Barescape Pty Ltd v Bacchus Holdings Pty Ltd (No 8)
[2012] NSWSC 512
•16 May 2012
Supreme Court
New South Wales
Case Title: Barescape Pty Ltd & Anor v Bacchus Holdings Pty Ltd & Anor (No 8) Medium Neutral Citation: [2012] NSWSC 512 Hearing Date(s): 9-12 August, 15-18 August, 6-9 September 2011, 12-16 September 2011, 12 October 2011, 9 March 2012, 2-5 April 2012, 10-13 April 2012, 24 April 2012 Decision Date: 16 May 2012 Jurisdiction: Equity Division Before: Black J
Decision: PRACTICE AND PROCEDURE - Applications to tender documents in course of trial - Rulings on tenders.
Catchwords: Detailed rulings as to specific applications to tender documents. Parties to bring in Short Minutes of Order to give effect to judgment.
Legislation Cited: - Civil Procedure Act 2005 (NSW) - ss 56, 56-58, 56-59, 58(2)
- Evidence Act 1995 (NSW) ss 69, 79, 135, 136
- Uniform Civil Procedure Rules 2005 (NSW) Sch 7, rr 31.18, 31.23, 31.28, 31.28(1), 31.28(3), 31.28(4)Cases Cited: - Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 216 ALR 320
- Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509
- Beattie & Sutherland v Osman (No 3) [2009] NSWSC 824
- Dyldam Developments Pty Ltd v Jones [2008] NSWCA 56
- Hodder Rook & Associates Pty Ltd v Genworth Financial Mortgage Insurance Pty Ltd [2011] NSWCA 279
- Investmentsource v Knox St Apartments [2007] NSWSC 1128
- Lagerbar Balmain Pty Ltd v Riverview Hotel Balmain Pty Ltd [2006] NSWSC 1433
- Mobile Innovations Ltd v Vodafone Pacific Ltd [2003] NSWSC 309
- National Australia Bank Ltd v Rusu [1999] NSWSC 539; (1999) 47 NSWLR 309
- New South Wales Crime Commission v Trinh [2003] NSWSC 811
Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139
- State of New South Wales v Tyszyk [2008] NSWCA 107
- Wimpole v McIlwaith [1923] VLR 553
- Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290Texts Cited: Category: Interlocutory applications Parties: Barescape Pty Ltd atf The Vs Family Trust (First Plaintiff/First Cross-Defendant)
Anthony Ventura (Second Plaintiff/Second Cross-Defendant)
Midfielder Pty Ltd (Third Cross-Defendant)
Bacchus Holdings Pty Ltd atf The Bacchus Holdings Trust (First Defendant/Cross-Claimant)
Matthew Gordon Higgins (Second Defendant)Representation - Counsel: Counsel:
C. D. Wood (Plaintiffs/Cross-Defendants)
A. A. Henskens SC, N. E. Furlan (Defendants/Cross-Claimant)- Solicitors: Solicitors:
Anthony Ventura (Plaintiffs/Cross-Defendants)
Bilbie Dan (Defendants/Cross-Claimant)File number(s): 09/291437
Publication Restriction:
JUDGMENT
These proceedings were heard for 27 days before me, over an extended period between August 2011 and April 2012. Following the conclusion of evidence in the proceedings on 13 April 2012, the matter was listed before me to deal with several remaining issues as to the admissibility of documentary evidence which had arisen during the last week of the hearing. This judgment addresses those issues.
Admissibility of paragraph 36 of Mr Vella's 15 August report
The Cross-Claimant, Bacchus Holdings Pty Limited ("Bacchus") objected to paragraph 36 of the report dated 15 August 2011 of Mr Vella, the accounting expert called by the Cross-Defendants, Barescape Pty Limited, Anthony Ventura and Midfielder Pty Limited (to whom I will refer, for convenience, as "Barescape") on the basis that Mr Vella had no expertise in the comparison of market rents. That paragraph compares the rents provided in the leases for the Bacchus Restaurant and Longworth House, as the basis for a possible inference that the rent for the Bacchus Restaurant is concessional. The leases for the relevant restaurants are in evidence and I will admit the paragraph. I note that the weight to be given to the comparison is a matter for submissions.
