Levy v Bablis - [2013] NSWCA 28

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Levy v Bablis [2013] NSWCA 28
Hearing dates: 29, 30 May, 28, 29 June, 1 August 2012 (further written submissions)
Decision date: 25 February 2013
Before: Beazley JA at [1];
Macfarlan JA at [2];
Meagher JA at [3].
Decision:
(1) Appeal dismissed.
(2) Appellant pay the respondent's costs of the appeal including the costs of the application to adduce further evidence.
(3) The appellant to lodge written submissions concerning the order sought by the respondent as to payment to him of all or part of the amount provided by way of security for costs before the amount of those costs has been fixed by agreement or order or otherwise. Those submissions to be lodged with the Court and served within 14 days of the date of these orders. The respondent to lodge and serve any response within 7 days thereafter. The Court will then determine what further orders, if any, should be made on the basis of those submissions.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: APPEAL - only ground that further evidence available justifying new trial - exercise of discretionary power under s 75A(7) of Supreme Court Act 1970 - most of further evidence as to matters occurring before trial - importance of principle of finality - whether "special grounds" - whether appellant could have led evidence as to those matters at trial by exercise of reasonable diligence - whether probable that further evidence would have resulted in a different outcome at trial - further evidence considered separately and together not justify conclusion that outcome would have been different - interests of justice not require order for new trial on basis that a "substantial wrong or miscarriage" has been occasioned
Legislation Cited: Evidence Act 1995
Evidence Amendment Act 2010
Supreme Court Act 1970
Surveillance Devices Act 2007
Uniform Civil Procedure Rules
Cases Cited: Akins v National Australia Bank (1994) 34 NSWLR 155
CDJ v VAJ [1998] HCA 67; 197 CLR 172
Clodumar v Nauru Lands Committee [2012] HCA 22; 86 ALJR 697
Coulton v Holcombe (1986) 162 CLR 1
D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1
Hampson v Hampson [2010] NSWCA 359
Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51
Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461
Levy v Bablis [2012] NSWCA 157
Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116
Orr v Holmes [1948] HCA 16; 76 CLR 632
Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64
Preston v Harbour Pacific Underwriting Management Pty Ltd [2008] NSWCA 216
Sepulveda v The Queen [2006] NSWCCA 379; 167 A Crim R 108
Tjiong v Tjiong [2012] NSWCA 201
Category: Principal judgment
Parties: Julian Emmanuel Levy (Appellant)
Peter Bablis (Respondent)
Representation: Counsel:
P Menzies QC, Ms B K Nolan (Appellant)
M Condon (Respondent)
Solicitors:
Tsolakis Solicitors (Appellant)
Minter Ellison (Respondent)

File Number(s): 2006/260173
Decision under appeal

Citation:

Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461

Date of Decision:

2011-05-19 00:00:00

Before:

Slattery J

File Number(s):

2006/260173

Judgment

BEAZLEY JA: I agree with Meagher JA.

MACFARLAN JA: I agree with Meagher JA.

MEAGHER JA: This is an appeal from a judgment of Slattery J: Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461. The respondent (Mr Bablis) practises as a chiropractor in Sydney's central business district and in Double Bay. Between September 1999 and August 2006 the appellant (Mr Levy) was a patient of Mr Bablis' Double Bay practice. They also shared a common interest in investment. Over the years they spoke about investment opportunities which they could pursue themselves or introduce to others, in some cases so as to earn a commission.

In June and October 2005 Mr Levy paid away a total of $1m to a Mr Brendan O'Dowd or a company associated with him, United Producers & Associates Pty Ltd (UPA). That money was "invested" in what was described as a "private placement" transaction and has never been repaid. That investment almost certainly involved an underlying transaction which was fictitious and fraudulent. The primary judge described such a "private placement" transaction in the following terms (at [5]):

"A "private placement" is said to be a risk-free deposit with a reliable U.S. or European bank, which deposit could be used for the bank's purposes but which nevertheless could generate the startlingly attractive risk-free return of 100% per annum. For such a high rate of return the depositor was required to leave the private placement with the European or U.S. bank for a full 12 months, at which time the principal and interest would be repayable."

Mr Levy brought proceedings against Mr Bablis and UPA. He sued Mr Bablis for breach of contracts of loan, breach of fiduciary duty, misleading or deceptive conduct and negligent misstatement. He sued UPA for breach of contracts of loan. The primary judge delivered judgment on 19 May 2011. Mr Levy's action against Mr Bablis failed on each pleaded claim. He succeeded in his action against UPA.

The ground of appeal

Mr Levy appeals from the judgment in favour of Mr Bablis. The only ground of appeal in the Second Further Amended Notice of Appeal is:

"The judgment under appeal was occasioned by a substantial injustice and is flawed by reason of the unavailability of admissible and credible evidence, which could not have been discovered by the exercise of reasonable diligence before the trial. The fresh and further evidence is of such probative value and significance that, taken with the evidence given at the trial, it will in all probability be decisive of the issues between the parties and result in a different verdict."

The orders sought are that the judgment of the Court below be set aside and that the proceedings be remitted for a new trial of the issues between Mr Levy and Mr Bablis. In oral argument before this Court it was accepted on behalf of Mr Levy that any new trial could not include a rehearing of his claims against Mr Bablis for breach of contract.

The "admissible and credible evidence" which Mr Levy relies on falls into four parts. They are:

(1) Evidence as to Mr Levy's attendance at the State of Origin rugby league football game held in Sydney on 15 June 2005. That evidence is of Mr Levy and Mr Damien Alexiou. It concerns matters which occurred before the hearing at first instance. A report of a consultant psychiatrist, Dr Jonathan Phillips, is also relied upon in relation to whether this evidence was available on the exercise of due diligence.

(2) Evidence as to Mr Bablis' relationship with Mr O'Dowd between 2001 and 2005 and his knowledge of investment opportunities and transactions in which Mr O'Dowd had been involved. That evidence is of Ms Sandra Richards and Ms Elizabeth Orchard. It also concerns events which occurred before the hearing.

(3) Evidence as to dealings between Mr Bablis and Mr Nikytas Petroulias. Mr Bablis had contact with Mr Petroulias between about February and August 2005 and later between February and October 2011. The evidence as to the dealings in 2005 is evidence of Mr Petroulias. The evidence as to the events in 2011 is evidence of Mr Petroulias, Ms Despina Bakis and Mr Ian Daley. There is also some documentary evidence.

(4) Evidence concerning a transaction entered into by Sherwood Group Pty Ltd (Sherwood) in February 2002 involving an amount of US$5m paid to Dresdner Bank Schweig AG (Dresdner Bank) in Zurich. That evidence consists of a number of documents produced by a law firm, Hardings, in answer to a subpoena, evidence of Mr Noel Collett and a document produced by Mr Collett. It concerns matters which occurred well before the hearing.

Mr Levy accepts that the findings of the primary judge were justified on the evidence before his Honour. And he does not submit that the observations of the primary judge as to his credibility were not justified. However, he submits that this further evidence demonstrates that some of the evidence given by Mr Bablis was untrue and would have made his (Mr Levy's) version of events more probable and most likely to have been accepted. In the notice of appeal he identifies specific evidence of Mr Bablis (given by affidavit and in cross-examination) which is said to be contradicted by facts established by the further evidence. Mr Levy also submits that the further evidence concerning the events of 15 June 2005 (when he says he attended the State of Origin match) demonstrate that he could not have had a critical telephone conversation with Mr O'Dowd as maintained by Mr Bablis and found by the primary judge.

These arguments are made without the Court having before it all of the evidence which was before the primary judge. The material reproduced in appeal books and placed before this Court was the transcript of the hearing (including of the oral evidence) and copies of the affidavit evidence. It did not include, with one or two exceptions, any of the six volumes of documents which were admitted into evidence as part of the evidence in chief of Mr Levy and Mr Bablis. A number of those documents are referred to and relied upon by the primary judge in support of findings that he made. Those findings include critical findings as to whether there were particular conversations between the parties in the terms alleged by Mr Levy.

Relevant principles

Section 75A(7) of the Supreme Court Act 1970 permits the Court to receive further evidence on appeal. Because this appeal is from a judgment after a hearing on the merits, the Court cannot receive further evidence on matters other than those "occurring after the hearing" unless there are "special grounds": s 75A(8), (9). Except for part of the evidence in the third of the parts described above (the Petroulias dealings), the evidence relied upon concerns matters which occurred before the hearing at first instance.

The power to admit further evidence on appeal exists to serve the interests of justice in preventing a substantial wrong. In relation to evidence of matters which have occurred before the hearing, it may only be exercised in circumstances which are sufficiently out of the ordinary or exceptional to answer the description "special grounds". That is so because, in relation to such matters, there is a competing interest in bringing suits to a final end. In D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 the plurality, (Gleeson CJ, Gummow, Hayne and Heydon JJ) said at [34] and [35]:

"[34] A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few narrowly defined, circumstances. ..."

"[35] The principal qualification to the general principle that controversies, once quelled, may not be reopened is provided by the appellate system. But even there, the importance of finality pervades the law. Restraints on the nature and availability of appeals, rules about what points may be taken on appeal and rules about when further evidence may be called in an appeal (in particular, the so-called "fresh evidence rule") are all rules based on the need for finality. As was said in the joint reasons in Coulton v Holcombe:

'[I]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial.'"

Although the discretionary power in s 75A(7) as qualified by s 75A(8) and (9), is not defined by reference to earlier common law principles, those principles remain relevant to its exercise because their development was also informed by the need to resolve the tension between these two competing interests. Those principles generally require that three conditions be met before fresh evidence can be admitted. They are that the evidence could not have been obtained with reasonable diligence for use at the trial, that the evidence be such that there is a high degree of probability that there would be a different verdict and that the evidence must be credible. Nevertheless, whilst these considerations remain relevant, they are not to be treated as the only considerations which may be addressed and it is not necessary that in every case each be satisfied: see Akins v National Australia Bank (1994) 34 NSWLR 155; Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116; Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64; and Tjiong v Tjiong [2012] NSWCA 201.

