of allowing the objectionable material to stand gives rise to difficulties in determining how to approach cross-examination when the evidence-in-chief has not been given properly. Also, grossly deficient witness statements often reflect poor identification of the proper evidentiary issues making the task for the trial judge in adjudicating at trial and writing the judgment more difficult.
8.2 As to these issues, the High Court has said in one case:
A striking feature of the evidence at trial, and of the reasoning of the learned primary judge, is the attention that was given to largely irrelevant information...Written statements of evidence, no doubt prepared by lawyers, were received as evidence in chief. Those statements contained a deal of inadmissible material that was received without objection. The uncritical reception of inadmissible evidence, often in written form and prepared in advance of the hearing is to be strongly discouraged. It tends to distract attention from the real issues, give rise to pointless cross-examination and cause problems on appeal where it may be difficult to know the extent to which the inadmissible material influenced the judgment at first instance
8.3 Accordingly, instead of the opposing party being subjected to the costs and delay involved in preparing detailed objections and conferring concerning those objections (rather than working on its own case) the appropriate course is for the opposing party to seek an order for proper compliance with the order for witness statements. On such an application the court need not consider every objection that may be raised. Rather, a global assessment may be made as to whether the statements generally comply with the order. If they are grossly deficient then an order can be made for proper statements to be filed and the opposing party (and the court) is relieved of the considerable burden that would arise if the trial were to proceed on the basis of the deficient statements. Orders of this kind encourage proper preparation of statements. If such an application was successful it would be expected that the court would order that the costs of preparing the deficient witness statements could not be recovered.
8.4 If, as stated elsewhere in this Guide, a trial date is not sought or allocated until there had been proper compliance with witness statement orders then there would be the opportunity to seek orders requiring proper preparation of statements in appropriate cases. If grossly deficient witness statements are provided close to trial then it may be necessary for the court to proceed on oral evidence, rather than burden a party with the costs of laborious objection. An issue will then arise as to whether cost orders should reflect the inefficiency of having to proceed with oral evidence.
17 Even a cursory reading of the statement of Mr Blandin makes it clear there has been no attempt to comply with the Guide. The problems start with the very first paragraph. It reads as follows:
[Paragraph 3] In my dealings with APG:
1.1 I did not see APG provide any provide investor relation services
1.2 I did not see APG provide any short term loans
1.3 I did see APG use client lists to raise funds.
18 There are some paragraphs where some form of explanation is offered. One example of this is par 15. It is in the following terms:
[Paragraph 48] Did not take place. In the period February to June 2008 FTI funded itself through loan funds including an injection of loan funds by Geoff Kenny of $800,000 from a loan secured against his property. In May 2008 FTI conducted a raising at its head office in East Perth with Dr Edward Savarese present from the USA. Whilst McAleer attended this as did a lot of shareholders he was not involved with its organisation and was not based at Wickham Street. Funds continued to come in from this until July 2008.
19 The purported witness statement really has no redeeming features. It is difficult to see how anyone who has read the Guide could file such a document. It makes no attempt at a linear narrative. That really is the fundamental requirement of a witness statement. It must be possible to trace what a witness is saying from his identification and introduction through to the conclusion of the dealings relevant to the action. The omissions in this statement are so egregious that it cannot possibly be regarded as a document which complied with the order I made. That is the finding of fact that is crucial to the determination of this application. Having found as a fact there was a failure to comply with the order the plaintiff was entitled to judgment.
20 The judgment ordered in favour of the plaintiff will date from the publication of these reasons.
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