Barescape's tender of Mr Carpenter's report
A report of David Carpenter of Cutcher & Neale has previously been tendered by Barescape and admitted in evidence, subject to a limitation under s 136 of the Evidence Act 1995 (NSW) that it is admitted as evidence of the report received for the purposes of the Sale Agreement (T109-111).
Barescape now seeks to tender Mr Carpenter's report on a wider basis. Bacchus contends that it has sought to call Mr Carpenter to give evidence to verify that report but Mr Carpenter is unavailable to give evidence through no fault on its part. Barescape issued a subpoena to give evidence to Mr Carpenter (Ex P60) which was initially made returnable on 6 September 2011 and then stood over to the recommencement of this hearing on 2 April 2012. On 20 March 2012, Mr Ventura advised Mr Carpenter that the proceedings were scheduled to resume in the week commencing 2 April 2012 and sought Mr Carpenter's availability to attend a conference (and if necessary to give evidence) during that week. Mr Carpenter responded on 21 March 2012 that he would be overseas that week and unable to attend the conference and that he was not back in the office until 23 April 2012. Bacchus criticises the adequacy of the steps taken to secure Mr Carpenter's compliance with the subpoena and there is some basis for that criticism.
However, there seem to me to be more fundamental difficulties with the tender of Mr Carpenter's report. First, there is no evidence before me as to Mr Carpenter's views, other than his report dated 17 December 2009, and in particular there is no evidence whether Mr Carpenter still holds the views in April 2012 that he expressed in that report or would wish to qualify those views in any way. Mr Carpenter has not, for example, given a proof of evidence or signed a witness statement which would indicate that, if called, he would adhere to the views expressed in that report.
Second, Mr Wood, who appears for Barescape, fairly accepts that Mr Carpenter's report would only be admissible on a wider basis as expert evidence within the meaning of s 79 of the Evidence Act and Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 31.18. However, Mr Carpenter was not provided with the Code of Conduct set out in Sch 7 of the UCPR and did not comply with that Code as required by UCPR r 31.23. Nor has Mr Carpenter subsequently been provided with the Code or acknowledged that he had in fact conducted himself in accordance with it. Mr Carpenter's report therefore has the same difficulties as the report rejected by McDougall J in Investmentsource v Knox St Apartments [2007] NSWSC 1128 at [50], where his Honour observed that:
"I have come to the conclusion that I should not "otherwise order" so as to admit into evidence so much of the [report] as expresses [the expert's] opinions. My reasons may be expressed briefly:
(1) [The expert] did not prepare his report with a conscious appreciation of the obligations imposed by Schedule K (which was applicable at the time it was prepared) or Schedule 7 (which is applicable now).
(2) There is a real difference between the role of an expert retained to advise a client and the role of an expert engaged to give evidence. The former owes his or her primary obligation to the client; the latter owes his or her primary obligation to the Court. It cannot be assumed that those obligations are identical, or that in any given case performance of them would lead to the same outcome in terms of opinion.
(3) For the reasons given by Einstein J in Cassegrain and Campbell J in United Rural Enterprises, there is a real risk that an expert who has not prepared a report under the discipline of the applicable schedule will form an opinion from which, thereafter, he or she would find it difficult to retreat, even if circumstances arise that might raise this as a possibility.
(4) An expert retained to advise a client is not usually confronted with alternative expert evidence. An expert retained to give evidence usually is. In the latter case, the expert's obligations under the applicable schedule require that he or she consider the alternative material, and reconsider his or her position in its light ..."
I do not consider that exceptional circumstances are established here such that the Court should grant leave for that report to be admitted under r 31.23 where Mr Carpenter has not acknowledged either that he read the Code or that he agreed to be bound by it.
Mr Carpenter's report was also not served in accordance with UCPR r 31.28. Rule 31.28(3) provides that, except by leave of the Court or by the parties' consent, an expert's report is not admissible unless it has been served in accordance with the rule. Rule 31.28(4) in turn provides that leave is not to be given unless the Court is satisfied that there are exceptional circumstances that warrant the grant of leave; or the report merely updates an earlier version of a report that has been served in accordance with r 31.28(1). Mr Carpenter's report is not an updating of any earlier expert evidence report. Nor, in my view, are "exceptional circumstances" established within the scope of r 31.28(4) and bearing in mind the statement of objectives of a Court in the management of litigation contained in ss 56-59 of the Civil Procedure Act 2005 (NSW): Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 at [66]-[67]; State of New South Wales v Tyszyk [2008] NSWCA 107.