In a case such as the present, where it is said that the further evidence requires a new trial, the Court is also asked to exercise its power under s 75A(10). The exercise of that power is subject to UCPR r 51.53(1) which provides that the Court must not order a new trial unless it appears that some "substantial wrong or miscarriage" has been occasioned.

In this connection, in CDJ v VAJ [1998] HCA 67; 197 CLR 172 at [111], the plurality (McHugh, Gummow and Callinan JJ) observed of a power to admit further evidence on an appeal by way of rehearing:

"Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial."

There, unlike the position under s 75A, the power of the Full Court of the Family Court to receive fresh evidence on appeal was not expressed to be limited by requiring that there be "special grounds": CDJ v VAJ at [107].

This observation by the High Court in CDJ v VAJ reflects earlier statements by Latham CJ (at 635) and Dixon J (at 640, 642) in Orr v Holmes [1948] HCA 16; 76 CLR 632. Those statements concerned the common law rules governing the admission of fresh evidence which, as I have said, remain relevant whilst not being determinative of the scope of the statutory discretion given by s 75A(7). More recently, in Clodumar v Nauru Lands Committee [2012] HCA 22; 86 ALJR 697, the majority said of the exercise of a power to receive new evidence on appeal:

"[34] It is not necessary for present purposes to explore the limits of that power in an appeal against a decision of the Supreme Court of Nauru in its original jurisdiction. It suffices to say that the procedures of the common law courts provide an appropriate analogy and that this court can receive evidence, properly characterised as fresh evidence, for the purposes of such an appeal. Acknowledging the variations of phraseology which have been used, Dixon J in Orr v Holmes said:

"The fact which the new evidence tends to prove, if it does not itself form part of the issue, must be well nigh decisive of the state of facts upon which the issue depends. The evidence must be so persuasive of the existence of the fact it tends to prove that a finding to the contrary, if it had been given, would, upon the materials before the court, appear to have been improbable if not unreasonable."

Further, the applicant for a new trial must show that no reasonable diligence upon his part would have enabled him or her to adduce the evidence upon the former trial."

In D'Orta-Ekenaike v Victoria Legal Aid at [35] the plurality cited with approval the passage from Coulton v Holcombe emphasising the fundamental need for issues ordinarily to be settled at the trial. That passage also was cited by this Court (Handley AJA, with whom Beazley and McColl JJA agreed) in Preston v Harbour Pacific Underwriting Management Pty Ltd [2008] NSWCA 216, albeit in the context of an application to adduce fresh evidence governed by common law principles, where it was said at [25]:

"The requirement for the exercise of reasonable diligence reflects the principle that there must be an end to litigation and recognises that the pursuit of perfect justice can come at too high a price if it prolongs litigation with its attendant cost, inconvenience, and uncertainty. It prevents parties who have gone to trial under-prepared being rewarded for their lack of diligence with a second chance before another jury. The trial of an action is not a dress rehearsal for a second trial, or for a rehearing in an appellate court with additional evidence".

These observations apply equally to the exercise of the statutory power given by s 75A(7), (8) and (9).

The proceedings before the primary judge

Before addressing Mr Levy's arguments concerning the further evidence, it is necessary to understand the issues in the proceedings and the way in which those issues were resolved by the primary judge. Looking at the matter generally, Mr Levy's case was that Mr Bablis gave him advice, and made representations, with respect to the desirability and reliability of "private placements" during the course of medical consultations over the period from 2002 to 2005 and that he relied upon that advice. Mr Bablis' case was that he had conversations with Mr Levy about that subject, passed on information which he had received from Mr O'Dowd, did not endorse the correctness of that information and did not give advice or take on the role of an adviser. Ultimately, the primary judge preferred, with qualifications, the evidence of Mr Bablis relevant to these issues.

The pleaded claim

Mr Levy pleaded the following claims against Mr Bablis. First, that two amounts of $500,000 were lent to him on terms which required their repayment after one year together with interest of 100 per cent. The other pleaded terms included that each sum would be placed "in an account with a major bank in Europe or the USA and that the moneys would not leave the account"; and that the advance would be "completely safe", "carry absolutely no risk", "be 100% secure", "be risk free" and "never be at risk".

Secondly, there were claims for breaches of fiduciary duty, misleading or deceptive conduct and negligent misstatement. It was alleged that by reason of their chiropractor-patient relationship, Mr Bablis was in a position of influence over Mr Levy who in turn reposed trust in him and that as a result Mr Bablis owed Mr Levy fiduciary duties not to make a profit or be in a position of conflict of interest or duty. Mr Bablis was alleged to have breached those duties because he had an "interest" in the two transactions by which Mr Levy paid away $1m. To the extent that those transactions involved loans or payments to UPA or Mr O'Dowd, rather than to Mr Bablis, the nature of the "interest" which Mr Bablis was alleged to have had was not pleaded.

The claims of misleading or deceptive conduct and negligent misstatement were based on one or more of three conversations between Mr Levy and Mr Bablis said to have occurred in November 2002, August 2004 and June 2005, when the first payment of $500,000 was made. It was alleged that three groups of representations, described by the shorthand terms the Future Representations, the Present Representations and the Contract Representation, were made by or during these conversations. It was also alleged that when those representations were made Mr Bablis knew that Mr Levy would act in reliance upon them and intended that he do so. On that basis it was alleged that Mr Bablis owed a duty of care not to make them if he had no reasonable basis for believing that they would be fulfilled or no intention of "procuring" their fulfilment.

The Future Representations were that moneys advanced by Mr Levy would be used in a private placement with a major European or US bank, would be placed in a bank account with such a bank and would not leave the account; that those moneys would be completely safe, carry absolutely no risk, be 100 per cent secure, be risk free and never be at risk; and that Mr Levy would receive a 100 per cent return after 12 months. Those representations were alleged to have been made from November 2002 to December 2005. The Present Representations were that Mr Bablis was the signatory of the bank account in which the moneys would be held; that Mr Bablis had invested $500,000 in a "private placement" and doubled his money in 12 months; and that Mr Bablis had established a non-profit medical research facility based at Oxford University through which to organise these investments. These representations are alleged to have been made from August 2004 to June 2005. The Contract Representation was that there were binding and enforceable contracts between Mr Levy and Mr Bablis on the terms alleged in Mr Levy's claim in contract. That representation was alleged to have been made from June to December 2005.

Mr Bablis denied each of these claims. In the alternative to the claims in contract against Mr Bablis, Mr Levy alleged loan agreements in the same terms with UPA and breaches of those agreements by failure to repay the moneys advanced.

Mr Levy's evidence

Mr Levy gave evidence of three conversations with Mr Bablis which occurred in about November 2002, August 2004 and June 2005. That evidence was the basis for the pleaded claims.

The first conversation, which allegedly took place during a treatment in about November 2002, was said to involve the following statements by Mr Bablis:

"I can double your million dollars in 12 months in a Private Placement with a major European or US Bank. This investment is not open to the public, but only to a privileged few who are generally very wealthy and high up in the banking world. It would be extremely difficult for you to understand the complexity of how it works. This placement is completely safe. All you need to know is that it returns 100%, carries absolutely no risk and runs for 12 months.

I have a close friend, Brendan O'Dowd, who has access to the investment.

I first met Brendan in 1999 when he came in for a treatment as one of my patients. ... He said he would give me a million dollars if I could make him walk again without his stick. So I treated Brendan and fixed him of his problem and then Brendan paid me $1m!!"

The second conversation was during a treatment session in August 2004 in which Mr Bablis was alleged to have said the following:

"Stop. I can get you 10% per month for 12 months in a private placement where the money is never at risk. The way it works is that major banks in Europe or the USA offer contracts to place your money in one of their accounts for a period of 12 months. You can't touch you money over the course of the investment but the money doesn't leave the account and it returns 100%.

The banks can leverage off these funds tenfold and use them for home loans, that is why the return is so high. The banking system is all done on paper transactions, this is why the funds don't leave the account. They just have to show they have them available on their ledger.

This offer is not open to the public. It's generally open to only very wealthy individuals high up in the banking world.

Brendan O'Dowd advised me to set up a non-profit medical research facility in London, to use as a vehicle in which to run the placements through. The research facility is based at Oxford University. Boy, it cost me a hell of a lot of money to set up, but now I can run my own placements."

And later in the same conversation:

"I recently did a placement, personally for $500,000 and doubled my money in twelve months. I used the money to pay off my father's mortgage because he has cancer and I didn't want to feel bad if anything happened to him."

As is noted above, Mr Levy made his first payment of $500,000 in June 2005. A significant issue between Mr Levy and Mr Bablis was whether they had conversations leading to this payment on 15 and 17 June 2005, as asserted by Mr Bablis, or only on 17 June 2005, as maintained by Mr Levy.

Mr Levy's evidence was as to a conversation on 17 June 2005 in the following terms:

Levy: "I am leaving for overseas tomorrow."

Babis: "Julian, thank you for helping me out with my loan. I would like to offer you to enter into a private placement for $1m."

Levy: "I would be interested but I currently only have $500,000 available with a further $500,000 due any day now."

Bablis: "That's fine - you can start the initial investment with $500,000 and add on the other $500,000 later if you choose.

The placement will start on 1 July and you will have the $500,000 plus the other $500,000 back to you on 30th June 2006.

I can access the account at any time, because I am the signatory on the account, however if you need your funds back prior to 12 months, it can be done, but you will be penalised heavily interest wise."

Levy: "Pete, I understand, but I definitely will be able to leave the funds there for 12 months."

The reference to "my loan" was to an advance of $175,000 which Mr Levy had made to Mr Bablis in two tranches in February and March 2005. That loan was repaid in late July 2005. None of this was controversial between Mr Levy and Mr Bablis.

Before the second payment, which was made at the end of October 2005, Mr Levy alleged a telephone conversation with Mr Bablis in the following terms:

Levy: "It's finally settled with Van Nguyen. I've arranged for my lawyers in Queensland to transfer the funds to the UPA account."

Bablis: "Do you need the account information?"

Levy: "No, I've still got the details from before. I just want to confirm it is for 12 months, and it's returning 100%, and risk free."

Bablis: "That's right."

