IGA Distribution Pty Ltd v King and Taylor Pty Ltd
[2002] VSC 411
•19 September 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 2068 of 2001
| IGA DISTRIBUTION PTY LTD | Plaintiff |
| v | |
| KING & TAYLOR PTY LTD | First Defendant |
| DELAHEY PROPERTIES PTY LTD | Second Defendant |
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RULING NO. 7
JUDGE: | Nettle J | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 19 September 2002 | |
DATE OF RULING: | 19 September 2002 | |
CASE MAY BE CITED AS: | IGA Distribution Pty Ltd v King & Taylor Pty Ltd and anor | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 411 | |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R.M. Garratt QC | Cornwall Stodart |
| For the First Defendant | Mr J.D. Hammond QC | Richard Szental |
| For the Second Defendant | Mr P.J. Hayes with Ms L. Hannon | Efron & Associates |
HIS HONOUR:
It is now the morning of the 11th day of this trial which was set down for hearing on an estimate of duration of five to six days. It is a number of days since the plaintiff has closed its case and we have reached the point where the firstnamed defendant was close to closing its case after extensive cross-examination of both of its principal witnesses.
Application is now made ore tenus by Mr Hammond QC on behalf of the firstnamed defendant to add Mr Roger King of Rogers and Gaylard solicitors to the list of witnesses proposed to be called by the firstnamed defendant, and also to recall for further cross-examination Ms Zusman, the first witness called on behalf of the plaintiff. Ms Zusman has already been cross-examined at two separate times; on the latter occasion, after application was made and granted on the eighth day of trial to amend the firstnamed defendants defence (to include an allegation that the plaintiff was disentitled from the equitable relief which it sought by reason of an absence of clean hands).
In substance, the allegation in respect of which it is sought to adduce further evidence is that, in submitting to the first defendant proposed new forms of agreement under cover of a letter of 21 June 2001, and perhaps also by the contents of the letter itself, the plaintiff proposed a course of conduct calculated to defraud the revenue by the evasion of stamp duty, and that disentitles it to equitable relief in the nature of specific performance.
This allegations of fraud came late to the proceedings. The first time that it surfaced was on the second day of trial when the secondnamed defendant brought into court and sought leave to rely upon further particulars of the allegation in paragraph 16 of the second defendant’s case. At that time leave was granted without objection to include within those particulars an allegation that the plaintiff had acted without clean hands by reason of its attempts to evade stamp duty, more or less in the way I have outlined.
Thereafter, Ms Zusman was called and examined in chief and cross-examined by both the secondnamed defendant and the firstnamed defendant. Following her evidence, application was made by the firstnamed defendant to amend its pleading to include for the first time an allegation of an absence of clean hands, substantially the same as that contained in the particulars brought in by the secondnamed defendant as I have outlined.
The firstnamed defendant's application was stood over for some time, and at least overnight, in order that counsel for the parties might attempt to reach some agreed course. In the end however, on the morning of 12 September, which was the eighth day of trial, there was an argument about whether or not the firstnamed defendant ought to be allowed to amend in the fashion which it sought and I resolved the argument by granting leave to amend. I did so, however, on the basis that the firstnamed defendant would not seek to place reliance upon evidence other than that which was contained in the witness statements which had already been tendered and those which it was proposed to be tendered, out of the statements which at that time had been filed.
On that basis Ms Zusman was recalled for further cross-examination and cross-examined specifically by Mr Hammond QC on behalf of the firstnamed defendant, as to whether or not what she had done in submitting the letter of 21 June 2001 and the proposed new agreements was calculated to defraud the Revenue.
Since then, until now nothing further has been heard of the issue. I am told by Mr Hammond, however, that it arises again now because it was only last night at about 5 pm when there first came to his attention a file note (which had been discovered by the plaintiffs as discovered Document No.239) prepared by Ms Zusman on 20 June 2001, recording a conversation which she had with Mr Roger King about a proposal directed to settling disputes which then existed between plaintiff and firstnamed defendant, as to who it was would pay any penalty stamp duty and other matters concerning completion of the transaction.
