Azmin Firoz Daya v CX Reinsurance Company Limited

[2012] NSWSC 1294

Supreme Court

New South Wales

Medium Neutral Citation:	Azmin Firoz Daya v CX Reinsurance Company Limited [2012] NSWSC 1294
Hearing dates:	15 October 2012
Decision date:	15 October 2012
Jurisdiction:	Equity Division - Commercial List
Before:	Brereton J
Decision:	Objection to evidence by Messrs Peck and Murray overruled; Defendants to serve statements of evidence by 19 October 2012; Defendants to pay Plaintiff's costs of motion
Catchwords:	EVIDENCE - whether late notice of intention to adduce evidence of certain witnesses would cause prejudice to plaintiff - whether evidence ought to be excluded
Category:	Interlocutory applications
Parties:	Azmin Firoz Daya - Plaintiff CX Reinsurance Company Ltd (formerly CNA Reinsurance Ltd) - First Defendant GE Frankona Reinsurance Ltd (formerly Eagle Star Reinsurance Company Ltd) - Second Defendant Aviva Plc (formerly General Accident Fire & Life Assurance Corp plc) - Third Defendant Certain Underwriters at Lloyds (Contract No ENCDOPR98) - Fourth Defendant Royal & Sun Alliance plc - Fifth Defendant Certain Underwriters at Lloyds (Contract No ENCDOX598) - Sixth Defendant International Insurance Company of Hannover Ltd - Seventh Defendant
Representation:	Counsel: Dr Bell SC w Mr J Williams - Plaintiff Mr J Sexton SC w Mr E Muston & Ms S Callan - First to Sixth Defendants Solicitors: Sparke Helmore - Plaintiff HWL Ebsworth - First to Sixth Defendants
File Number(s):	2004/ 175282

Judgment (ex tempore)

1. HIS HONOUR: On 21 February 2011 Barrett J, as his Honour then was, made a direction in these proceedings that the defendants serve all evidence on which they intended to rely by 21 March 2011, and serve all documents on which they presently intended to rely by 28 March 2011. The defendants were not able to serve all statements and reports by 21 March, and on 1 March 2011 informed the plaintiffs' solicitors that they expected to be in a position to serve all completed reports by 27 March 2011, and would serve the statements and reports "as soon as they become available to us". It seems that in any event, service of the defendants' witness statements was completed on 30 March 2011.

1. In order to facilitate making rulings on objections prior to the commencement of the hearing of the proceedings in London on 20 November, I made directions on 26 September 2012, to the effect that each party notify the other of the evidence that they intended to adduce at the hearing, and that the notified parties serve notices of objections in respect of any part of that evidence to which objection would be taken. By letter dated 5 October 2012, the defendants' solicitors notified the plaintiffs' solicitors that they intended to rely on affidavits or statements of five lay witnesses and four expert witnesses, and on ten volumes of a tender bundle. The five lay witnesses included Mr Ghose, Mr Murray and Mr Peck. No statement or affidavit of any of those witnesses had been served, pursuant to Barrett J's directions, by 30 March 2011.

1. So far as Mr Peck was concerned, the first indication given by the insurers that they would seek to rely on his evidence was in a letter dated 20 September 2012, to which protest was very promptly taken. A further indication of an intention to seek to adduce evidence from Mr Peck was given on 30 August, and two further affidavits of Mr Peck sworn in other proceedings were served on 26 September 2012. To some considerable extent, the scope of the evidence to be adduced from him was limited, by letter of 5 October 2012, to specified paragraphs of those affidavits.

1. So far as Mr Ghose is concerned, following settlement of proceedings against him, the insurers, on 15 June 2012, raised the possibility of relying on an affidavit that he had sworn in the Ingot proceedings. Objection was promptly taken to that course. The 5 October letter specified some 42 paragraphs of Mr Ghose's affidavit, which was served under cover of that letter, as being relied on.

1. So far as Mr Murray is concerned, the 5 October letter was the first indication of any intention on the part of insurers to adduce in these proceedings evidence from him.

1. In those circumstances, the plaintiff objects to the defendants being permitted to adduce evidence from those three witnesses.

1. In the course of the hearing of the application, counsel for the defendants has indicated that it is unlikely in the extreme that Mr Ghose will in fact be called, and, in those circumstances, I do not propose to take time to deal further with the objection in his case. If an attempt is ultimately made to call him, any such objection can be dealt with then, and, given the indication that has been given, the passage of time would only increase any prejudice that the plaintiffs would be able to invoke in that respect.