The reference to "Van Nguyen" was to an advance of $500,000 which Mr Levy had made to Dr Van Nguyen Pty Ltd in January 2005 for a term of three months at 5 per cent per month. That loan was repaid late and at the end of October 2005.

Mr Bablis' evidence

Mr Bablis denied the conversation alleged to have occurred in about November 2002. He also said he did not meet Mr O'Dowd until late 2002 or early 2003, that Mr O'Dowd did not make any pledge to pay $1m until about August 2003 and that Mr O'Dowd had never made that pledge good. Mr Bablis also denied the conversation alleged to have occurred in August 2004. He said that he did not have, and Mr O'Dowd did not advise him to set up, a non-profit medical research facility in London. Mr Bablis denied the alleged conversation on 17 June 2005. He said he did not have, and did not say he had, access to any UPA account or that he was a signatory to any UPA account. He also denied the conversation alleged to have occurred in late October 2005.

As to his relationship with Mr O'Dowd, Mr Bablis said that he first met him in late 2002 or early 2003 and that he spoke to him about investment opportunities "such as private placement investments and currency conversion schemes". He said he sometimes understood what Mr O'Dowd was saying and that at other times he did not. Mr Bablis said that in those conversations he was told the following about private placements: you could only enter by invitation; the minimum investment was US$10m or above; the term was determined by the bank trader but was usually 12 months; the money was safe because it stayed in the client's account; the trader somehow "blocked" the money to do a trade; and the returns were attractive and greater than the commercial rate available.

Mr Bablis said that on the basis of his discussions with Mr O'Dowd he believed what he had been told. He said he also had a conversation with Mr O'Dowd in which he told Mr O'Dowd that he (Mr Bablis) had seen warnings on the internet that some of these investments were "scams". In response Mr O'Dowd told him that there were "a lot of fraudulent people out there" and that "you've got to be careful. You need to be with the right people". Mr Bablis said that he believed Mr O'Dowd was "the right people". He denied ever having invested with Mr O'Dowd or being involved in any of "his transactions". He said that in early 2005 Mr O'Dowd had told him that he had set up a company, UPA, which was to be managed by a Mr John Bettini and that following this he received a series of emails from Mr Bettini attaching various investment opportunities. These included fairly orthodox proposals to invest in existing and operating businesses and franchises.

Mr Bablis accepted that between December 2004 and June 2005 he had discussions with Mr Levy about Mr O'Dowd and the "private placements, currency conversions and hedge funding" which he said he was involved in. Mr Bablis said that he repeated to Mr Levy what Mr O'Dowd had explained to him about those investments, making clear that it was "what I've been told by Brendan". He also said that he told Mr Levy to do his own checks as he (Mr Bablis) did not have a depth of knowledge in those areas.

Mr Bablis' evidence as to what happened in June 2005 was that in a conversation on 15 June during a treatment session Mr Levy raised the question of private placements. Mr Bablis suggested that he speak to Mr O'Dowd direct. He then called Mr O'Dowd on his mobile telephone and handed the phone to Mr Levy who spoke to Mr O'Dowd. According to Mr Bablis, that conversation took place just after 6.00pm on 15 June 2005. They had a further conversation on 17 June by which time, according to Mr Bablis, Mr Levy had decided to invest money with Mr O'Dowd. He requested Mr Bablis to get details of Mr O'Dowd's account. Mr Bablis telephoned Mr O'Dowd. A fax containing UPA's bank details was received at 10.33am. On that or the following day, Mr Levy transferred $500,000 to a UPA account with the Commonwealth Bank conducted at a branch in Brisbane.

Mr Bablis denied that he had any conversation in October 2005 with Mr Levy about any further investment with Mr O'Dowd or UPA. On 28 October 2005 he received an email which referred to money paid into UPA's account. Later he became aware that a further $500,000 had been invested.

Findings of the primary judge

The primary judge made findings as to the credibility of Mr Levy and Mr Bablis. He described them as "most unsatisfactory witnesses" because "each was dominated by self-interest and by a sense of betrayal of each by the other": [63]. He regarded Mr Levy as someone whose evidence "could not be accepted on important events on the history and also on simple issues only relevant to credit". He described Mr Bablis as "a little more credible than Mr Levy": [69]. He found that Mr Levy had memorised his evidence: [67].

The primary judge rejected Mr Levy's evidence as to the conversation in November 2002: [75]. He considered it improbable that there was a conversation in those terms at that time. He found that there was "some discussion at the time ... about the characteristics of private placements and about Mr O'Dowd in the context of Mr Levy investing the proceeds of sale of the restaurant, but no more": [75].

The primary judge also did not accept Mr Levy's evidence as to the conversation in August 2004: [79]. He accepted Mr Bablis' evidence that he had not set up a non-profit medical research facility in London to run placements through and noted that there was no evidence that Mr Bablis "did organise private placements of any kind through such a facility": [80]. He concluded that there "probably" was some discussion between Mr Bablis and Mr Levy at this time about the subject of private placements but not in the terms suggested by Mr Levy: [82].

In relation to the payment made in June 2005, the primary judge accepted Mr Bablis' evidence that there were conversations on 15 and 17 June 2005. Although he considered that there were difficulties in the timing of Mr Bablis' version of events, the primary judge accepted Mr Bablis' account that Mr Levy spoke to Mr O'Dowd directly on the telephone on the evening of 15 June 2005: esp [129]-[130].

The primary judge also accepted Mr Bablis' evidence that he was not consulted at all by Mr Levy in late October 2005 about the second investment of $500,000: esp [166]-[172]. In that context, the primary judge observed at [172]:

"Finally, even the objective facts about the October 2005 transaction assist the Court to infer that Mr Levy spoke to Mr O'Dowd in the June 2005 transaction. Mr Levy dealt with Mr O'Dowd directly in October. He did so in a way that did not acknowledge Mr Bablis having an interest in the transaction at all. Mr Levy does not even pretend to be transacting with Mr Bablis in October. It is clearly directly with UPA and Mr O'Dowd."

There were two further matters which the primary judge relied upon as confirming in relation to both investments, that Mr Levy had dealt directly with Mr O'Dowd rather than through or with Mr Bablis. The first involved a Mr Banovec and the second a Mr Schlederer.

Mr Banovec was a friend of Mr Levy and another person with whom he discussed his investment decisions: [238], [240]. Mr Levy was overseas from 18 June 2005 and remained so until February 2006: [147]. On 10 January 2006 Mr Levy sent an email to Mr Banovec inviting his advice on a "private placement" investment opportunity which Mr Levy portrayed as a potential opportunity rather than as one that he had already taken. In that email, Mr Levy said:

"I have been offered this opportunity by an associate of a very close friend. I have been aware of the investments for 3 years. I am very interested to see if you have heard of such an offering."

The primary judge found that Mr Levy wanted the benefit of Mr Banovec's advice for his future dealings and that the "opportunity" was a "thinly disguised profile" of the June and October 2005 transactions. His Honour did not find persuasive Mr Levy's resistance in cross-examination to the proposition that the reference to the "very close friend" in the email was to Mr Bablis and that the reference to the "associate" was to Mr O'Dowd: [182].

Mr Schlederer, a school friend of Mr Levy, also worked as a chiropractor in Mr Bablis' Double Bay clinic: [31]. He gave evidence that in a conversation in February 2009 Mr Levy told him that he (Mr Levy) had "invested $1m with Brendan O'Dowd and the money is gone. Peter [Bablis] introduced me to Brendan". Mr Levy challenged this version of the conversation. However, the primary judge accepted Mr Schlederer's evidence that there was a conversation to this effect: [267], [270]-[272].

The primary judge dealt separately with each of Mr Levy's pleaded claims. He concluded that the "contemporaneous documentary evidence and the Court's findings as to the oral evidence only support a contract between Mr Levy and UPA": [279]. He gave a number of reasons for doing so: [280]-[284]. They included that various documentation passing between UPA and Mr Levy was inconsistent with a loan of the funds by Mr Levy to Mr Bablis.

His Honour also held that there was no fiduciary relationship between Mr Bablis and Mr Levy with respect to the subject matter of the June and October 2005 transactions: [289]. He made specific findings that there was no advance by Mr Levy to Mr Bablis, that Mr Bablis did not undertake to be signatory to any account in which the funds were held, that Mr Bablis did not guarantee the security or return of the funds and that Mr Bablis did not assume a role as financial adviser to Mr Levy in relation to these transactions: [312]. Each of these findings is based to a significant extent on the dealings between Mr Levy and Mr Bablis between June and December 2005. Those dealings, in turn, were partly the subject of evidence from Mr Levy and Mr Bablis and partly consisted of email and other communications between them and UPA or Mr O'Dowd. The primary judge also found that Mr Levy had not established that Mr Bablis had any interest in the transactions - in the form of an interest in UPA - or that he stood to gain from them in some other way: [319], [320]. For that reason, his claim that there was a breach of any fiduciary duty would also have failed.

The primary judge found that the Future Representations were not made out because he preferred Mr Bablis' versions of the conversations in November 2002, August 2004 and June 2005: [324]. Although Mr Bablis may have described "private placements" and the claims made by their proponents, such as Mr O'Dowd, he did not make any unqualified statements for himself and made clear to Mr Levy that he was describing what he had been told by others: [325]. His Honour also found that the Present Representations were not made out: [327]; that Mr Bablis had not and did not say that he had invested $500,000 and doubled his money in twelve months: [327]; and that Mr Bablis did not say that he was a signatory to the bank account into which any moneys would be paid: [328]. This last finding was based, in part, on the absence of any complaint by Mr Levy to Mr Bablis about that subject when the first default occurred in the repayment of the money: [328]. The primary judge also found that the Contract Representation was not made out: [329].

Finally, the primary judge rejected the negligent misstatement claim. He found that the conversations deposed to by Mr Levy were "not couched as advice"; that Mr Bablis did not take on an advisory role; that the relationship was one involving the mutual exchange of information; and that Mr Bablis did not assume responsibility to provide advice to Mr Levy: [331].

