Colin Lindsay Taggert v John Matyear

[2013] NSWSC 278

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Prismex Technologies Pty Limited; Colin Lindsay Taggert v John Matyear [2013] NSWSC 278
Hearing dates:	5 February 2013
Decision date:	05 February 2013
Jurisdiction:	Equity Division - Corporations List
Before:	Brereton J
Decision:	Affidavit in question does not unfairly prejudice the applicants and is read into evidence
Catchwords:	EVIDENCE - affidavits and statutory declarations - affidavits - whether late service of affidavit creates unfair prejudice EVIDENCE - affidavits and statutory declarations - affidavits - whether statements contained in affidavit constitute hearsay EVIDENCE - affidavits and statutory declarations - affidavits - whether partial redaction of exhibit to affidavit renders it inadmissible
Category:	Procedural and other rulings
Parties:	2006/ 258477 John Matyear (First Applicant) Metage Pty Ltd (Second Applicant) Prismex Technologies Pty Ltd (First Respondent) Mendela Pty Ltd (Second Respondent) X-Position Pty Ltd (Third Respondent) 2012/ 311698 Taggart, Colin Lindsay (First Plaintiff) Mendela Pty Ltd (Second Plaintiff) X-Position Pty Ltd (Third Plaintiff) Matyear, John (First Defendant) Metage Pty Ltd (Second Defendant)
Representation:	Counsel: 2006/ 258477 Ms J E Richards (Applicants) Mr M Ashhurst SC (Respondents) Solicitors: 2006/ 258477 Farrar Lawyers (Applicants) Cornwall Stodart (Respondents)
File Number(s):	2006/ 258477 2012/ 311698

Judgment (ex tempore)

1. HIS HONOUR: Objection was taken to paragraph 49(c)(D) of Mr Farrar's first affidavit sworn 13 December 2012, in which he deposed as follows:

The statement by Taggert that "the most favourable outcome Metage might have expected to achieve in [the Original Proceedings] was an order for payment to if of the sum of $373,054.59 is not evidence, it is a submission. To the extent that the court permits the statement to be read as evidence I say it ignores ...(D) the substantial costs that were incurred by the creditors in pursuing their claims for relief in the Original Proceedings. The total legal costs and disbursements for relief in the Original Proceedings exceeded $300,000. The Terms (sic), and subsequent orders, were inclusive of costs and this was factored into the judgement amount of $700,000.

1. The relevance of this assertion is that the applicants contend that the amount of the final judgment in the ultimate settlement substantially exceeded the most favourable outcome that the plaintiffs might have expected to achieve in the Original Proceedings, it being said that the most favourable outcome that might be expected was $373,000 approximately, whereas the final judgment was for $700,000. This underlies the applicants' contention that the sum of $700,000 amounted to a penalty.

1. I rejected that sub-paragraph because it was bad in form, in particular, that the second sentence of sub-paragraph (D) appeared to be necessarily secondary evidence of documents.

1. The respondents now read an affidavit sworn by Mr Farrar on 31 January 2013, to which he exhibits various invoices and fee notes rendered in connection with the so-called Original Proceedings, together with a schedule, the effect of which is to indicate that they total in excess of $300,000. Objection is taken to this affidavit on the basis that it is served late, contains a hearsay statement, and that invoices exhibited to it have been partially redacted.

1. As to the redaction, I have on many occasions indicated that those who redact documents produced pursuant to a notice or tendered as evidence, without the leave of the court embark on a perilous course. Redaction except where made as a matter of a claim of privilege is not a matter of right, but something permitted only with the court's leave.

1. That said, in this case, what has been redacted can only operate to the disadvantage of the respondents, in that the matters redacted are not included in their total claim for costs. If matters have been incorrectly redacted, that can operate only to the respondents' detriment. Nor has any application been made since the affidavit was sworn on 31 January, for production of unredacted documents.

1. Accordingly, I do not see that the redaction can prejudice the applicants,

1. As to the hearsay objection, the conversation in question is tendered not to prove the truth of its comments, but to explain why the fee invoices are addressed (as they are) to persons other than the named plaintiffs in the Original Proceedings. On that basis, I consider that the material in paragraph 6 is not excluded by the hearsay rule.

1. That leaves the question of late service. Although there is not precise evidence as to when the affidavit was served, it could not have been before 31 January - that is to say, less than a week before the commencement of the hearing. On the other hand, notice of the contention which it supports had been given in the earlier affidavit sworn on 13 December 2011 in the paragraph to which objection has been taken, and which was rejected with leave to supplement.

1. The applicants after 13 December 2012 set about investigating that contention, by issuing on 15 January 2013 notices to produce "copies of all invoices rendered by the second plaintiff's legal representatives in respect of these proceedings up to and including November 2011", and equivalently in respect of the first plaintiff's legal representatives, requiring production for inspection of those documents by 29 January 2013. The documents were produced under cover of the affidavit in question, it would seem, on 31 January 2013.

1. That, it seems to me, illustrates that the applicants were on notice of the contention which this material is said to support, and set about investigating it. What Mr Farrar's 31 January 2013 affidavit does is to put into admissible form the contention rejected on his previous affidavit, in circumstances where that contention was under already investigation by the applicants, and where the underlying documents were produced, if not precisely within the time required by the applicants' notices to produce for inspection, within a couple of days thereof.

1. In those circumstances, I do not consider that the service of Mr Farrar's affidavit on or about 31 January 2013 unfairly prejudices the applicants, and will allow the affidavit to be read.

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Decision last updated: 03 April 2013