Accordingly, I do not consider that Mr Carpenter's report dated 17 December 2009 should be admitted on any wider basis than it has previously been admitted in the proceedings. The result is that it has the status to which Palmer J referred in Lagerbar Balmain Pty Ltd v Riverview Hotel Balmain Pty Ltd [2006] NSWSC 1433, that it has been admitted as a report for the purposes of the private arrangement between the parties constituted by the Sale Agreement (as reflected in the current limiting order) but is not an expert's report for the purposes of s 79 of the Evidence Act.
Bacchus' tender of additional function documents
Bacchus seeks to tender a further volume of documents (which I have marked as "MFI 40") which were shown to a witness called by Barescape, Mrs Ventura, on 11 April 2012, the third last day of evidence in the proceedings. Barescape objects to the tender of several pages of that bundle which relate to functions held at Longworth House on the basis that the bundle was served during the last two weeks of the hearing without prior notice; the documents were not put to Mr Pelosi, a witness called by Barescape who had familiarity with functions held at Longworth House; and the lateness of service of the documents and their use in cross-examination at the end of the trial meant that there was no opportunity for Barescape to investigate or respond to the documents.
I should note that Bergin CJ in Eq had previously made directions on 16 February 2011 as to the service of Court Books by 3 August 2011; Bacchus had served one folder of documents on 5 August 2011 and Bacchus then served a further 13 folders of documents shortly before the recommencement of the hearing on 5 September 2011, which were subsequently reduced to a single volume of documents. I granted leave to Bacchus to tender that additional folder of documents for the reasons set out in my judgment delivered on 2 November 2011 ([2011] NSWSC 1307), primarily that Barescape would have sufficient time to address those documents prior to the recommencement of the hearing in April 2012 and that the documents were tendered in Bacchus' case in its Cross-Claim and Barescape was able to call evidence in response to them as of right.
In my view, Bacchus requires leave in order to tender the additional function documents contained in MFI 40, where these documents could readily have been included in the Court Books which were required to be served by 3 August 2011 or in the additional folder of documents which Bacchus was granted leave to tender in accordance with my judgment of 2 November 2011. In Beattie & Sutherland v Osman (No 3) [2009] NSWSC 824, White J observed that:
"[w]here a party has not complied with the order of service of evidence-in-chief, that party will often be precluded from relying upon evidence which is served late if the opposite party would thereby be prejudiced."
Although Bacchus points out that that case involved the tender of documents which were not available to the other party until late in the proceedings, his Honour's reference to prejudice is plainly not limited to that situation.
The question whether to grant leave to tender those documents is to be determined by reference to the principles indicated in ss 56-58 of the Civil Procedure Act. In determining whether to make any order for the management of proceedings, including any order of a procedural nature, and 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. The Court must have regard to the provisions of s 56 of the Civil Procedure Act, which identify the overriding purpose of the Act as to facilitate the just, quick and cheap resolution of the real issues in dispute in the proceedings. The Court may also have regard to other matters, which include the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction. In my view, the prejudice that Barescape suffers from the late tender of these documents is real. The orders for service of a Court Book made by the Court were intended, inter alia, to allow the parties to know the substance of the documentary evidence which would be relied on in the proceedings and to lead any necessary evidence in response and cross-examine as to that evidence. In this case, Bacchus was allowed an opportunity to supplement the evidence contained in the Court Book by tender of an additional folder of documents relating to functions in accordance with my earlier judgment.
