Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 4]
[2011] WASC 284
•28 SEPTEMBER 2011
COMPUTER ACCOUNTING AND TAX PTY LTD -v- PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD [No 4] [2011] WASC 284
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 284 | |
| Case No: | CIV:2265/2006 | 28 SEPTEMBER 2011 | |
| Coram: | SIMMONDS J | 28/09/11 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | COMPUTER ACCOUNTING AND TAX PTY LTD PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD DONALD CAMPBELL SMITH As Executor of the Estate of MARTIN PAUL BANNING |
Catchwords: | Application to adduce additional evidence where decision reserved Proper approach to be taken |
Legislation: | Nil |
Case References: | Devenish v Devenish [2011] WASC 129 Jaddcal Pty Ltd v Minson [2011] WASC 28 Osborne v Landpower Developments Pty Ltd (In Liq) [2003] WASCA 117 Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Co Pty Ltd [No 2] [2011] WASC 189 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD
First Defendant
DONALD CAMPBELL SMITH As Executor of the Estate of MARTIN PAUL BANNING
Second Defendant
Catchwords:
Application to adduce additional evidence where decision reserved - Proper approach to be taken
Legislation:
Nil
(Page 2)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : Mr D A Lenhoff
Second Defendant : Mr D A Lenhoff
Non-party : Mr D Thompson
Solicitors:
Plaintiff : Chris Stokes & Associates
First Defendant : Holborn Lenhoff Massey
Second Defendant : Holborn Lenhoff Massey
Non-party : David Thompson
Case(s) referred to in judgment(s):
Devenish v Devenish [2011] WASC 129
Jaddcal Pty Ltd v Minson [2011] WASC 28
Osborne v Landpower Developments Pty Ltd (In Liq) [2003] WASCA 117
Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Co Pty Ltd [No 2] [2011] WASC 189
(Page 3)
1 SIMMONDS J: [This judgment was delivered orally and has been edited from the transcript]
2 As I indicated yesterday I am now in a position to deliver my decision in relation to this matter. It is of course an application for leave to adduce additional evidence. For that purpose I understood it as an application to reopen the matter the subject of the hearing on 13 and 14 October to that extent.
3 I have decided the application should not be granted in respect of any of the evidence put forward and I set out my reasons for doing so in the following way. First, I describe the background to the application; secondly, I describe the evidence it is sought to have adduced; thirdly, I describe the applicable law, and fourthly, I apply the law. The final section of my reasons has to do with conclusions and appropriate orders.
4 Starting with the background, on 14 October 2010 I reserved judgment on applications for orders as to costs - I will call these the costs applications - in relation to freezing orders obtained by the defendants and binding the directors and shareholders of the plaintiff. The defendants' freezing orders is what I will call those.
5 The defendants' freezing orders had earlier been discharged. Angela Cecilia Theresa Frigger, Mrs Frigger, and Hartmut Frigger, Mr Frigger - together I call them the Friggers - were those directors and shareholders. The costs applications include applications for costs by and against the Friggers. Judgment has not yet been delivered.
6 The Friggers applied by chamber summons dated 22 September 2011 - I call that the present application - for leave to adduce additional evidence in the form of two affidavits with their annexures. One is an affidavit of Mrs Frigger sworn 26 August 2011. Mrs Frigger's affidavit of 26 August 2011 has a single annexure. The other affidavit is one sworn by Mrs Frigger on 13 September 2011. Mrs Frigger's affidavit of 13 September 2011 has five annexures. Neither affidavit is of a substantial size.
7 It was common ground before me that both affidavits and their annexures relate to a single issue the subject of evidence adduced by the Friggers at the hearing of the costs applications. That hearing was on 13 and 14 October 2010. That issue, which I will call the alleged interference issue, is described in the written submissions of the Friggers for the costs applications dated 24 August 2010 at pars 7, 32 and 33 of those submissions, which are as follows:
(Page 4)
- 7. Mr and Mrs Frigger also submit that the defendants, through their solicitor, have unfairly interfered with the conduct of these proceedings and has as a result caused unnecessary costs to be incurred by Mr and Mrs Frigger such that the Court should sanction the defendants by ordering that the costs be taxed on an indemnity basis.