As I have already noted, none of these findings of primary fact or conclusions of the primary judge is challenged as not available or otherwise wrong on the evidence led before the primary judge. The success of Mr Levy's application for a new trial depends principally on whether he can establish that the further evidence would have produced a different result if it had been available at the trial: CDJ v VAJ at [111].

Evidence as to attendance at State of Origin rugby league football game on 15 June 2005

The further evidence

Mr Levy was diagnosed with Lyme's Disease in August 2006. He says the symptoms of that disease include memory loss and an inability to concentrate. In June 2011 whilst watching the State of Origin rugby league game on television, he recalled that in 2005 he was with his friend Mr Alexiou at the same game. In that year, that game was held in Sydney on 15 June.

Dr Phillips is a consultant psychiatrist. He was asked to express opinions concerning Mr Levy's mental and cognitive state at the time of and prior to the hearing before the primary judge. He was asked to assume a medical history which included the diagnosis of Lyme's Disease. He was also provided with a draft affidavit of Mr Levy which referred to his subsequent recollection of his attendance at the football game. In answer to the question how, if at all, Mr Levy's condition would have affected his capacity to instruct his solicitors to identify the existence of evidence which might either support his case or rebut that of Mr Bablis, Dr Phillips responded:

"24. Given the above to be the probable situation, Mr Levy would have been significantly challenged in a cognitive sense at the time of the previous Court hearing.

25. Specifically, it is likely that Mr Levy would have continued to experience confusion (global impairment of cognition) in keeping with his comments, and what is known to occur in Lyme's Disease. He is likely to have experienced problems of concentration and memory, again in keeping with his comments and in keeping with the recognised cerebral symptoms of Lyme's Disease.

26. However, the material to be found at [in] the affidavit is important, and makes clear the unreliable nature of Mr Levy's memory, particularly that memory sometimes will only return in response to a particular trigger.

27. This suggests strongly that Mr Levy has had problems with the normal workings of his memory, and this is likely to have impeded him considerably at the time of his trial.

28. I doubt, in such a situation, that comments made by Mr Levy at the time of legal proceedings could have been accepted as reliable, or even accurate."

Dr Phillips was not cross-examined on these opinions.

In his affidavit, Mr Alexiou says that he attended the game played in Sydney on 15 June 2005 with his father and with Mr Levy. His evidence is that Mr Levy arrived at his home at Erskineville somewhere between 6.00pm and 6.30pm on that evening, that after 6.30pm he travelled with Mr Levy and his father to the stadium at Homebush and that they arrived at the ground at about 7.30pm.

There is no evidence as to how long it takes to drive from Double Bay to Erskineville in heavy or other traffic conditions or as to what the traffic conditions were like at 6.00pm on that Wednesday evening or on any Wednesday evening at that time. (In an affidavit sworn on 12 December 2011 which was not read or relied upon in the hearing of the appeal, Mr Levy had stated that according to Google Maps directions search online it takes about 15 minutes to travel from Woollahra to Erskineville.) Mr Alexiou's evidence is that the journey from Erskineville to Homebush took about an hour.

Consideration

Mr Levy submits that the evidence as to his attendance at the football game was not led at the hearing because he had an unreliable memory and did not recall that he had attended the event. He says that his poor memory was in turn due to his suffering from Lyme's Disease. For that reason, he argues that the failure to adduce the evidence was not due to any absence of "reasonable diligence" on his part.

It is pointed out on behalf of Mr Bablis that the fact of Mr Levy's medical condition and that it resulted in "a perceived lack of mental clarity and from debilitating mental and physical fatigue" must have been known to his legal advisers at the time of the hearing and was the subject of a finding by the primary judge: [29]. It is said that this gave rise to a need, where possible, to corroborate Mr Levy's evidence and that his advisers sought to do that. They subjected Mr Levy's movements and those of Mr Bablis to close analysis taking into account contemporaneous records of telephone conversations and their appointments: see esp [126] where the reference to "Mr Levy's astute electronic detective work" is to work presumably undertaken by Mr Levy or his legal representatives.

This Court has not been provided with any explanation as to what other inquiries were made by Mr Levy or his legal representatives to determine his movements on the afternoon and evening of 15 June 2005. The significance of Mr Levy's movements on that day was appreciated and the fact that he may have had difficulties in recollection must also have been appreciated. For example, it is not known whether Mr Levy's mobile telephone calls for that evening were analysed to identify his whereabouts at various points of time during the evening. Such an analysis may have shown that he was in the Homebush area for some part of the evening. Also, it would be surprising if attempts were not made to determine Mr Levy's movements in the early evening, especially having regard to what was done to do so for the earlier part of that day. However, the Court has no evidence of what was done and whether, and if so what, other contemporaneous material may have been considered or followed up. In the absence of any explanation as to what was done, this Court cannot confidently conclude that the evidence as to Mr Levy's attendance at Homebush could not have been obtained for use at the hearing by the exercise of reasonable diligence on his part and on the part of his legal representatives: Hampson v Hampson [2010] NSWCA 359 at [34]-[38]. Dr Phillips' evidence does not contradict this conclusion.

It is also relevant to consider whether the further evidence relied upon is credible. The evidence of Mr Alexiou was not challenged and is credible in the sense that it could reasonably be accepted as true. However, that is not the end of the matter because that evidence is given six years after the event from a recollection unaided by contemporaneous material and is not exact as to the times that Mr Levy arrived at Erskineville or as to the times the group left Erskineville and arrived at Homebush.

As has already been noted, there was a dispute as to whether there was any conversation between Mr Levy and Mr Bablis, and then between Mr Levy and Mr O'Dowd, on 15 June 2005. The primary judge accepted aspects of Mr Bablis' version of events on that day. His findings (at [128]) were:

"[128] ... I find that: Mr Levy did have a conversation with Mr Bablis about investments earlier that day, possibly about lunch time or as late as 2.00pm; the conversation was not very lengthy; Mr Bablis did invite Mr Levy to speak to Mr O'Dowd directly; the conversation at the Clinic was interrupted for Mr Levy's dental appointment; Mr O'Dowd was not telephoned before Mr Levy went to the dentist; Mr Levy returned to the Double Bay clinic at about 6.00pm; Mr Bablis was then on the telephone; when Mr Bablis finished on the telephone, he telephoned Mr O'Dowd directly and gave the telephone to Mr Levy; Mr Bablis then left the room."

It is submitted on behalf of Mr Levy that if the evidence of Mr Alexiou had been available at the hearing it would have "demonstrated that [he] was, on the balance of probabilities, unable to participate in a conversation that took place on 15 June 2005". It is necessary to test that proposition against the other evidence before the primary judge.

That evidence was that Mr Bablis used his mobile telephone to call Mr O'Dowd. His phone records indicated a call to Mr O'Dowd's number at 6.06pm. The duration of that call was 4 minutes 35 seconds. Mr Bablis' evidence was that he left the room while Mr Levy spoke to Mr O'Dowd and that he returned to the room some 5 or 10 minutes later. He could not remember the exact time which had elapsed.

On this evidence, Mr Levy could have left Mr Bablis' clinic by 6.15pm and driven to Erskineville. There was no evidence as to how long that drive should have taken. Mr Alexiou's evidence was that Mr Levy arrived there "somewhere between 6.00 and 6.30pm". That evidence is itself imprecise. It does not exclude the possibility that Mr Levy arrived at 6.40pm or thereabouts and that the group arrived at Homebush at 7.40pm or thereabouts. It therefore does not demonstrate that Mr Levy was unable to participate in the conversation with Mr O'Dowd and attend the football game.

It follows that it is not established that this further evidence would have produced a different result on this issue and a different outcome to the trial, had it been available at the hearing. Where that is the position and the Court cannot be satisfied that the evidence could not have been obtained by the exercise of reasonable diligence, the interests of justice do not require that Mr Bablis be deprived of the benefit of his judgment because of its subsequent discovery.

Evidence of the relationship between Mr Bablis and Mr O'Dowd before 2005

The evidence of Ms Richards

Ms Richards' evidence consists of a statutory declaration sworn on 11 December 2011, a statutory declaration sworn on 10 February 2012, a signed statement dated 11 September 2005 and Ms Richards' oral evidence. That evidence is that in April 2002 she and her husband invested $350,000 with Mr O'Dowd. The evidence does not establish the terms of that investment other than that the Richards were to receive "weekly returns" on their investment within 12 weeks. The funds were to be used with other funds to invest in a "$20M deal" and the Richards were to receive a "substantial return within 3 months". In one of her declarations Ms Richards describes the investment as being in a "private placement". The evidence does not explain what she meant or understood by that description. However, her other evidence suggests that this investment did not have the same characteristics as the "private placement" investment described to Mr Levy by Mr Bablis. One of the persons who introduced Mr O'Dowd to the Richards was Ms Orchard.

Ms Richards and her husband met Mr Bablis for the first time in September 2003 and in a professional capacity. They were introduced to him by Mr O'Dowd. Ms Richards mentioned to Mr Bablis during a consultation that she had invested money with Mr O'Dowd. She could not remember the exact words of her conversation with Mr Bablis. He made no response other than to say that he knew Mr O'Dowd and had treated him. Ms Richards saw Mr Bablis again in October 2003 and in early 2004. She was concerned to find out where Mr O'Dowd was and what he was doing. However, she did not give Mr Bablis any detail about her investment and did not obtain any information from him about Mr O'Dowd. Later in 2004 she telephoned Mr Bablis on occasions when she was unable to contact Mr O'Dowd. Mr Bablis gave her a telephone number and sometimes said he would contact Mr O'Dowd. Subsequently Mr O'Dowd would telephone her back. Ms Richards did not tell Mr Bablis why she wanted to contact Mr O'Dowd.

By September 2005 Ms Richards and her husband had not received repayment of their investment. They made a complaint to the Queensland Police Service. At that time Ms Richards made her statement dated 11 September 2005. In that statement she identifies Mr Bablis as one of the persons to whom she had spoken who had said that Mr O'Dowd was "legitimate". In that statement Ms Richards says that she and her husband invested $350,000 with Mr O'Dowd and that she did not know what investment he was proposing for the funds other than that it was "international in nature" and probably "a twenty million dollar deal".