I have not been favoured with an acceptable explanation of why it is that the document has only now come to Mr Hammond's attention. It was said that the court book was prepared by the plaintiff and that the firstnamed defendant had no role in its preparation, and it was, as I understood it, sought to be implied that in that way it had been assumed incorrectly by the firstnamed defendant that all relevant documents had been included in evidence. But I do not find that explanation to be acceptable, even if it be the case that the plaintiff was responsible for the preparation of the court book. Both the first and secondnamed defendants have prepared their own court books of the documents which they regard as important, but which were not included in the principal court book.
Perhaps one is to infer that the document was simply overlooked and now, with the prospect of final submissions clearly in sight, an opportunity has been taken to look again at the discovered documents and it has been realised that one which was passed by may have a significance which was not previously realised. And if that is all there were to it, I would be disposed to allow the application to add Mr King to the list of the firstnamed defendant's witnesses and to recall Ms Zusman for further cross-examination upon the note.
It seems to me, however, that now on this 11th day of trial that is not all there is to it. To begin with, Ms Zusman had already twice been cross-examined and as I have observed, on the second occasion, specifically with reference to the subject of clean hands.
Secondly, as the passages of the transcript at pp.549 to 550 make clear, when I granted leave to the firstnamed defendant to include in its defence an allegation of absence of clean hands I did so after receipt of submissions from counsel for the plaintiff wherein plainly it was assumed that the ambit of evidence would not be expanded if the amendment were to be allowed.
Thirdly, the course which is now proposed is one which plainly would expand the ambit of evidence, because it is proposed to call an additional witness about matters which have not been dealt with elsewhere in the evidential material which has been filed or tendered.
Fourthly, although it is always difficult at such a stage of a trial as we have now reached in this one, to say with certainty or even in probability that counsel would have approached the preparation and conduct of the trial differently, had they been apprised of allegations not then made but later to be made, it strikes me as being distinctly probable, to put it at its lowest, that if counsel for the plaintiff had known in advance of the commencement of the trial, that it was to be alleged that their client had engaged in a fraud upon the Revenue, and that by reason of that the plaintiff was to be disentitled from the equitable relief which it sought, their approach not only to the preparation but also to the conduct at the trial would be likely to have been distinctly different.
Fifthly, although it is said and with considerable force by Mr Hayes on behalf of the second defendant that the allegation has been, as it were, in play since he first brought it in, in his particulars on 4 September and that those particulars were received without objection or, indeed, any apparent comment from the firstnamed plaintiff, the point remains that when that occurred the evidence which it was thought would be adduced on behalf of both first and secondnamed defendants was known to counsel for the plaintiffs; for it was contained both within the three court books and in the witness statements which had been filed.
Thus, as it seems to me, the position here is very similar to that which applies in the case of the secondnamed defendant. It is probable and I conclude highly likely that counsel would have taken a different approach to the particulars brought in by Mr Hayes on 4 September if they had known that application would be made to add to the list of witnesses to be called on behalf of either of the defendants and, after 11 days of trial, to recall one of their first-called witnesses, further to cross-examine her on matters of which she had not been warned to that point.
Seventhly, and although I do not place a great deal of store upon it, it is a relevant consideration that to allow the application which is made would add significantly to the duration of this trial, which has already run far over time by reason of the woefully inaccurate estimate of duration which was given at the time at which it was set down. And I need to bear in mind the dictates of court management and administration.
Eighthly, although I would ordinarily hesitate very long before refusing to counsel for a defendant leave at any stage of a trial to add to the number of witnesses which had previously been signified as proposed to be called, here the case is different to the ordinary run of cases, because to allow the calling of the additional witness would necessitate the further cross-examination of the firstnamed plaintiff's witness in accordance with the rule in Browne v Dunn[1], which I am not disposed to allow.
[1](1893) 6 R 67.
That seems to me to make a difference which is sufficient when coupled with the other reasons to which I have referred to refuse the application.
Accordingly, I refuse the firstnamed defendant's application to recall Ms Zusman and in those circumstances I consider that it would be inappropriate and therefore I will not allow the firstnamed plaintiff to call Mr King to give evidence as to the contents of the file note.
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