…
32. Mr and Mrs Frigger also make the following submissions. Mrs Frigger has deposed that as a result of conversations she has had with various solicitors whom she has engaged, she believes that the defendants' solicitor has made disparaging comments to her solicitors which may have caused those solicitors to withdraw or hesitate from acting for Mr and Mrs Frigger (See paragraphs 50 to 57 of Mrs Frigger's affidavit dated 22 June 2010 and Mrs Frigger's affidavit sworn 11 May 2010).
33. It is to be observed that the defendants' solicitor has not filed any affidavit evidence rebutting the evidence of Mrs Frigger. In these circumstances, the submission is made that the defendants have engaged, through their solicitor, in tactics which the Court should indicate it does not approve of. In these circumstances, Mr and Mrs Frigger request that the order for costs in their favour in relation to these proceedings should be an order under which they are entitled to recover all of their costs incurred save in so far as the costs may be unnecessary or unreasonable.
8 For the purposes of the hearing of the costs application on 13 and 14 October 2010 the Friggers relied, amongst other things, on Mrs Frigger's affidavit sworn 22 June 2010, to which reference is made in the footnote in submissions par 32, as well as another affidavit of Mrs Frigger sworn 18 May 2010.
9 It was made apparent at the hearing of the costs application on 14 October 2010 that Mrs Frigger's affidavit of 18 May 2010 was the affidavit which is incorrectly referred to in the footnote to submissions par 32 as sworn 11 May 2010.
10 At the hearing of the present application, it was not suggested that there was any other evidence that had been before me at the hearing of the costs application on 13 and 14 October 2010 which might be seen to have been relevant to the alleged interference issue than Mrs Frigger's affidavits of 18 May 2010 and 22 June 2010. It also appeared to be common ground that the relevant parts of Mrs Frigger's affidavit of 18 May 2010 were par 33 - 39 headed 'Sabotage of Proceedings' and that the relevant parts of Mrs Frigger's affidavit of 22 June 2010 were those
(Page 5)
- referred to in the submissions of 24 August 2010 for the Friggers, in the 22 June 2010 affidavit, pars 50 - 57.
11 Those paragraphs in those two affidavits may, in my view, be summarised as follows:
(1) Mrs Frigger had conversations with three different solicitors not long after they had ceased to represent her in which, she deposes, they told her of disparaging remarks the solicitor acting for the second defendant had made about Mrs Frigger as a client on or about 24 March 2010 - see Mrs Frigger's affidavit of 18 May 2010, par 36 with respect to Mr T Clavey, on or about 28 April 2010; see Mrs Frigger's affidavit of 18 May 2010, par 39 with respect to Mr G Dutton on 15 June 2010; see Mrs Frigger's affidavit of 22 June 2010, par 50 with respect to Mr Darbyshire. I note with respect to Mr Darbyshire that the matter of remarks made to him are not, it seems to me, relevant for the purposes of the present application. The present application relates to remarks alleged to have been made to Mr Clavey and to Mr Dutton.
(2) At various times over the period from about 15 June 2010 to about 30 March 2011 the Friggers had been either unable to engage a solicitor (see Mrs Frigger's affidavit of 22 June 2010 at par 51), or they had lost the services of one they had otherwise than by the Friggers terminating those services (see Mrs Frigger's affidavit of 22 June 2010, par 52, with respect to a firm of solicitors other than Mr Clavey's firm or Mr Dutton's). See also par 54 of the same affidavit of Mrs Frigger with respect to Mr Clavey and par 37 of Mrs Frigger's affidavit of 18 May 2010 again with respect to Mr Clavey.