In late September and early October 2005 Mr Bablis telephoned Ms Richards on two occasions to ask her to withdraw the complaint to the police because it was making it difficult for Mr O'Dowd to obtain a passport. In her oral evidence Ms Richards said she had no discussion with Mr Bablis about the subject matter of the police complaint or their investigation. In her second statutory declaration, in a paragraph which was not objected to, Ms Richards said:

"This current declaration will focus on providing additional details for a series of events in 2005 and 2006 which followed an initial phone call from Peter Bablis on or about 21st September 2005 asking us to stop a police complaint about an investigation into Brendan O'Dowd's apparent and ongoing deceptions as well as repeated false promises in his dealings with us over many years."

This paragraph is ambiguous as to whether the request from Mr Bablis in its terms indicated a knowledge by him of the subject matter of the investigation consistent with Ms Richards' description of it as relating to Mr O'Dowd's "apparent and ongoing deceptions as well as repeated false promises". Ms Richards' oral evidence was that this subject was not discussed in her conversations with Mr Bablis.

Finally, in cross-examination Ms Richards agreed that her declarations and statement had been put together with the assistance of her husband's diaries, the recollections of her financial adviser, a Mr Buck, and with the assistance of her son. No documents were tendered to corroborate Ms Richards' evidence or to establish the precise nature of the investment made with Mr O'Dowd or the details of the alleged "deceptions" and "false promises" said to have been made by him.

The evidence of Ms Orchard

Ms Orchard gave oral evidence. She was introduced by Mr O'Dowd to Mr Bablis and told him that she had heard about "the foundation that you're going to set up together". There was discussion about humanitarian projects being funded through a "private placement program". Nothing was said as to what was involved. Mr O'Dowd said that with the contacts Mr Bablis had there would not be any problem funding the placements. At some point Mr Bablis asked Ms Orchard questions about whether she knew people who had dealt with Mr O'Dowd. She responded that she did not but that she knew what he was talking about and how these investments worked because her "husband had been a banker so he had also heard of these programs". Mr Bablis said that he was very excited about having met Mr O'Dowd and was looking forward to "all this funding coming through".

This first conversation or these first conversations were not placed in time. Ms Orchard said that she saw Mr O'Dowd and Mr Bablis together on a number of occasions in 2002 and 2003. That is consistent with the primary judge's finding that Mr O'Dowd first became a patient of Mr Bablis in May 2002: [73]. The reference to a foundation is also consistent with the primary judge's findings that in August 2003 Mr O'Dowd pledged to contribute $1m to the One Research Foundation with which Mr Bablis was associated. The primary judge found that this pledge was never made good: [72].

Ms Orchard gave evidence about attending the Wolper Hospital in Sydney at some time in late 2002. She had a conversation with Mr Bablis about a Mr Peter Lansky in relation to valuable artworks owned by him. Whilst she was at the hospital an envelope was opened which contained a copy of what purported to be Mr Lansky's last will dated 20 August 2002. Mr Bablis had said to Ms Orchard that he was at the hospital because Mr O'Dowd had asked him to meet her there. On a later occasion in 2002 she was present at Mr Bablis' practice at Double Bay when Mr O'Dowd handed Mr Bablis a painting which was described as a "Rembrandt" worth "tens of millions of dollars".

Ms Orchard also gave evidence that in "the latter half of 2002" and in 2003 she started to pass messages to Mr Bablis from people trying to contact Mr O'Dowd. She said there were "dozens" of these conversations in which she would say that she had a message for Mr O'Dowd. She said that in late 2003 she had a conversation with Mr Bablis in which she said:

"I think Brendan's a crook. I think he's - I think he's not performing, he's not keeping any promises to any of the people that he's made - he's given undertakings to and I can't see - I can't see any way that he can be anything but a crook. I think he's defrauding people."

Mr Bablis responded that he could not discuss anything about Mr O'Dowd because he was a patient. Later she recalled a further conversation in which she said of Mr O'Dowd:

"He's just, he's just not doing anything ripping people off, and so he hasn't done anything that he's told to anybody he would do."

Ms Orchard said Mr Bablis responded that he could not discuss anything because Mr O'Dowd was his patient and also that "we're in business together and I can't talk about it". She also maintained that on one occasion she said to Mr Bablis of Mr O'Dowd:

"He's bled me dry. I've been carrying his expenses. I've paid for his vehicle, his phone use."

Ms Orchard said that she had lost her "property" and "everything" as a consequence of having funded Mr O'Dowd. She had no conversations with Mr Bablis about Mr O'Dowd after 2003.

Discussion

Mr Levy did not know at the time of the trial of Ms Richards or Ms Orchard or of any dealings of either of them with Mr O'Dowd or Mr Bablis. He became aware of the existence of those persons following the publication in September 2011 of a newspaper article on the outcome of the proceedings between him and Mr Bablis. That publication resulted in Mr Petroulias and others contacting the journalist who wrote the article. He, in turn, put them in contact with Mr Levy. By that means Mr Levy became aware of and had conversations with Ms Richards in November and December 2011.

There was no evidence as to whether Mr Levy or his solicitors had taken any steps before the hearing to identify and locate other patients of Mr Bablis who may have been introduced to and dealt with Mr O'Dowd before June 2005. On the other hand, it was not suggested on behalf of Mr Bablis that any particular steps were available to be taken and could or should have been taken before the trial to identify any such persons. In circumstances where there was no obviously available way in which Mr Levy and his advisers could have identified those persons and it is not submitted that there were steps which could have been taken, this Court can proceed on the basis that the evidence of Ms Richards and Ms Orchard was not available and could not have been obtained at the trial by the exercise of reasonable diligence.

That evidence is not about any of the dealings between Mr Levy and Mr Bablis either before or after the "investments" made in June and October 2005. In general terms its relevance is said to be that it establishes a knowledge on the part of Mr Bablis of earlier failed investments involving Mr O'Dowd and that Mr Bablis and Mr O'Dowd had a business relationship which extended in some way to those investments. In those respects this evidence is said to be inconsistent with certain evidence given by Mr Bablis and contrary to express findings made by the primary judge. The relevant findings of the primary judge which are particularised in the Second Further Amended Notice of Appeal are at [51], [326] and [335] and are as to the absence of earlier involvement of Mr Bablis in "private placement" transactions and as to Mr Bablis not having any commercial interest in Mr O'Dowd or UPA's businesses. The remaining findings referred to in that Notice of Appeal are findings rejecting aspects of Mr Levy's evidence as to his dealings with Mr Bablis: see esp [323], [324], [325], [331], [333], [335].

The evidence of Ms Richards and Ms Orchard is said to "undermine" the credit of Mr Bablis and make it likely that, had it been available at the hearing, Mr Levy's version of events would have been accepted leading to a different outcome of the trial. The process of reasoning which it is said leads to that conclusion was not explained in Mr Levy's written or oral submissions to this Court. In particular, there was no consideration of the circumstance that the primary judge justified some of his factual findings by reference to documentary material, which was not before this Court either as part of the appeal papers or in evidence, and his Honour's assessment of the probabilities: see, for example, the findings and observations at [168]-[172] in relation to the events in June and October 2005, and at [179]-[182] and [266]-[272] in relation to the Banovec and Schlederer evidence which is referred to above.

It nevertheless remains necessary to address whether the evidence relied upon is credible and whether, if available, it was likely to have produced a different outcome before the primary judge.

It was submitted that Ms Richards' evidence establishes that in 2003 she and her husband had made an investment with Mr O'Dowd which was similar to that made by Mr Levy in 2005; and that by September 2005 Mr Bablis had become aware that their investment had not been repaid and that the police were investigating dishonest or at least questionable conduct of Mr O'Dowd. That submission overstates the effect of Ms Richards' evidence which was very general and lacking in detail, not precise as to times when events occurred and not corroborated or further explained by any contemporaneous documents. That evidence does not establish the nature or terms of the investment which Ms Richards and her husband made with Mr O'Dowd or any company controlled by him. Nor does it establish that Mr Bablis was aware at any time of any particular alleged defaults on the part of Mr O'Dowd or of the subject matter of their complaint to the police. It does establish that Mr Bablis knew Mr O'Dowd, vouched for him and was a point of contact for him. That much is consistent with findings made by the primary judge: see [52], [75], [103], [129], [135]. It does not establish that Mr Bablis was in a venture with Mr O'Dowd or that they were working together on some basis which provided commercial reward to Mr Bablis.

Ms Richards' evidence does not contradict any finding made by the primary judge as to the communications between Mr Levy and Mr Bablis or their context. Nor does it contradict his Honour's findings as to the absence of any commercial relationship between them or as to Mr Bablis believing at the time that Mr O'Dowd was honest and acting as a point of contact for him. Whilst it may have provided a basis for cross-examining Mr Bablis as to what he knew in September 2005 of the police complaint about Mr O'Dowd, it is by no means clear where that cross-examination would have led. Ms Richards' evidence does not establish that she told Mr Bablis what the detail of her complaint was. From Mr Bablis' perspective, he may have received an explanation for the complaint from Mr O'Dowd which did not involve any suggestion of dishonesty or wrongdoing on Mr O'Dowd's part. To consider how matters might have proceeded at the hearing involves little more than speculation. What cannot be said is that there would in all probability have been a different outcome because the primary judge would have accepted Mr Levy's evidence as to his dealings with Mr Bablis, rejected the evidence of Mr Bablis in relation to the conversations relied on, and by some process of reasoning held that there had been a breach of fiduciary duty, misleading or deceptive conduct or negligent misstatement as pleaded. Any such reasoning also would have to take account of the documentary evidence relied upon by the primary judge, which is not before this Court, and his Honour's assessment of the probabilities.

It was submitted that Ms Orchard's evidence established that by the end of 2003, Mr Bablis was aware of a number of complaints of non-performance by Mr O'Dowd and of Ms Orchard's view that Mr O'Dowd was a "crook". Mr Levy also relies upon Ms Orchard's evidence as establishing, by an admission of Mr Bablis, that he and Mr O'Dowd were "in business together".