In my view, the tender of further documents of this kind in cross-examination of Barescape's witnesses at the end of the proceedings deprives Barescape of the opportunity to investigate in an orderly way whether other evidence might be available to qualify or displace inferences which might otherwise be drawn from those documents and to lead any evidence of Mr Pelosi which might address those documents. In doing so, it is inconsistent with the need for "fundamental forensic fairness" in proceedings and for parties to be permitted to reach forensic decisions in an informed manner, to which Einstein J referred in Mobile Innovations Ltd v Vodafone Pacific Ltd [2003] NSWSC 309, in the context of considering potential prejudice arising from the late service of affidavits.
It is no answer to this prejudice that the documents originated with Mr Pelosi or relate to Longworth House, because Barescape was not required to engage in an exercise of anticipating what documents Bacchus had not included in the Court Books or the additional folder which it was granted leave to tender in late 2011 and prepare evidence against the contingency that those documents might be tendered in cross-examination in the closing stages of the hearing.
It is possible that the exclusion of these documents may affect Bacchus' ability to quantify damages in respect of particular functions, where other documents relating to the revenue derived by Longworth House may not have been discovered or produced on subpoena, and to that extent Barescape may be disadvantaged by the exclusion of these documents. However, s 58(2) of the Civil Procedure Act allows the Court to have regard to the use that any party has made, or could have made, of any opportunity that has been made available to it in the course of the proceedings, and in this case Bacchus has already had two opportunities to introduce function documents in evidence in the proceedings, initially in the Court Book and then in the further bundle of documents which I granted leave to tender in my judgment delivered on 2 November 2011.
I should add, for completeness, that Mr Henskens, who appears with Mr Furlan for Bacchus, contends that each party has tendered numerous documents in these proceedings which were not included in the Court Books. While that proposition is correct, no question as to whether leave should be granted to tender those documents arose where no objection was taken to them. The position in respect of the additional function documents included in MFI 40 is different, because Barescape does take objection to their tender on the basis of prejudice; because the prejudice arises from the inability to lead evidence which might qualify those documents to which I have referred above; and because that prejudice could have been avoided by including those documents in the Court Book or in the bundle of documents tendered pursuant to the leave which I granted in November 2011, rather than tendering them in cross-examination at the end of the hearing.
For these reasons, I do not grant leave to tender pages 15-17, 19, 22-23, 26-48, 152-159 and 175-205 of MFI 40. I would also have excluded these pages on the basis that their tender in this manner was unfairly prejudicial to Barescape under s 135 of the Evidence Act. There are several cases in which a party's failure to disclose or lead evidence in a timely way so as to enable the other party properly to consider and respond to it has been treated as warranting the exclusion of that evidence under s 135 of the Evidence Act: Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509 at [161]; Dyldam Developments Pty Ltd v Jones [2008] NSWCA 56.
I will otherwise mark MFI 40 as Exhibit "D98", noting that I have previously made limiting orders under s 136 of the Evidence Act on the application of Bacchus in respect of paragraph 1 at the bottom of page 110 and paragraphs 1 and 3 of page 116 of MFI 40.
Bacchus' tender of Later POS Records (MFI 44)
In my ex tempore judgment delivered on 13 April 2012 ([2012] NSWSC 384), I had rejected, inter alia on the basis of s 135 of the Evidence Act, the tender of 877 pages of documents extracted from the Bacchus Restaurant's current Point of Sale ("POS") system and covering the period 17 November 2009 to 27 June 2010 ("Later POS Records"), which Bacchus sought to tender in Mr Vella's cross-examination on the last day of evidence in the proceedings.
In that judgment, I noted an issue which had previously arisen in the proceedings in that Bacchus had not made available the Bacchus Restaurant's POS system for the period prior to 17 November 2009 in a form which was functional so as to allow information to be extracted from it. I also noted that the late tender of the Later POS Records would prevent Barescape from exploring their authenticity or admissibility as business records or completeness in an orderly way and that the conclusions to be drawn from those documents had not been the subject of expert evidence led by Bacchus. I noted that, in the circumstances of these proceedings, it was not possible to avoid that prejudice to Barescape by a further adjournment, which would impose further costs and delays on it (and the community) in circumstances that the costs of these proceedings was already likely to be significantly disproportionate to the amounts likely to be recoverable in them. I similarly ruled in respect of an application by Bacchus to tender extracts from the Later POS Records.