(3) The 'continuous change of solicitors' as well as other demands meant Mrs Frigger 'simply did not have the time' to put certain evidence before the court in relation to the freezing orders (see Mrs Frigger's affidavit of 22 June 2010, par 57).
12 At the hearing on 14 October 2010 of the costs applications there was an exchange between counsel for the Friggers and counsel for the second defendant as well as with myself concerning the alleged interference issue and this evidence (see 14 October 2010 ts 2955 and 2967). The bulk of those pages form annexure 5, to the affidavit of Mrs Frigger of 13 September 2011.
(Page 6)
13 The upshot of that exchange as appears to have been common ground before me was this, and I number this proposition 4 to follow on from the previous propositions:
(4) There was no other evidence that might reasonably be seen to be relevant to the alleged interference issue from the other parties and in particular, there was no evidence by way of denial before me of the evidence as to what, if anything, the solicitor acting for the second defendant had said to the three solicitors on the three occasions.
(5) However, that evidence from Mrs Frigger was hearsay which the solicitor for the second defendant had informed the court, albeit not by sworn evidence, he did not accept and,
(6) Although that evidence was hearsay, it was admissible in the costs applications to be weighed as hearsay (see for all of these propositions ts 2965).
14 I turn now to describe the evidence sought to be adduced. It is evidence concerning Mr Clavey - see Mrs Frigger's affidavit of 13 September 2011, particularly annexures AF1 to AF4 - and concerning Mr Dutton - see Mrs Frigger's affidavit of 26 August 2011, particularly annexure AF1.
15 In order to describe this evidence I will need to refer both to the affidavits of Mrs Frigger of 26 August 2011 and 13 September 2011 and also to the only affidavit filed in support of the present application, her affidavit of 23 September 2011.
16 I turn then to the evidence sought to be adduced with respect to Mr Clavey. There is evidence which was discovered in the course of proceedings commenced by the Friggers in the District Court against Clavey Legal Pty Ltd for, inter alia, breach of contract. Those proceedings in the District Court are CIV 1221 of 2011: see Mrs Frigger's affidavit of 26 August 2011 at par 5, and see her affidavit of 23 September 2011 at par 5 and annexure AF1 to that affidavit.
17 The evidence consists of notes to file by Mr Clavey dated 24 February 2010: see annexure AF1 to Mrs Frigger's affidavit of 13 September 2011; and 4 March 2010, see annexure AF2 to that affidavit. In both of those notes Mr Clavey refers to comments the notes attribute to the solicitor for the second defendant, made to Mr Clavey.
(Page 7)
18 In addition, there is a chain of emails between 31 March 2010 and 6 April 2010 between Mr Clavey and the solicitor for the second defendant, commencing with one in which Mr Clavey gives that solicitor 'advance notice' that his engagement 'in all Frigger matters was terminated', and in which after that notice the solicitor for the second defendant comments in favourable terms on that termination: see annexure AF3 to the affidavit of Mrs Frigger of 13 September 2011.
19 There is also a letter dated 25 May 2010 from the solicitor for the second defendant to Mr Clavey, enclosing 'for your reference' a copy of Mrs Frigger's affidavit of 18 May 2010: see annexure AF4 to Mrs Frigger's affidavit of 13 September 2011.
20 The Friggers have made application in District Court proceedings CIV 1221 of 2011 for release from what is there referred to as the implied undertaking in relation to documents constituting the evidence I have just described. That application was the subject of a case management hearing in the District Court on 7 September 2011, and the application is listed to be heard in the District Court on 10 October 2011. I note that the proceedings CIV 1221 of 2011 in the District Court were commenced in April 2011: see the affidavit of Mrs Frigger sworn 26 August 2011, par 5.
