John S Hayes & Associates v Kimberly-Clark Australia P/L

[1993] FCA 685

JUDGMENT NO.	6 x 5 I	w....mwm	9 3
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NEW SOUTH WALES DISTRICT REGISTRY ) No NG231 of 1992

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GENERAL DIVISION )

BETWEEN:  JOHN S HAYES & ASSOCIATES
Applicant

m:	KIMBERLY-CLARK AUSTRALIA PTY LIMITED
Respondent
AND	'
_.	KIMBERLY-CLARK AUSTRALIA PTY LIMITED
Cross-Claimant

FEDERAL COURT OF

AUSTRALIA

PRINCIPAL	m: JOHN S HAYES & ASSOCIATES PTY
REGIGTRY	LIMITED
Cross-Respondent

CORAM :	HILL J
PLACE	: SYDNEY
DATED	: 26 JULY 1993

EX TEMPORE REASONS FOR JUDGMENT

The applicant seeks leave to withdraw certain admissions deemed to have been made by it pursuant to 0.18 r.2 of the Federal Court Rules as a result of the service upon it by the respondent of a notice to admit facts and authenticity of documents dated 4 June 1993.

not available for cross-examination. Mr Wylie was not cross-	examined. MS Frankham says that on 21 June 1993 she had a
telephone call with Mr Wylie in which she sought his consent to an extension of time within which to serve a notice disputing the facts which had been set out in the notice served under 0.18 r.2(1).
Mr Wylie, she says, was not available and she left a message requesting him to return her call. Mr Wylie says that the first response he had to the notice was on the next day, 22 June 1993. Both of the solicitors are in agreement that they spoke for the first time about the matter with each other on that day. The two versions of the conversation diverge. Mr Wylie says that he said that he would not consent to an extension. MS Frankham says that after a somewhat jocular conversation Mr Wylie concluded by saying he really could not say whether his client would consent.
Two days after that conversation a notlce disputing the facts or some of them was served on Mr Wylie and filed in
each other on the matter. The first time that a problem arose the Court. Thereafter the parties did not communicate with
as to admissions was on the first day of the hearing before me when senior counsel for the respondent indicated that the admissions had been made and that his client proposed to rely upon them.
It was in response to this that the present application has now been made. In her affidavit, MS Frankham
says that she had believed the time to dispute facts expired on the 21st and further she assumed that Mr Wylie's client had ultimately consented to the extension of time there having been no negative response received from him.
I do not see any reason to disbelieve either of the solicitors in question. The probabilities are that what occurred between them on 22 June, and particularly the way in which the matter was finally left, involved some failure of communication between them. That failure of communication continued by neither party discussing the question with the other thereafter. Personally, I think that is inexcusable but that is the way it happened.
Senior counsel for the respondent referred me to cases concerning the amendment of pleadings including Ketteman v Hansel Properties Ltd [1987] AC 189, particularly the passage of Griffiths LJ at 219-223 and an unreported decision
of Cole J in Government Insurance Office of NSW v Manettas (unreported, 8 July 1992, Commercial Division of the Supreme
Court) in support of a submission that it was now too late in the day for the Court to give leave to the applicant to withdraw the admissions deemed to have been made by virtue of the failure to comply with 0.18 r.2(2). He referred to the fact that justice was not a matter that could be judged purely by virtue of a monetary penalty flowing from an award of costs in the event of an adjournment being necessary, but that the parties had a legitimate expectation that the matter would proceed on the basis of the admissions that had been made.
He referred also to the need for there to be finallty in litigation and reference was made to the decision in Holcombe v Coulton (1988) 17 NSWLR 71 at 77 and to the judgment of Brennan J In Autodesk v Dvason (No 2) (1993) 67 ALJR 270. Counsel referred also to the prejudice which his client might suffer in now having to obtain evidence and also pointedly to the fact that the applicant had not given any explanation as to why some of the admissions were not made, particularly those in paras.6, 7 and 8 of the notice of admission, which concerned figures of the applicant. I should say that paras.1 and 2 are now admitted, but with the exception of the reference to importation.
Paragraph 6 is essentially admitted. Paragraph 7 is admitted, and it is admitted in reference to para.11 that
there are five manufacturers of toilet tissue in Australia, comprising Kimberly-Clark, Bowater, Cosco Holdings, Austissue
and Paper Converting Company. Paragraphs 8, 9 and 10 are critical to the case and with all respect I do not believe for a moment that the respondent was of the view that it had secured admissions from the applicant of the matters referred to in those paragraphs. It is, of course, clear that the applicant's solicitor did not act promptly to respond to the notice to admit and further compounded the problem by fillng a notice denying the facts without endeavouring to ascertain whether the respondent consented to that course.
Certainly, the respondent's solicitors, having received the notice from the applicant, did not assist matters by choosing to ignore it and not mention it again. That, of course, does not excuse, however, the applicant.
The matter is one, ultimately, for me to exercise a discretion, I take into account the circumstances in which the failure to respond arose, I take into account the failure to deal with paras.3, 4 and 5 in MS Frankham's affidavit; the possibility of prejudice to the respondent in the event that it now has to obtain evidence relating to the matters not admitted; the fact that the case seems unlikely to finish by the scheduled date on Friday, having regard to the fact that two and a half days have almost elapsed and no witness has yet given oral evidence; the fact that an adjournment, if needed
may be compensated for by costs; the fact that it is open to the respondent, and indeed has already been anticipated, that
undertakings exchanged between the parties on a further occasion may well be sought to be withdrawn if the case goes over.
Having regard to both the principle of the finality of the litigation on the one hand, and the need of the Court to attempt to do justice between the parties as best it can on the other, I would permit the applicant to withdraw the admissions but only upon condition that the applicant file and serve, on a date to be nominated this afternoon, affidavit evldence of the sales of the respondent's washroom products to ABC Tissue Products Pty Limited and Multi Range Pty Limited, during the period 1 January 1989 to 1 April 1992, the dollar value of purchases of washroom products by the applicant from the respondent on its managing agents delto rate in respect of sales to ABC Tissue Products Pty Limited and Multi Range Pty Limited during the period 1 January 1992, and the breakdown of the applicant's non-governmental purchases of the respondent's washroom products between managing agents delto rate and trailer rate during the calendar years 1990 to 1992 inclusive, making available in support of such affidavit material the prime documents upon which that affidavit is prepared for inspection if need be by counsel or solicitors for the applicant on the basis that that material will be kept confidential at this stage.

There is a conflict of evidence between Mr Wylie, the solicitor for the respondent on the one hand, and MS Frankham, the solicitor for the applicant, on the other. MS Frankham is presently on a week's pre-arranged leave and was

I will reserve costs until this afternoon when I

will hear what is going to happen.

I certify that this and the

preceding five (5) pages
are a true copy of the Reasons
for Judgment herein of his Honour

Mr Justice Hill.

Associate:  T t l f i i w ; h'

Date: 2? SkPT 4 3

Counsel and Solicitors	CD Curtis & SC Burley
for Applicant:	instructed by Hunt & Hunt
Counsel and Solicitors	RV Gyles QC & CC Hodgekiss
for Respondent:	instructed by Sly & Weigall
Date of Hearing:	26 July 1993
Date Judgment Delivered:	26 July 1993