I have now heard further argument as to the tender of the Later POS Records, because the issue may ultimately be of importance to Bacchus' ability to establish some aspects of its damages case in the proceedings and the matter was dealt with under some time pressure by both Counsel and the Court when it was argued before me late in the afternoon of the last day of evidence in the proceedings. These matters suggest that it was open to Bacchus to make a further application to tender the relevant documents: Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139 at [71]-[72], [122]-[124]. Bacchus also contends that the Court proceeded on two bases which were incorrect and that, if established, would also warrant the reconsideration of this application. I will deal with Bacchus' submissions as to those matters below.
Bacchus' first submission is that the Court was in error in proceeding on 13 April 2012 on the basis that there was no evidence as to the authenticity of the POS documents and it would be unfair to the Plaintiffs to deal with their authenticity at the conclusion of the hearing, and Bacchus refers to evidence which it contends establishes the authenticity of the POS records. The observation which I made in paragraph [5] of my judgment delivered on 13 April 2012 was as follows:
"It appears that copies of these records for the later period, which originate with the Bacchus Restaurant, were provided by the Cross-Defendants to Mr Vella to allow him to undertake analysis based upon them. These documents may well be authentic and they may well be business records, but both of those matters are matters which the Cross-Defendants would be entitled to explore in an orderly way. I have no doubt that it would be unfairly prejudicial to the Cross-Defendants, for the purposes of s 135 of the Evidence Act, to place them in a position where, on the last day of evidence in the hearing, 877 pages of POS records for the later part of the relevant period are tendered without either Bacchus Holdings leading evidence of authenticity or the manner in which they have been prepared and without the conclusions sought to be drawn from these documents having been dealt with in the expert evidence led by Bacchus Holdings so as to allow counsel for the Cross-Defendants to cross-examine that expert witness. Mr Wood puts, and I accept, that he could not deal with this information in the circumstances that it is now tendered."
My observation as to the lack of evidence of authenticity of the Later POS Records requires qualification, since Bacchus draws attention to matters which it contends are evidence which support the authenticity of those records, as follows:
·Bacchus relies on evidence of its solicitor, Mr Faraday-Bensley as to steps which he requested a member of the restaurant staff, Ms Moore, to take to produce the Later POS Records. In my view, Mr Faraday-Bensley's evidence is sufficient to establish that the 877 pages of Later POS Records were produced from the current POS system and were delivered to Mr Vella and Mr Ventura.
·Bacchus relies on Mr Ventura's evidence that POS records generally were "produced in the ordinary course of the operation of the business" and were "the primary records of income for the restaurant". However, that evidence was led by Mr Ventura in respect of the POS records which were prepared when the restaurant was under his management, not in respect of the Later POS Records.
·Bacchus also relies on answers given by Mr Vella, the accounting expert retained by Barescape, during cross-examination on 13 April 2012. However, Mr Vella's evidence went no further than to indicate that he did not recall Mr Ventura suggesting that POS data was inaccurate. That evidence is not surprising, where Mr Ventura had vigorously pressed for production of the earlier POS data, which he had been unable to access from the earlier POS system which had been decommissioned by Bacchus, and had no basis to express any view as to the accuracy of the Later POS Records which had been produced from a system installed after the termination of his engagement with the restaurant.
I need not repeat the relevant principles as to the proof of authenticity generally, to which I had referred in my earlier judgment in these proceedings delivered on 2 November 2011 ([2011] NSWSC 1307): see also National Australia Bank Ltd v Rusu [1999] NSWSC 539; (1999) 47 NSWLR 309 at [26]; New South Wales Crime Commission v Trinh [2003] NSWSC 811 at [14], Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 216 ALR 320 at [116]-[119]. In my view, Mr Faraday-Bensley's evidence is sufficient to establish the authenticity of the Later POS Records, in the sense that they were produced by the current POS system, noting that authenticity is distinct from accuracy as is noted in these cases and my 2 November 2011 judgment.
However, in ASIC v Rich, Austin J also noted that, once a document was authenticated so as to give rise to the inference that it was what a party claimed it to be:
"[I]t is open to the defendants to show that they have no probative value ... [b]ut the law does not overload the authenticity requirement by including within it an obligation for the tendering party to rebut all such possibilities. Issues going to the ultimate probative value of the documents cannot be assessed at the present stage. They do not bear on authentication."