21 I turn then to the other evidence sought to be adduced. This is the evidence sought to be adduced in respect of Mr Dutton. This is evidence in the form of a letter dated 22 August 2011 from Mr Dutton to the Friggers, in which he states that shortly after taking instructions from the Friggers he telephoned the solicitor for the second defendant, with a view to discussing the status of the various proceedings listed in that letter in which he was representing the Friggers.
22 Mr Dutton goes on in the letter to state that the solicitor for the second defendant made statements to him in regard to Mrs Frigger to the effect there indicated. It was common ground before me that the effect so stated was disparaging of Mrs Frigger as a client and was to the same effect as the evidence as to the gist of the conversation on or about 28 April 2010 that Mr Dutton had with Mrs Frigger, to which she deposes in her affidavit of 18 May 2010 at par 39.
23 I turn now to the law applicable to the present application, as to which there is no contest between the parties. For the purposes of the evidence concerning both Mr Clavey and Mr Dutton, the law in relation to the exercise of the court's discretion to reopen a matter where the hearing is complete but the reasons for judgment have not been delivered is as
(Page 8)
- stated in Osborne v Landpower Developments Pty Ltd (In Liq) [2003] WASCA 117 [12] (McLure JA); see as well, Jaddcal Pty Ltd v Minson [2011] WASC 28 [44] - [50] (Le Miere J) and Devenish v Devenish [2011] WASC 129 [108] - [122] (Pritchard J).
24 From those authorities I extract the following principles applicable to the present application:
(1) A deliberate decision not to call available evidence would ordinarily tell decisively against the application: Osborne [12].
(2) Even where there was no such deliberate decision not to call the evidence, as where it was an unintentional oversight, the fact the evidence could with reasonable diligence have been obtained and in that sense was available at the hearing may be weighed against the exercise of discretion: Jaddcal [46] and [50].
(3) If the hurdle in proposition 1 at least is passed, the primary consideration should be embarrassment or prejudice to the other side: see Osborne [12].
(4) The materiality of evidence is a relevant factor in the exercise of discretion: Devenish [116]; and
(5) Materiality goes to the degree of likelihood that the evidence, if accepted, would affect the result: Devenish [116], referring to authorities expressing different views as to that degree. For my purposes I accept the lowest of the standards of likelihood there referred to.
25 For the purposes of the evidence concerning Mr Clavey only, there is an additional factor relevant to the exercise of the discretion. It is the implied undertaking in respect of the evidence, as the obligation is described in the affidavits of Mrs Frigger before me. The law as to the effect of the implied undertaking for my purposes is sufficiently stated in Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Co Pty Ltd [No 2] [2011] WASC 189 [12] (Beech J), from which I extract the following principles applicable to the present application.
26 Continuing the numbering from the previous part of my reasons:
(6) The implied undertaking, which is more properly described as an obligation of substantive law, is that disclosure obtained by a party and compelled by reason of a rule of court or a specific order of
- the court or otherwise cannot, without leave of the court, be used for any purpose other than that for which the disclosure was given.
- (7) This obligation extends to discovered documents. However,
(8) The obligation ceases to apply when the documents are received into evidence.
27 I turn now to apply these principles in light of the submissions of the parties. Firstly, I consider the application of the principles to the evidence concerning Mr Clavey. I consider the discretion to reopen to permit evidence to be adduced should not be exercised in respect of Mr Clavey for the following reasons. The fundamental reason is because of the obligation represented by the implied undertaking. The Friggers have not yet been released from that undertaking.
28 For the Friggers it was submitted I should conclude that the documents constituting the evidence concerning Mr Clavey had been admitted into evidence in the District Court proceedings of CIV 1221 of 2011 on the basis of a passage in Mrs Frigger's affidavit of 23 September 2011, in which she deposes that at the case management hearing on 7 September 2011 extensive reference was made to her affidavit of 13 September 2011 in relation to the present application and to the documents annexed to it, and also on the basis that the Principal Registrar 'directed me to inform this Court and the Court of Appeal in CACV 51 of 2010 of the relevant documents': see Mrs Frigger's affidavit of 23 September 2011, par 5.