These submissions also overstate the effect of Ms Orchard's evidence which was as to events which had happened over eight years earlier and in fairly general terms, imprecise as to time and, with one possible exception, not corroborated or further explained by any contemporaneous material. Her references to a "foundation" and to the "funding" of humanitarian projects do not necessarily contradict Mr Bablis' evidence and the primary judge's findings that Mr Bablis was involved with the One Research Foundation to which Mr O'Dowd made a pledge in August 2003. This evidence of Ms Orchard is explicable as vague recollections of discussions between Mr Bablis and Mr O'Dowd concerning Mr O'Dowd's pledge and how he proposed to fund it. The evidence concerning the Wolper Hospital and Mr Lansky's will is supported to some extent by the copy document admitted in evidence. However, it is difficult to know what to make of parts of this evidence. It confirms that there was a relationship between Mr Bablis and Mr O'Dowd in late 2002 which extended at least to a common interest in pursuing investment opportunities. It does not establish, however, that Mr Bablis had a commercial interest in Mr O'Dowd's business ventures or in the pursuit of any specific investments involving "private placements". It suggests that some of those involved in this incident were far less sceptical and questioning than they should have been.

The evidence as to passing on complaints about Mr O'Dowd and as to him being a "crook" is vague, general and hearsay as to the subject matter of the complaints. Its relevance could only be to fix Mr Bablis with knowledge of alleged wrongdoing by Mr O'Dowd. It does not identify any complainant or the nature of the circumstances resulting in the complaint. As I have already noted, it is given years after the relevant events and in the context of Ms Orchard apparently having suffered financial losses as a result of her dealings with Mr O'Dowd by having paid expenses on his behalf. Ms Orchard revealed, in the way she gave this part of her evidence, an anger towards Mr O'Dowd about what had happened. These considerations raise questions as to the cogency of her evidence in the absence of any supporting contemporaneous material. There also remain uncertainties as to how some of her evidence is to be understood in the light of other evidence likely to emerge with it. For example, did the people making complaints to Ms Orchard include persons such as the Richards who Ms Orchard had introduced to Mr O'Dowd? What were the investments which were the subject matter of those complaints and were they different from the "private placement" eventually proposed to Mr Levy?

Ms Orchard's evidence that Mr Bablis had said that he and Mr O'Dowd were "in business together" does not identify the nature of the business or the parts they played in it. Such a statement could, consistently with the evidence before the primary judge, have been made in 2003 in relation to their involvement in the One Research Foundation to which Mr O'Dowd eventually pledged funds. In the face of Mr Bablis' denial of any involvement in any of Mr O'Dowd's transactions and in the absence of any documentary evidence suggesting otherwise, this evidence does not compel or require a contrary conclusion to that reached by the primary judge on this question.

As with the evidence of Ms Richards, Ms Orchard's evidence could, no doubt, have provided a basis for further cross-examination of Mr Bablis as to his dealings with Mr O'Dowd in 2002 and 2003. It is possible that such cross-examination would have resulted in Mr Bablis giving further and different evidence as to his early dealings with Mr O'Dowd. However, this remains no more than speculation. Ms Orchard's evidence does not contradict findings of the primary judge as to the dealings between Mr Bablis and Mr Levy so as to make it probable that a different outcome would have followed on the pleaded claims for breach of fiduciary duty, misleading or deceptive conduct or negligent misstatement. Nor does it require a conclusion on a collateral issue inconsistent with a finding made by the primary judge which would most probably have led to his Honour preferring and accepting Mr Levy's evidence as to his dealings with Mr Bablis because of a different view as to the credibility of Mr Bablis. As I have stated earlier, such a conclusion would also have to take account of the documentary and other evidence relied upon by the primary judge.

It is not established that Ms Orchard's evidence, either considered alone or with that of Ms Richards, would have produced a different outcome for Mr Levy in relation to any one or more of these three pleaded claims. As I have already noted, it was conceded on behalf of Mr Levy in argument that none of the further evidence would have led to a different outcome in relation to his contract claims. That concession presents a further difficulty for the argument dealt with above because some of the findings which justify the primary judge's rejection of Mr Levy's contract claims against Mr Bablis are inconsistent with Mr Bablis having made and Mr Levy having relied upon some of the statements alleged to have been made in August 2004 and June and October 2005 and also inconsistent with the acceptance of Mr Levy as a credible witness: compare the statements alleged as recorded at [77], [110] and [165] with the findings at [279], [283] and [284].

Evidence as to dealings with Mr Nikytas Petroulias

This evidence has to be considered in two parts because some of it concerns matters occurring before the hearing. The first part concerns dealings between Mr Bablis and Mr Petroulias in 2005. The second concerns dealings involving Mr Petroulias, Ms Bakis and Mr Daley which occurred after the hearing and in 2011. It also includes an admission said to have been made by Mr Bablis to Mr Petroulias as to matters occurring before the hearing.

Evidence as to dealings in 2005

This evidence is given by Mr Petroulias in his affidavit sworn on 25 June 2012. He was not cross-examined on that affidavit. Mr Petroulias was a patient of Mr Bablis between February and August 2005. They discussed investments and business ideas including investments in "private placement programs". In about August 2005 Mr Bablis introduced Mr Petroulias to Mr O'Dowd. At some time during 2005 Mr Bablis suggested to Mr Petroulias that Mr O'Dowd might be appointed a director of a company which was to be used as a "vehicle for a merchant bank". Mr Petroulias apparently acted on that advice. In his conversations with Mr Petroulias concerning "private placement" investments, Mr Bablis used the expression "we" when indicating that communications about "trades" had to be made either by Skype or pre-paid mobile phones for security and confidentiality reasons. This is relied upon as evidence of Mr Bablis' involvement as a participant in those transactions, at least in 2011.

Discussion (matters occurring in 2005)

This evidence does not contradict any of the findings of the primary judge as to the dealings between Mr Bablis and Mr Levy. Nor is it inconsistent with any of his Honour's findings concerning the nature of the relationship between Mr Bablis and Mr O'Dowd. The primary judge found that Mr Bablis had an irrepressible interest in commercial investment ([41]), that he represented Mr O'Dowd in a good light ([52]) and that he had discussions with patients about Mr O'Dowd and private placements, both before and in June 2005 ([75], [82], [113]).

The use of the word "we" to describe the manner in which "trades" were done could suggest a personal involvement of Mr Bablis in such dealings and, perhaps, some connection to Mr O'Dowd. However, on no view is it credible evidence that in or before 2005 Mr Bablis had been engaged in "private placement" transactions of the kind described to Mr Levy or that he had some commercial interest in such transactions as engaged in at that time by Mr O'Dowd. Nor does it require findings inconsistent with the findings of the primary judge accepting Mr Bablis' evidence that he had not been involved in "private placement" transactions and was not in business with Mr O'Dowd or receiving any commission from him: see, [51], [320], [321]. It is not established that this evidence, had it been available, would have produced a different and favourable outcome for Mr Levy before the primary judge. Considered alone it cannot justify an order for a new trial.

Evidence as to dealings from February 2011

This evidence is given by Mr Petroulias' affidavit, a sworn statement of Ms Bakis dated 16 August 2011 and a signed statement of Mr Daley dated 16 August 2011. Ms Bakis' statement was admitted without objection. The relevant parts of Mr Petroulias' affidavit (paras 19 to 65) and the statement of Mr Daley were admitted subject to various objections. Notwithstanding that Ms Bakis' statement was admitted without objection, it was submitted that it had no probative value as similar fact evidence.

Except for a statement of Mr Bablis to Mr Petroulias which is relied upon as an admission by Mr Bablis, all of this evidence is said to be relevant as similar fact evidence which satisfies the coincidence rule in s 98 of the Evidence Act 1995. At an early stage in the argument this evidence was relied on as tendency evidence which would have had to satisfy the tendency rule in s 97 of the Act. However, in Mr Levy's written submissions in reply it was made clear that the evidence as to the 2011 transaction was relied upon as evidence of a transaction which was sufficiently similar to the 2005 transaction to make it improbable that Mr Bablis' involvement in the earlier transaction was any different from his proved involvement in the later one.

The evidence relied upon as an admission by Mr Bablis is of a conversation in about February 2011 in which Mr Bablis said to Mr Petroulias that "after 15 years working on these trades I am finally at the table myself. I have done a number of trades earning a commission, but this one I have put together myself". The admission is said to be that Mr Bablis had been engaged in a number of private placement transactions in the period from 1996 and had earned commissions by doing so.

The following is a summary of the evidence relied upon as similar fact evidence. In February 2011 Mr Petroulias had a conversation with Mr Bablis about an unspecified "trade" in relation to which Mr Bablis said that he was "$1.1m short". Mr O'Dowd was not said to be involved in the transaction. Mr Bablis gave Mr Petroulias three documents purporting to be on HSBC Holdings PLC letterhead. They were headed "Proof of Fund", "Blocked Funds Letter" and "Safe Keeping Receipt". They were said to relate to a transaction which was referred to as the "TITO" deal. Mr Petroulias reported that conversation to Ms Bakis with whom he shared accommodation at that time. There were further conversations and email communications between Mr Petroulias and Mr Bablis. Mr Petroulias was also sent further documents relating to other investment opportunities said to be available. In March 2011 there was discussion about a transaction referred to as a "bullet trade" which involved an amount of $1m.

At the end of March 2011 a Ms Paulina Dabelic contacted Mr Petroulias. It is said that she was described to Mr Petroulias by Mr Bablis as his executive assistant who focussed on his "investment business". On 1 April 2011 Mr Petroulias agreed to advance $140,000 to Ms Dabelic on the basis that it would remain in a solicitor's trust account as security for payment of legal fees for the "TITO" transaction in which she and Mr Bablis were said to be involved. Mr Petroulias was told that the $140,000 would be used to pay the legal fees once the "deal" was completed. Mr Petroulias in turn asked Ms Bakis to "invest" $100,000 and Mr Daley to "invest" $40,000. Each did so.