His Honour's observation points to the fact that documents, once their authenticity is established and they are admitted, may call for a response from the other party.
The tender of the Later POS Records on the last day of evidence in the proceedings, during the cross-examination of Mr Vella, deprived Barescape of the opportunity to, for example, lead evidence from Mr Ventura about them to qualify the inferences which might be drawn from them; cross-examine Ms Moore, who was the person within Bacchus Restaurant who was responsible for maintenance of the POS system, about them; or cross-examine the expert accounting witness called by Bacchus, Mr Jugmans, as to the inferences which might be drawn from them, particularly so far as Bacchus may seek to argue that POS records produced over a limited period support a calculation as to Bacchus Restaurant's revenues over a wider period. Those were the steps which, in ASIC v Rich, Austin J contemplated that a defendant might take in respect of the tender of such documents.
I therefore maintain my rejection of the Later POS Records under s 135 of the Evidence Act.
Tender of volume 1 of Mr Vella's working papers
Bacchus also sought to tender three folders of working papers of Mr Vella during his cross-examination, and that question was reserved for further argument. In his report dated 5 July 2011, Mr Vella refers to having assembled three folders of working papers containing supporting documents from which information summarised in the tables and schedules forming part of his report are drawn and notes that those documents are not part of his report but that copies of them have been made available to the accounting expert retained by Bacchus, Mr Jugmans.
The documents contained in volume 1 of Mr Vella's working papers relate to various matters. Barescape has tendered some documents contained in volume 1 of Mr Vella's working papers (Tabs A, D and PQ) but objects to the tender of the balance of volume 1 of those working papers by Bacchus. Bacchus contends that it is not in the interests of justice to permit selective tender by Barescape from the same "group" of documents and refers to the decision in Wimpole v McIlwaith [1923] VLR 553 for that proposition. I do not accept that submission. The documents contained in volume 1 of Mr Vella's working papers are not a group of documents of the same kind, but a bundle of various documents relating to various matters, and whether they are properly admissible depends on the particular documents. The fact that Barescape has tendered some parts of Mr Vella's working papers dealing with discrete matters does not mean that the Court will be misled if other documents contained in Mr Vella's working papers which are not properly admissible are not admitted. Accordingly, in my view, the question whether Bacchus is entitled to tender the balance of volume 1 of Mr Vella's working papers depends upon whether the particular parts of that volume are properly admissible.
Tab B of volume 1 of Mr Vella's working papers contains MYOB profit and loss records of Bacchus Restaurant. Mr Vella refers to these records in paragraphs 30-31 of his report, where he notes that the MYOB data provided to Mr Jugmans was different from the MYOB data provided to him and the balance sheet derived from the MOYB data was in turn different from that produced by SiDCOR, the accountant for Bacchus. There have been significant issues as to the accuracy of MYOB data for the Bacchus Restaurant in these proceedings, which have been addressed by evidence as to the origin of particular versions of that data to which I referred in my judgment delivered on 2 November 2011.
In my view, it would be unfairly prejudicial and misleading for the purposes of s 135 of the Evidence Act to now admit other versions of the MOYB data which were reviewed by Mr Vella for the purpose of identifying the discrepancies in the data. I would also not grant leave to tender that data so far as it was not contained in the Court Books filed in accordance with the directions of Bergin CJ in Eq or in the further volume of material which was tendered by Bacchus and considered in my judgment dated 2 November 2011 (which included some MYOB material) for the reasons noted above in respect of function documents.
Tab C of volume 1 of Mr Vella's working papers are documents which were printed by Mr Ventura from Bacchus Restaurant's earlier POS system on 23 October 2009 and are exhibited to an affidavit previously sworn by Mr Ventura in the proceedings. These documents appear to have been derived from the POS system maintained during the period in which Mr Ventura was general manager of the Bacchus Restaurant; no issue as to their authenticity has been raised in the proceedings, and Mr Ventura has given evidence as to the fact that the data contained in the earlier POS system was prepared in the ordinary course of the restaurant's business and were its primary income records; the documents are plainly business records of the Bacchus Restaurant for the purposes of s 69 of the Evidence Act and I can see no prejudice to Barescape from admitting those documents for the purposes of s 135 of the Evidence Act. Accordingly, I admit the documents which are contained in Tab C to volume 1 of Mr Vella's working papers, which I mark Exhibit "D99".
