Barescape Pty Ltd (as trustee for the Vs Family Trust) v Bacchus Holdings Pty Ltd as trustee for the Bacchus Holdings Trust

[2011] NSWSC 437

Supreme Court

New South Wales

Medium Neutral Citation:	Barescape Pty Ltd (as trustee for the Vs Family Trust) and Anor v Bacchus Holdings Pty Ltd as trustee for the Bacchus Holdings Trust and Anor [2011] NSWSC 437
Hearing dates:	11 May 2011
Decision date:	11 May 2011
Jurisdiction:	Equity Division - Corporations List
Before:	Bergin CJ in Eq
Decision:	Cross-examination permitted
Catchwords:	[Practice and Procedure] - Whether party who has filed five verified Lists of Documents and agreed to file a sixth verified List of Documents may be cross-examined - impact of s 56 of the Civil Procedure Act 2005
Legislation Cited:	Civil Procedure Act 2005 Civil Procedure Rules 2005
Cases Cited:	Con Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 1200 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37
Category:	Interlocutory applications
Parties:	Barescape Pty Ltd as trustee for the Vs Family Trust (first plaintiff) Anthony Ventura (second plaintiff) Bacchus Holdings Pty Ltd as trustee for the Bacchus Holdings Trust (first defendant) Matthew Gordon Higgins (second defendant)
Representation:	CD Wood (plaintiffs) A Henskens/N Furlan (defendants) Anthony Ventura (plaintiffs) Bilbie Dan (defendants)
File Number(s):	2009/00291437

Judgment - ex tempore

1. This is an application brought by the plaintiffs for leave to cross-examine the second defendant in respect of the discovery process. It is common ground that the defendants have filed five Lists of Documents so far and have agreed to file a sixth List of Documents.

1. The parties were in a partnership that operated a restaurant in Newcastle. The litigation relates to the break up of that partnership. The operation of the restaurant has changed since the break up and bookings are no longer taken in hard copy but on a computer system. The plaintiffs have been pressing the defendants for some time for discovery of both the hard copy documents and the computer generated documents in relation to the operation of the restaurant. On one view of the evidence, it is the plaintiffs' tenacity that has caused the defendants to produce the five verified Lists of Documents to date and no doubt the agreement to produce the sixth List.

1. An imperative in this application is the expert's report that is due by 31 May 2011. The trial is listed before me on 9 August 2011 for eight days and it is thought that the expert will need to assist me in some aspects of the case relating to valuation and the like.

1. Mr Henskens, leading Mr Furlan for the defendants, submitted that because agreement has been reached to produce a further verified List of Documents the application is premature. It was submitted that the application should await the production of that further List. It was also submitted that it would be a most exceptional order to be made in this litigation.

1. Mr C D Wood, for the plaintiff, has relied in support of the application upon Con Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 1200, a case in which after reviewing the relevant authorities as to whether the court should allow cross-examination as part of its determination on the adequacy of discovery (at [36]- [41]), Garling J said:

[42] For my part, particularly in light of the provisions of s 56 of the Civil Procedure Act 2005 and the extensive use of the modern tools of case management to ensure that the real issues in dispute are addressed in a cost effective manner, I share in the disquiet of Giles J. I see no compelling reason to accord to an affidavit verifying a list of documents by way of discovery any special status. Proper compliance with a party's obligations of discovery under the overall supervision of the court is an important and necessary part of modern litigation. The court has the capacity to limit discovery, or control the process of giving discovery, so that it does not become unduly onerous.

[43] That said, it is appropriate in determining this application that I pay regard to the existing authorities.

1. The "disquiet" Garling J was referring to was Giles J's (as his Honour then was) reference in Fruehauf Finance Corporation Pty Ltd v Zurich Australian Insurance Ltd (1990) 20 NSWLR 359 at 366-367 as to whether the "old Chancery aversion to a 'conflict of affidavits'" was a proper justification for limiting the investigation with which the matter before him was concerned.

1. One factor that needs consideration in these more modern times of judicial case management is the impact of the Civil Procedure Act 2005 (the Act) and the Uniform Civil Procedure Rules 2005 (the Rules). There is now a statutory duty imposed upon the courts by s 56(2) of the Act which "requires the Court in mandatory terms - "must seek" - to give effect to the overriding purpose - to "facilitate the just, quick and cheap resolution of the real issues in the proceedings" - when exercising any power under the Act or Rules": Dennis v Australian Broadcasting Corporation [2008] NSWCA 37, at [29] per Spigelman CJ, with whom Basten and Campbell JJA agreed. Additionally each party owes a statutory 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": s 56(3). Each solicitor and barrister owes a statutory duty to the Court not to cause their clients to be in breach of their duties to the Court: s 56(4).

1. By reason of the imposition of this mandatory obligation, the Court can approach this application slightly differently to the way in which it may have been approached in the past. There will be circumstances where "conclusiveness" of affidavits of discovery must yield to the overriding purpose of the Act and Rules. I do not see this as an exceptional order. Six attempts at proper discovery suggest there has been a problem. Finality in the discovery process is necessary to ensure that further costs are not incurred, particularly the costs of the expert.

1. I am satisfied on balance that it is appropriate, cost efficient and consistent with the overriding purpose of the Act and Rules to allow the plaintiffs to cross-examine the second defendant in relation to the nature of the documents that are to be available for discovery for the purposes of providing instructions to the expert.

1. Accordingly, I grant leave to the plaintiffs to cross-examine the second defendant.

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Decision last updated: 16 May 2011