On 1 April 2011 Ms Bakis sent $100,000 to a trust account nominated by Ms Dabelic and Mr Daley contributed a further $40,000. On 5 May Ms Dabelic requested a further $68,550. Mr Petroulias raised and paid that further sum. By August 2011 none of these funds had been repaid. Mr Petroulias retained a private investigator. A decision was made to try and "set up" Ms Dabelic and Mr Bablis by proposing a further transaction. Three meetings were arranged with Mr Petroulias, Ms Dabelic and an actor posing as a potential investor. Those meetings were held on 14, 17 and 19 August 2011. Mr Bablis only attended the second meeting. Each meeting was recorded and videoed without the consent or knowledge of Mr Bablis or Ms Dabelic. At the conclusion of the third meeting Mr Petroulias revealed the "set up" and demanded repayment of the money advanced together with a further sum. Later on 19 August 2011 a deed of settlement was executed by Mr Bablis which provided for the payment of money. Subsequently, a further settlement deed, which provided for the payment of a much lesser sum, was executed. Dated 18 October 2011, that deed was drafted by lawyers acting for the respective parties. Those parties were Mr Petroulias, Ms Bakis and Mr Daley, on the one hand, and Ms Dabelic, Mr Bablis and the firm Slattery Thompson Lawyers on the other.

Ms Bakis' evidence recites her side of the same story. She was asked by Mr Petroulias in late March 2011 whether she would take part in the completion of a deal, described as the "TITO" deal, that she was told Mr Bablis had put together. She was asked to invest $140,000. The transaction was said to be secured by documentation and she was told the funds would not leave the solicitor's trust account and would not be used to pay any legal fees until the "TITO" deal was completed and the profits generated by it received. Those profits were understood to exceed significantly the amount of $140,000. Ms Bakis participated in a Skype conversation with Mr Petroulias, Mr Daley and Mr Bablis on 30 March 2011. On 1 April 2011 she sent $100,000 to a trust account nominated by Mr Bablis.

Mr Daley's evidence tells the story of his involvement. It suggests that he first had conversations about the need for $140,000 on 1 or 2 August 2011. However, one of the documents attached to his statement indicates that he arranged for an amount of $40,000 to be paid on 1 April 2011. That is consistent with the evidence of Mr Petroulias and Ms Bakis that he was approached in late March 2011 and contributed $40,000 at that time.

Discussion (matters occurring in 2011)

It is argued on behalf of Mr Levy that the proposal in which Mr Petroulias, Ms Bakis and Mr Daley participated in 2011 was "strikingly similar" to that presented to Mr Levy in 2005. The similarities are said to be that it was an investment in something called a "private placement", it was exclusive and only available by invitation, it required a deposit of funds into a European bank where the funds were "blocked" and could not be accessed by the bank and it promised the return of the funds within a year with at least 100 per cent profit. It is said that the asserted similarities between these transactions provide a basis for inferring that Mr Bablis was also involved, seemingly as a principal, in the transactions in which Mr Levy took part in 2005.

For this evidence to be admissible for that purpose it must satisfy the requirements of the coincidence rule and, specifically, paragraphs (a) and (b) of subsection 98(1) of the Act which provide:

"98 The coincidence rule

(1) Evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events or the circumstances in which they occurred, or any similarities in both the events and the circumstances in which they occurred, it is improbable that the events occurred coincidentally unless:

(a) the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence; and

(b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value."

It is sufficient to address paragraph (b). That provides that coincidence evidence is not admissible unless the relevant court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced, "have significant probative value". In Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51, Sackville J (Whitlam and Mansfield JJ agreeing), considered the meaning of the expression "significant probative value" where used in s 97(1)(b) in relation to the tendency rule: esp at [72]-[74]. There is no reason why the expression should be given any different meaning where it appears in s 98(1). It requires, by use of the word "significant", more than that the relevant evidence satisfy the test for relevance in s 55 of the Act.

For this Court the question is whether this evidence would be admissible in a rehearing of Mr Levy's pleaded claims, other than those for breach of contract, as similar fact evidence. Unless this Court is satisfied that it would be admissible and that the evidence would probably produce a different outcome, there would be no reason for ordering a new trial on the basis that a "substantial wrong or miscarriage" had occurred by its not having been available and led: UCPR r 51.53(1).

To consider the probative value of this evidence, it is first necessary to identify the 2011 "event" or circumstance which is said to be similar to that or those which occurred in 2005. That event is described in the submissions as the "proposal" in which Mr Petroulias participated in 2011. That proposal could be the "TITO" deal or the more specific transaction involving the payment of $140,000 and further payment of $68,550. The details of the "TITO" deal are not explained by the evidence. The three documents purportedly issued by HSBC Holdings PLC in relation to that deal are not self-explanatory. They, no doubt deliberately, use much jargon and include references to "blocked" funds and "safekeeping" receipts. How they relate to any transaction proposed by Mr Bablis or in which he was engaged is not explained. In one conversation with reference to the HSBC documents, Mr Bablis is said to have referred to "a huge trade", to their being the documents "that secure the trade" and to the money never leaving the bank account. However, none of this evidence establishes that in 2011 Mr Bablis was engaged in a transaction which had the characteristics of a "private placement" as explained by Mr O'Dowd to Mr Bablis, or the nature of Mr Bablis' involvement in such a transaction.

The details of the more specific transaction are clearer. However, there are a number of differences between that transaction and the "private placement" transactions in which it is alleged Mr Levy was engaged in 2005. The 2011 transaction did not involve Mr O'Dowd. It was not described as a "private placement". It did not involve a deposit into a recognised bank. It did not involve a deposit for a term of six to twelve months which would provide a return of between 50 to 100 per cent. It did not involve any pooling of funds to produce an amount of $10m or $20m. It involved the deposit of funds with a solicitor apparently to be held and not paid away. The exact nature of Mr Bablis' involvement in that transaction remains unclear. He does not seem to have been a borrower of the funds advanced by Mr Petroulias, Ms Bakis and Mr Daley.

If the more specific transaction is taken as the relevant 2011 transaction, the transactions relied upon for the application of the coincidence rule occurred six years apart, seem to have involved different parties as principals and had the significant differences referred to above. There is no point of similarity between them or the circumstances in which they occurred, which provides a logical basis for concluding that because Mr Bablis is shown to have acted in a particular way or with a particular state of mind in 2011, it is probable that he also did so six years earlier in relation to any transaction which then occurred. The submissions made on behalf of Mr Levy did not address these difficulties or formulate with any precision the particular facts the existence or non-existence of which this evidence is said to make more or less probable by reason of asserted similarities in the relevant transactions or circumstances in which they occurred.

For these reasons, the evidence as to these events in 2011 would not be admissible as coincidence or similar fact evidence probative of the fact or extent of Mr Bablis' involvement in the alleged 2005 transactions. It does not have any, let alone "significant", probative value for that purpose.

The statement of Mr Bablis to Mr Petroulias in February 2011 relied upon as an admission of his earlier involvement in a number of "trades" does not identify the "trades" referred to, or describe when they took place or who were the parties to them. It suggests that Mr Bablis was involved in such "trades" for a period of five years before he had met Mr O'Dowd. An inference that after they had met, Mr Bablis earned commissions from transactions involving Mr O'Dowd would be inconsistent with the primary judge's finding at [319] which was based on a consideration of contemporaneous email communications. These uncertainties and inconsistencies make it impossible to conclude that this evidence was likely to have led to a different outcome before the primary judge.

These conclusions make it unnecessary to consider the other bases upon which it was argued on behalf of Mr Bablis that the evidence as to his dealings with Mr Petroulias in 2011 was not admissible in the appeal and therefore not available to be considered as further evidence under s 75A(7). For completeness, however, I will record briefly my views in relation to those arguments.

Mr Daley did not swear an affidavit or give oral evidence. A signed statement was tendered but he was not made available for cross-examination. No objection was taken that his evidence tendered in the appeal was not given by affidavit and therefore did not comply with UCPR r 51.51(4). The signed statement was objected to as hearsay and said not to be admissible because of s 59 of the Act. Mr Levy relied upon s 63(2) which provides that the hearsay rule does not apply if the maker of the statement or previous representation sought to be tendered is "not available" to give evidence. That last expression is defined in cl 4(1) in Part 2 of the Dictionary to the Act. The relevant paragraph of cl 4(1) is paragraph (f) which requires that for a person to be taken "not to be available", the party tendering the evidence must show that "all reasonable steps have been taken, by the party seeking to prove the person is not available, to find the person", but without success. (Clause 4(1) was amended by the Evidence Amendment Act 2010 which came into effect on 14 January 2011. As a result of that amendment the relevant paragraph became paragraph (f)). The evidence relied upon by Mr Levy in support of that conclusion is evidence of his solicitor, Mr Tsolakis, in an affidavit sworn on 29 May 2012. That affidavit shows that at a very late stage in the appeal proceedings, searches were undertaken of the electoral roll and of the White Pages in order to locate telephone and other details for persons named Ian Daley. Notwithstanding that at the time those searches were undertaken the evidence shows that Mr Levy and his solicitors had a residential address, an email address and a fax number for Mr Daley, there is no evidence that any inquiries were made at that residential address, or that any attempt was made to communicate with Mr Daley via the email address or fax number. In these circumstances, this Court cannot be satisfied that reasonable steps were taken to locate Mr Daley. Accordingly, the exception in s 63(2) did not apply and Mr Daley's statement was not admissible as evidence in the appeal. I should add that the admission of that evidence was not critical to the success of Mr Levy's argument in relation to this further evidence, because Mr Daley's evidence went no further than the evidence of Mr Petroulias and Ms Bakis.

There was also objection to parts of the affidavit of Mr Petroulias. They included objections to his evidence of statements made by Ms Dabelic concerning Mr Bablis as hearsay which was not within any relevant exception to the hearsay rule. Reliance was placed on the admissions exception to that rule. However, the evidence did not establish that Ms Dabelic had authority to make admissions on behalf of Mr Bablis or that any admissions that she made were made within the scope of her employment by Mr Bablis: cf s 87 of the Act. That hearsay evidence would not, therefore, have been admissible at any new trial to prove the truth of what was asserted.