Tab E and Tab L of volume 1 of Mr Vella's working papers are further MOYB records of the Bacchus Restaurant and I would not grant leave for the tender of these documents for the reasons noted above in respect of the documents contained in Tab B of volume 1 of Mr Vella's working papers and those documents would otherwise be excluded under s 135 of the Evidence Act for the same reasons.
Tab F of volume 1 of Mr Vella's working papers is a bundle of invoices which is also attached to Mr Ventura's affidavit dated 22 July 2010. I admit those documents which I mark Exhibit "D100". The documents contained in Tab G of volume 1 of Mr Vella's working papers have also already been admitted in evidence and it is not necessary or appropriate that they be admitted again.
Tabs H, I and N-O of Mr Vella's report are POS reports of the Bacchus Restaurant of the same character as volumes 2-3 of the working papers to Mr Vella's report and I consider that they should be admitted for the reasons set out below. I mark those documents Exhibit "D101".
Tab R in volume 1 of Mr Vella's working papers are function pricing documents in respect of Longworth House and Bacchus Restaurant which were provided to Mr Vella for the purposes of his determining the costs of hosting functions at Bacchus Restaurant; some appear to have been provided by Mr Ventura and others produced on discovery. To the extent that these documents were not already included in the Court Book or the additional volume of documents considered in my judgment delivered on 2 November 2011, I would not grant leave to tender them and those documents would otherwise be excluded under s 135 of the Evidence Act for the reasons noted above in respect of function documents.
Tender of Volumes 2 and 3 of Mr Vella's working papers
The documents in volumes 2 and 3 of Mr Vella's working papers relate to an analysis of takings of Bacchus Restaurant on Friday and Saturday nights and are identical or substantially identical with the Later POS Records to which I have referred above. However, the tender of volumes 2 and 3 of Mr Vella's working papers raises somewhat different issues from the application to tender the Later POS Records in the manner which I considered in my judgment delivered on 13 April 2012, and I had reserved that question for further argument which took place on 24 April 2012. That difference is potentially significant because, to the extent these documents were included in Mr Vella's working papers and relied on for conclusions expressed in his report, there can be no question of Barescape being caught by surprise by their nature.
Part F of Mr Vella's report dated 5 July 2011 (which I admitted into evidence subject to a limitation under s 136 of the Evidence Act that it does not prove the assumptions made in it or the instructions provided to the expert, in my judgment of 13 April 2012) deals with the question of takings at Bacchus Restaurant for each Friday and Saturday night from 1 July 2008 to date. Mr Vella there noted that the Later POS Records were only available to him for the period 17 November 2009 to 26 June 2010, which is the period included in the working papers to his report. He set out a summary of daily takings shown in the POS journal report for each Friday and Saturday in that period. He noted that detailed POS reports were not available for the remaining periods from 1 July 2008 to 16 November 2009 and 27 June 2010 to date, a matter to which I will return below. Mr Vella's 5 July 2011 report was in turn dealt with in a joint expert's report of the accounting expert retained by Bacchus, Mr Jugmans, and Mr Vella which has been admitted as Ex D86.
I have noted above that Mr Faraday-Bensley's evidence is sufficient to establish the authenticity (as distinct from reliability) of these documents. In my view, the question whether it would be unfairly prejudicial to the Cross-Defendants, for the purposes of s 135 of the Evidence Act, presents differently in respect of the copies of these documents contained in the working papers to Mr Vella's report than in respect of the Later POS Records sought to be tendered on the last day of the hearing, even though the documents may be identical or substantially identical. As Bacchus points out:
·Bergin CJ in Eq made orders on 11 May 2011 requiring Bacchus, inter alia, to provide to Mr Vella from the POS system "reports of daily takings, including a summary of each transaction ... from 15 September 2009 to 7 July 2010".