29 However, I am unable to extract from that passage a sufficient basis for the conclusion counsel for the Friggers submitted I should draw. At most I conclude the evidence is that the Principal Registrar sought that both courts be informed of progress in District Court CIV 1221 of 2011 in relation to the matters there referred to. I arrive at that conclusion because of the nature of case management hearings which are not of themselves a hearing of the application itself in which the evidence would be properly admitted and, further, the fact, which is common ground, is that the Friggers continue to seek release from the obligation at the hearing listed for 10 October 2011.
30 I consider it unnecessary therefore to take into account the evidence of the solicitor for the second defendant in his affidavit of 27 September 2011, that he had been informed by the solicitor for Clavey Legal Pty Ltd that at the hearing before the Principal Registrar on 7 September 2011 the Principal Registrar had said nothing which could have led Mrs Frigger to
(Page 10)
- believe the relevant documents were no longer subject to the implied undertaking.
31 I should add, however, that in any event I would not exercise the discretion to admit the evidence concerning Mr Clavey on materiality grounds. The evidence, whether considered as corroboration of evidence concerning Mr Dutton or on its own, does not in my view have a sufficient likelihood of affecting the result to warrant its admission. The likelihood it would affect that result depends, in my view, on the conclusions open to me to draw from it, that the remarks attributed to the solicitor for the second defendant had or might have had a bearing on the decision of the solicitor to whom the remarks were made whether or not to continue to act for the Friggers.
32 It seems to me that the evidence concerning Mr Clavey, when regard is had to the notes to file, particularly the second of those notes, indicates that the evidence sought to be adduced would not have had significant weight in relation to arriving at any such conclusion. The evidence concerning Mr Clavey and the notes to file, in my view of that evidence tends to indicate, on the contrary, that the remarks of the solicitor for the second defendant were treated by Mr Clavey as having no bearing on his decision whether or not to continue to act for the Friggers, and in particular I note the note to file of 24 February 2010, where the note says in relation to the remarks addressed to Mr Clavey attributed to the solicitor for the second defendant, 'I was not interested'.
33 I do not draw from the email exchange subsequently that commenced with the 'advance notice' any sufficient basis for drawing that conclusion. Also, I have not failed to consider the evidence of the remarks attributed to the solicitor for the second defendant in an exchange with Mr Clavey, which appears to have been another exchange, a conclusion as to that other exchange I reach because of the character of those remarks as referred to in Mrs Frigger's affidavit of 18 May 2010, par 36. However, those remarks attributed to the solicitor for the second defendant have a character or content which does not easily line up with the remarks attributed to the solicitor for the second defendant in the notes to file.
34 Nor do I draw any sufficient basis for such a conclusion from the letter of 25 May 2010. I do not see a sufficient basis for drawing those conclusions, because it seems to me they must be viewed against the background of the earlier notes and, viewed against that background, the communications in the emails and the letter of 25 May 2010 are the kind that could reasonably be expected given that background disclosing the
(Page 11)
- interest of the solicitor for the second defendant in the continuation of the representation of the Friggers.
35 I consider that indeed, had the evidence concerning Mr Clavey been before me at the hearing of the costs application, it might well have been considered to be relevant evidence and indeed I note that the evidence in the 18 May 2010 affidavit and 22 June 2010 affidavit was not objected to on relevance grounds.
36 However, I consider also that the evidence concerning Mr Clavey, had it been available at that earlier time, would not have received any significant weight in relation to the conclusion referred to because of the feature of the notes to file that I have referred to.
37 It follows that I would not exercise the discretion to grant the present application in respect of the evidence concerning Mr Clavey. It also follows that I would not exercise it even if release from the implied undertaking were to be obtained.