1. So far as Mr Murray and Mr Peck are concerned, in the course of the hearing of the application, counsel for the defendants has further narrowed the scope of the evidence that would be adduced from each of them, as follows. In respect of Mr Peck, evidence would be adduced from him only as to, first, a board meeting held on 13 July 1998 in connection with the "big stop loss" and, secondly, the events, or non events, of a meeting in Sydney on 12 January 1999. So far as Mr Murray is concerned, evidence would be adduced from him only as to, first, that he was not told about the second leg of the so-called "small stop loss" and, secondly, also of the events of the 12 January 1999 Sydney meeting.

1. The analysis of the course of the proceedings undertaken in the plaintiffs' submissions presents a strong case that notice of the intention to rely on this evidence should have been given earlier than it was. Against that, it also needs to be borne in mind that these proceedings have a changing landscape. Counsel for the insurers says that it was anticipated that Mr Murray would be called by the liquidator as a witness for the liquidator, and that the necessity for the insurers to consider calling him arises largely as a result of the settlement of the proceedings between insurers and the liquidator. He also says, in respect of Mr Peck, that it was anticipated that he would, obviously enough, be a witness in his own case and in his cross-claim against the insurers, and that the necessity to consider calling him in the insurers' case arises largely as a result of the recent settlement of the proceedings between the insurers and Mr Peck.

1. That is not the full picture, however, because once it was conceded by the insurers that an order would not be made that evidence in the Daya proceedings be evidence in the Peck proceedings, and vice versa, it at least then became necessary to consider how Mr Peck's evidence would be dealt with if required in the Daya proceedings, and, as plaintiffs' counsel points out, the default position following Austin J's earlier judgment was that there would be separate trials, and not a joint trial. It is for that reason that there is not inconsiderable force in the plaintiffs' argument that this issue ought to have been addressed earlier. On the other hand, the changing landscape of the litigation does explain, at least to some extent, why this issue has arisen when it has.

1. It is, of course, even in criminal proceedings, far from unknown for a co-accused to enter into an arrangement with the Crown, even at a late stage before a trial, and end up being called as a Crown witness. The analogy is not entirely inapt, because of the allegation of fraud in this case, which highlights the sensitivity of the Court to questions of procedural fairness, but in criminal proceedings, if anything, that sensitivity is even higher.

1. Realistically, what must concern the Court is not whether notice of intention to adduce this evidence from Mr Murray and Mr Peck could or should have been given much earlier, but whether now permitting the evidence in the narrow scope which has been described would occasion irremediable prejudice to Mr Daya. So far as Mr Murray is concerned, it is not suggested that he should give evidence in London. So far as Mr Peck is concerned, he is not compellable in Australia, and would only be compellable in England. It is far from clear that, having been in strong dispute with the insurers, at least until recently, he would readily accede to a request to assist them by giving evidence in Australia, although it is not beyond the scope of possibility that the terms of settlement might oblige him to do so; of that, there is no evidence. That said, it seems to me almost inconceivable that if the court is going to take evidence in London, and if, within the time which has been set aside for that purpose, Mr Peck's evidence could be dealt with, that the court would not deal with it there.

1. Ultimately, given the narrow scope of the evidence now to be adduced from Mr Peck and Mr Murray, I am not persuaded that it is beyond the ability of the not inconsiderable, if lesser, resources on Mr Daya's side of the courtroom to be in a position to cross-examine Mr Peck in six weeks' time. I appreciate that the extent of the cross-examination may be much broader than the narrow topics on which it is proposed he give evidence-in-chief, but it seems to me that the narrow scope of his evidence-in-chief, coupled with the time available before he will give evidence, means that it cannot be concluded that unacceptable prejudice would be occasioned to Mr Daya by permitting him to give evidence to that extent.

1. The same considerations apply, a fortiori, in respect of Mr Murray, who would give evidence, if at all, later, after the court has returned to Australia.

1. For those reasons, I would not at this stage uphold an objection to Mr Peck being called to give evidence in London as to the two matters that I have identified, nor to Mr Murray being called in Australia on the two matters identified in respect of him. However, it seems to me it is highly desirable that the reduction of the scope of that evidence described in court today be formalised, and for that purpose the defendants should serve a statement setting out the evidence they anticipate Mr Peck and Mr Murray will give in respect of those two topics. That statement should be served by midday on 19 October 2012.

1. The defendants should pay the plaintiff's costs of today.

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Decision last updated: 13 May 2013