De Costi Seafoods (Franchises) Pty Limited v Wachtenheim

[2012] NSWDC 125

District Court

New South Wales

Medium Neutral Citation:	De Costi Seafoods (Franchises) Pty Limited and Anor v Wachtenheim and Anor [2012] NSWDC 125
Hearing dates:	22/08/2012
Decision date:	22 August 2012
Before:	P Taylor SC DCJ
Decision:	Refuse leave to admit the further evidence of Mr Birrell under r 31.28 of the Uniform Civil Procedure Rules 2005.
Catchwords:	PROCEDURE - Application to adduce further evidence - expert
Legislation Cited:	Uniform Civil Procedure Rules 2005
Cases Cited:	Australian Securities and Investments Commission v Rich [2005] NSWSC 706 HM&O v Ingram [2012] NSWSC 684
Texts Cited:	Ritchie's Uniform Civil Procedure NSW
Category:	Procedural and other rulings
Parties:	Serge Wachtenheim (first cross-claimant) Deist Safety Equipment Australia Pty Ltd (ACN: 081 763 877) (second cross-claimant) De Costi Seafoods (Franchises) Pty Limited (ACN: 103 324 812) (first cross-defendant) Frank Theodore (second cross-defendant) George Costi (fourth cross-defendant) De Costi Seafoods (Holdings) Pty Limited (ACN: 064 186 410) (fifth cross-defendant) Androulla Costi (seventh cross-defendant)
Representation:	Mr R Newell (cross-claimants) Mr S J Stanton with Mr M B Holmes (first, second, fourth, fifth and seventh cross-defendants) L C Muriniti & Associates (cross-claimants) McLachlan Thorpe Partners (first, second, fourth, fifth and seventh cross-defendants)
File Number(s):	2006/296319
Publication restriction:	No

ex tempore Judgment

1. The cross-claimants seek to tender a further affidavit with annexures of eighteen pages and with a substantial exhibit of 351 pages. The affidavit is sworn by Mr Michael Birrell who has prepared previous expert reports and affidavits in these proceedings.

1. Mr Birrell is the longtime accountant of the first cross-claimant. He has claimed previously in the evidence, and claims in the affidavit, to have read the expert code of conduct, and to agree to be bound by it.

1. It is not contested that the affidavit and the exhibit should be treated as a new expert report, nor is it in contest that this expert report has not been served in accordance with Pt 31 r 28 of the Uniform Civil Procedure Rules 2005. That rule precludes the report being admissible unless leave is given under subr (3). In subr (4) leave is not to be given unless the court is satisfied that there are exceptional circumstances that warrant the granting of leave or that the report merely updates an earlier version of a report. It is also not suggested that the report merely updates an earlier version of the report.

1. Accordingly, the question to be considered is whether there are exceptional circumstances that warrant the granting of leave for the report to be admitted. The circumstances of the tender of the report are that Mr Birrell has not only previously given evidence in various reports but his cross-examination was completed some weeks ago. The trial has now reached week eleven, having been set down for between eight and ten weeks, and it is close to the conclusion of the cross-claimants' evidence. As a result, a large number of other witnesses have also completed their evidence. Some of those witnesses have relied upon the previous evidence of Mr Birrell, which is different from what is now put forward in the proposed affidavit.

1. Ritchie's Uniform Civil Procedure NSW at [31.28.20] identifies some circumstances that should be considered in determining whether there are exceptional circumstances warranting the grant of leave. These follow after a reference to the decision of Australian Securities and Investments Commission v Rich [2005] NSWSC 706.

1. The first circumstance is the timing of any disclosure of the report. The report was first disclosed in a form that might indicate its contents and served in the past week.

1. Leave was first sought in respect of the document last Friday, 17 August 2012. The reason for late service has been explained only to the extent that it is said to be attributable to a discovery by Mr Birrell some weeks ago. Mr Birrell asserts that his previous reports proceeded on a misunderstanding of some other evidence in the proceedings. As a result, he says that accrued but unpaid expenses have previously been included by him in the 2006 and 2007 financial years, but that these expenses should have been differently apportioned, some in the 2005 financial year as well.

1. Another factor mentioned in Ritchie's is the apparent materiality of the new evidence. This factor is problematic for the cross-claimants in two respects. First, a number of other witnesses have relied on Mr Birrell's previous evidence, which is inconsistent with what Mr Birrell now says is the position. Secondly, cross-examination has proceeded on the basis of that previous evidence, both in respect of Mr Birrell and the other witnesses. Thus, the new report could substantially change the impact of that evidence, and the effect of the cross-examination already completed.

1. Whether the report is material to the proceedings may be the subject of argument. I am not convinced that the report is crucial to the cross-claimants' case. If it is such a straightforward and uncontroversial matter, as the cross-claimants submit, it seems to me that evidence to the same effect could be elicited by means of cross-examination of the cross-defendants' witnesses, including the expert evidence called to rebut Mr Birrell. Alternatively, simple arithmetical errors could be raised by the cross-claimants in submission.

1. The next factor mentioned in Ritchie's is the time available for hearing. As is apparent, the amount of time already set for this hearing has been exhausted, but the hearing will continue until it is completed. Admission of the new report would raise the prospect of an adjournment of the hearing to enable a report in reply to be prepared.

1. The paragraph in Ritchie's also directs attention to the ability of the opposing party to meet the report. Evidently this would require the cross-defendants' expert to consider the report and an appropriate response to it. It would also raise questions about the appropriateness or otherwise of further cross-examination of other witnesses already excused from the proceedings.

1. The final factor listed in Ritchie's is the availability of the expert for cross-examination. I have been informed that the significant health issues of Mr Birrell make any further cross-examination of him at least problematic, if not unlikely.

1. This application raises some issues similar to those considered by McDougall J in HM&O v Ingram [2012] NSWSC 684. I respectfully adopt His Honour's words at [30] in respect of the current application:

"30 There comes a time in litigation when parties should be held to the case that they have sought to propound. Taking into account the procedural history to which I have referred, I do think that this time has come in this case."

1. In my view, there are no exceptional circumstances warranting the grant of leave. For the reasons I have given, the further material should not be the subject of a grant of leave.

1. Accordingly, I refuse leave to admit the further evidence of Mr Birrell under r 31.28 of the Uniform Civil Procedure Rules 2005.

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