38 I turn then to the evidence concerning Mr Dutton. I believe that I can be rather briefer on this account. The evidence concerning Mr Dutton, it appears to have been common ground before me, was evidence that was available to the Friggers at the time of the hearing on 13 and 14 October 2010. I have reflected on whether a similar conclusion could have been drawn in respect of the evidence of Mr Clavey. In particular, I note that proceedings against Mr Clavey were not commenced until April 2011, as I have indicated. I believe indeed that such evidence could be seen to have been available at that time and of course Mr Clavey, like Mr Dutton at the hearing on 13 and 14 October 2010, was a person who had in the reasonably recent past been acting for Mrs Frigger and in respect of whom evidence of the kind appearing in the affidavit of Mrs Frigger of 26 August 2010, annexure 1, could, one would have expected, reasonably have been obtained. On the other hand, I do not ignore the fact that the Friggers commenced proceedings against Mr Clavey, albeit at some time after the proceedings in October 2010.
39 To the extent it were necessary to do so, I consider that the availability of the evidence of Mr Clavey at the time of the hearing on 14 October 2010 is an additional reason not to exercise the discretion referred to.
40 In respect of Mr Dutton, the matter is even clearer because the affidavit annexes evidence that was secured. The background to the securing of that evidence is set out, so far as the affidavits of Mrs Frigger
(Page 12)
- are concerned, principally in her affidavit sworn 13 September 2011 at par 8.
41 In par 8 she refers to annexure AF5 to her affidavit, being the transcript of the hearing on 14 October 2010 to which I previously referred, and in which she says because of the submission or evidence that counsel for the second defendant made or gave at that time indicating that the solicitor for the second defendant had received information from the solicitors in question that they had not told Mrs Frigger about conversations the solicitor for the second defendant may or may not have had with them:
I believed that the Court would never believe my evidence over the evidence over the evidence of [the solicitor for the second defendant]. Only after Clavey Legal Pty Ltd had discovered the evidence contained in this affidavit did I ask Mr Dutton to provide an account of his conversation with [the solicitor for the second defendant].
42 The difficulty I have with that evidence is that, as the transcript in AF5 indicates, the decision was taken apparently by or on the advice of the counsel appearing for Mrs Frigger at the hearing on 13 and 14 October 2010 that in view of previous exchanges between him and counsel for the second defendant, the Friggers would rely upon what was accepted to be the hearsay evidence that I have previously referred to and further evidence would not be sought.
43 It is further clearly recognised in the exchange in the transcript that what was said by the counsel for the second defendant was not itself evidence, and therefore I was left with the matter I have referred to previously as hearsay as the only relevant evidence before me to be weighed as hearsay and in the light of the submissions of the parties.
44 In view of that, it seems to me it is difficult to avoid the conclusion that a deliberate decision on forensic tactical grounds was taken not to secure the evidence which is now annexure 1 to the affidavit of 26 August 2010, and in any event, that evidence was reasonably available to those representing the Friggers. It seems to me that in view of that, the factors tending against the exercise of the discretion are very weighty indeed.
45 There is an issue of materiality that also arises in respect of the evidence of Mr Dutton annexed to the affidavit of Mrs Frigger. That materiality issue though is not as easily resolved, in my view, as it is in respect of Mr Clavey, as there is no evidence corresponding to the notes to file in respect of Mr Dutton.
(Page 13)
46 I therefore consider that I am not in a position, it seems to me, to determine the matter of the exercise of the discretion by reference solely or at least principally to the materiality factor. However, it seems to me that the matter of the deliberate decision or at least availability of evidence is such that I would not exercise the discretion to admit the evidence annexure AF1 and the related matter in the affidavit of Mrs Frigger sworn 26 August 2010.
47 It follows then that the present application by chamber summons dated 22 September 2011 should be dismissed. I will of course hear from the parties as to the appropriate order as to costs. But I should indicate that it is rather difficult to see - but of course I am open to hear - why the order should not be costs in favour of the second defendant in any event and it further would seem to me appropriate to fix those costs if that were the determination today.
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