·Bacchus thereafter took steps to do so and the later information was delivered to Mr Vella on 18 May 2011 and to Mr Ventura on 19 May 2011.
·That information was then relied upon by Mr Vella to produce his July 2011 expert report, which contained a summary of daily takings for the period 17 November 2009 to 26 June 2010, being the period for which, he stated, "POS records are available". Mr Vella's analysis was in turn adopted in the joint experts' report ordered by the Court.
In my view, the fact that this information has been available in this form to Mr Vella since 18 May 2011 and to Mr Ventura since 19 May 2011 means that Barescape has had the opportunity to investigate any questions as to the inferences to be drawn from the information in this form and to assemble any evidence which was necessary to qualify or expand upon the inferences which could be drawn from this information, to the extent that Barescape might wish to contend for a different position from that set out in Mr Vella's report.
I do not (as I noted in my judgment dated 13 April 2012), accept Bacchus' submission that it was entitled to proceed on the basis that the whole of Mr Vella's report would be read. At the same time, Barescape was also not entitled to proceed on the assumption that working papers to Mr Vella's report could not be tendered by Bacchus in the proceedings. Indeed, Barescape has not contended before me that it in fact proceeded on that assumption, and Bacchus' counsel had foreshadowed the possibility that evidence of Mr Vella might be tendered in cross-examination even if parts of his report were not read in submissions on 5 April 2012 (T618). There is also a degree of inconsistency between Barescape's conduct in relying on Mr Vella's report, which in turn relied on the information contained in its working papers, and now contending that it is prejudiced by Bacchus' reliance on that part of Mr Vella's report and the working papers which support it: compare Hodder Rook & Associates Pty Ltd v Genworth Financial Mortgage Insurance Pty Ltd [2011] NSWCA 279 at [53]-[55].
There are two remaining difficulties as to Bacchus' reliance on volumes 2-3 of the working papers to Mr Vella's report. The first, as I noted in my judgment of 13 April 2012, is that the earlier POS system covering the period prior to 17 November 2009 has been discontinued and, although the hardware has been retained, it was not functional so as to allow Barescape to access information contained in it. Bacchus contends that the availability of information from the old POS system has "nothing to do" with the tender of volumes 2-3 of Mr Vella's working papers. While I do not accept that submission in that form, I do accept that any difficulty suffered by Barescape by reason of that matter is mitigated to some extent by the fact that Mr Ventura printed reports from the old POS system on 23 September and 23 October 2009, although Barescape contends that the information available to it is still incomplete.
In any event, I am not satisfied that any question as to the availability of data for the earlier period prior to 17 November 2009 or for the period after June 2010 will render reliance on the information contained in volumes 2-3 of Mr Vella's working papers either unfairly prejudicial to Barescape or misleading or confusing for the purposes of s 135 of the Evidence Act. So far as Barescape (as it has foreshadowed) may seek to rely on an average derived from the narrower period covered by the Later POS Records (in the form contained in volumes 2-3 of Mr Vella's working papers) to support a calculation for damages over the wider period, the Court will be able to have regard to the absence of relevant information for the earlier periods in assessing the weight to be given to such a calculation.
I therefore do not consider that a basis for discretionary exclusion of volumes 2-3 of the working papers to Mr Vella's report is established under s 135 of the Evidence Act. For these reasons, I would admit volumes 2-3 of Mr Vella's working papers, which will be marked Exhibit "D102".
Re-tender of Later POS Records
Bacchus also applies for leave to re-tender the 877 pages of the Later POS Records sought to be tendered in Mr Vella's cross-examination (MFI 44) if Mr Vella's working papers are tendered on the basis that the submissions put to the Court on 13 April 2012 did not fully set out the matters to which I have referred above. I would not grant leave to re-tender MFI 44. To the extent that that document duplicates Mr Vella's working papers, there is no need for it to be tendered twice. To the extent that it differs from Mr Vella's working papers, my finding that those working papers may be tendered depends upon matters which are specific to their use in Mr Vella's report and the joint report, which are not applicable in respect of MFI 44 which was not used in that manner.
Orders and costs
I direct the parties to bring in Short Minutes of Order to give effect to this judgment within 7 days. I will hear the parties as to costs.
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