Objection was also taken to the admissibility of the recordings made of the meetings which occurred on 14, 17 and 19 August 2011. It was accepted in argument that those recordings and transcripts would only be admissible if they were within the exception in subsection 7(3)(b)(i) to the prohibition in subsection 7(1) of the Surveillance Devices Act 2007. That exception is that a principal party to the recorded conversation consents to the listening device being used and that the recording of the conversation is "reasonably necessary for the protection of the lawful interests of that principal party". It was argued that the making of the recording was reasonably necessary for the protection of the lawful interests of Mr Petroulias. I do not agree. What Mr Petroulias sought to achieve by making the recording was not to protect any lawful interest he might have had in maintaining an action against Mr Bablis or Ms Dabelic for recovery of any advances made. The conversation was not recorded for the purpose of obtaining admissions as to the transactions which had been undertaken and in respect of which Mr Petroulias may have had legal rights. It was recorded to trap Mr Bablis and Ms Dabelic into engaging in further conduct, the threat of disclosure of which Mr Petroulias could then use to "persuade" them to meet their asserted obligations under the earlier transactions. That reason for making the recording did not involve the "protection" of any lawful interest of Mr Petroulias: see the discussion in Sepulveda v The Queen [2006] NSWCCA 379; 167 A Crim R 108, esp at [113]-[142].

In the result, none of the further evidence of Mr Petroulias' dealings with Mr Bablis is such that, if available, it would have been admissible and would have led to a different outcome to one or more of Mr Levy's claims for breach of fiduciary duty, misleading or deceptive conduct or negligent misstatement. For that reason, it cannot justify the allowing of the appeal and the ordering of a new trial of any of those claims.

Evidence as to the Sherwood transaction

The further evidence

The further evidence relied upon is a copy of a "Placement Agreement" dated 1 May 2001, copies of documents produced from a file of Hardings, solicitors, and oral evidence of Mr Noel Collett. That evidence concerns a transaction entered into in May 2001 and the subsequent loss by Sherwood, and its underlying investors, of an amount of US$5m.

How the further evidence became available

The fact of that transaction and Mr Bablis' involvement in it was known to Mr Levy at the time of the hearing before the primary judge and was the subject of evidence. In his opening address on the first day of the hearing, counsel for Mr Levy said:

"Mr Bablis has sworn there were no placements made by him ever. He has never had any familiarity with the placements, he has sworn to that in this affidavit. This clearly shows in 2002 that he did make a placement of a substantial amount of money $5m through the Sherwood group as a director. It shows a familiarity if not an expertise - possibly incurred or no doubt fined [sic] and he was with Mr Huston when he did it as a director."

The "sworn" evidence of Mr Bablis was his affidavit evidence that he had "never invested" in the types of private placements which Mr O'Dowd had told him about (affidavit 16/12/08, esp paras 134, 147). He described those "private placements" as involving, as explained to him by Mr O'Dowd, payment of funds into an account of the investor with a major bank to be used, in some unexplained way which did not involve the money leaving the account, by a "bank trader". It was said that the trader "somehow blocks" the account to do a "trade". Although the references to "blocks" and "trades" do not give the uninitiated any real understanding of what is being referred to, they were not elaborated upon in that sworn evidence (affidavit 16/12/08, esp paras 128, 130, 148, 158).

The documents referred to by Mr Levy's counsel in his opening as showing Mr Bablis' had earlier been involved in a "placement" appear to have included a letter from Hardings to a prosecutor in Poland dated 30 January 2004. That letter was written on behalf of Sherwood and stated:

"We have been instructed by the company to take whatever action is necessary to recover funds which we understand are presently standing to the credit of an account at the Dresdner Bank, Geneva, which our client has been unable to access. Mr Collett has previously advised you that the company transferred US$5 million from an account at Citibank Limited Australia to the Dresdner Bank in February 2002. Mr Collett, on behalf of The Sherwood Group Pty Limited entered into a Placement Agreement with Mr Peter Osuch, to enable the funds to be deposited to the account."

That letter became available to Mr Levy at the commencement of the hearing before the primary judge. It is necessary to explain how this occurred because that is relevant to whether the further evidence or some other evidence was available to Mr Levy at the time of the hearing to prove the matters said to be established by the further evidence which is now tendered.

Sherwood was incorporated in August 2001 by Mr Robin Huston, a chartered accountant, who was also Mr Bablis' accountant. The original directors included Mr Bablis and Mr Collett. The company was formed to aggregate investment funds of its shareholders and others. Prior to the hearing before the primary judge, Mr Levy's then solicitors, McLachlan Thorpe Partners, arranged for the issue of various subpoenas to produce documents addressed to third parties, including Mr Huston. In response to a subpoena served in May 2009, Mr Huston wrote to McLachlan Thorpe Partners advising:

"All of the Sherwood Group Pty Ltd files and documents, which you are seeking were sent to Hardings Solicitors in Sydney in June 2003 at the request of Mr. Peter Bablis. None of these files have been returned. Mr. Bablis has been advised of your request. I have enclosed copies of the documents I have on file."

Subpoenas to produce were subsequently issued to Hardings and Sherwood.

Mr Huston produced documents for himself and on behalf of Sherwood. The former are not identified in the material before this Court. Bank statements and emails were produced on behalf of Sherwood. Hardings responded to the subpoena addressed to it and produced documents. A claim for privilege was made on behalf of Sherwood in relation to 37 of those documents. One of those 37 documents was eventually made available for inspection. That was the Hardings letter dated 30 January 2004. On the first day of the hearing Mr Levy's counsel stated that there was a dispute only as to whether two of the remaining documents were privileged. Sherwood's claim to privilege was argued on 29 July 2009. The primary judge delivered an ex tempore judgment upholding that claim in respect of the two documents. It was not submitted to this Court that the primary judge's decision on that claim was wrong.

In the appeal, subpoenas to produce documents were issued to MacGillivrays, Hardings and Mr Collett. MacGillivrays were the solicitors who acted for Sherwood before Hardings were retained. They claimed privilege on behalf of their client Sherwood in respect of the documents sought. By letter dated 4 October 2011 addressed to the Registrar of this Court, MacGillivrays advised in relation to those documents that "similar categories" of documents had been produced by Hardings and been the subject of the claim to privilege which was upheld by the primary judge. The claim to privilege in relation to the documents produced by MacGillivrays to this Court was upheld by Beazley JA on 30 May 2012: Levy v Bablis [2012] NSWCA 157.

For reasons which are not explained, similar claims to privilege were not made on behalf of Sherwood in relation to the documents produced to this Court by Hardings and Mr Collett. The consequence was that most of the documents held by Hardings, for which a successful claim to privilege had been made before the primary judge, were produced and made available for inspection by Mr Levy in the appeal proceedings. Those documents were tendered and became Ex K in the appeal. Mr Collett also produced a copy of a Placement Agreement dated 1 May 2001. That was tendered and became Ex H in the appeal. Mr Collett's evidence was that he had retained this copy of the agreement in his possession. He was unclear as to the capacity in which he had first received, and subsequently held, that copy. The evidence did not suggest that Mr Collett had only recently received the copy agreement.

Mr Huston's evidence before the primary judge

Mr Huston was also subpoenaed by Mr Levy to give evidence before the primary judge. On the second day of the hearing Mr Levy's counsel led evidence from him concerning the Sherwood transaction and the involvement in it of Mr Peter Osuch. That evidence was that in February 2002 US$5m had been transferred on behalf of Sherwood from a Citibank Ltd account to an account with Dresdner Bank for investment in relation to a project which Mr Huston thought had something to do with an oil and gas pipeline in a "European" country; and that those funds were subsequently "deemed" lost as a result of the fraud of the broker involved, Mr Osuch. Mr Huston identified Mr Collett as the person who had arranged the investment of those funds on behalf of Sherwood. Mr Huston did not give his unqualified agreement to Mr Levy's counsel's description of those funds as having been "placed" with, as distinct from "transferred to", Dresdner Bank.

At two points in that examination in chief, objections were taken to the relevance of questioning directed to the role of Mr Collett and the likelihood of a fraud having been committed by Mr Osuch. Following those objections, and comments by the primary judge, counsel for Mr Levy did not pursue further with Mr Huston the precise nature of the transaction in which Sherwood was involved or the circumstances in which the money was lost.

Discussion

It is necessary first to consider whether any of the further evidence or some other evidence was available, or with reasonable diligence could have been available, to Mr Levy at the hearing to establish the matters now sought to be proved. It is not sufficient for Mr Levy to establish that this further evidence was not available if at the same time there was other evidence which could have proved the same matters and that other evidence was available or could with reasonable diligence have been available. In such a case there would not have been any denial of any opportunity to present evidence of matters which it is argued would have resulted in a different outcome in the proceedings before the trial judge.

Most of the narrative which follows, concerning that further evidence, is taken from documents in Ex K. Some is taken from Mr Collett's oral evidence. On 1 May 2001 Mr Collett signed a document headed Placement Agreement which provided for US$5m to be invested on behalf of Sherwood in a "private project". On 14 February 2002 those funds were transferred to an account at Dresdner Bank. They were subsequently misappropriated by Mr Osuch. In the period after the funds were transferred, Mr Osuch produced to Sherwood false bank statements of Dresdner Bank which recorded that the funds were still held in the account. By mid-2003 it was suspected by Sherwood that it had been the subject of a fraud. Mr Huston and Mr Bablis travelled to Zurich to meet with representatives of the bank. Subsequently steps were taken to seek to recover the moneys. At one stage Mr O'Dowd was appointed to represent Sherwood in its dealings with the bank. That was presumably at the suggestion of Mr Bablis. Mr Osuch was charged with various offences under the Polish Criminal Code. The narrative of one offence included that Mr Collett had been deceived into believing that the funds would be deposited into an account "in favour of Noel Collett for the whole period of investment". In his oral evidence Mr Collett said that he anticipated a return of 30 per cent to 35 per cent on the investment; that, not surprisingly, he found the precise form of the investment difficult to understand; that the Sherwood transaction was not referred to in discussion between the investors as a "private placement"; and that he was told that the funds were to be placed in a "non-depletion" account with the result that they could be moved only if they were replaced by a "cash equivalent". Mr Osuch had authority to withdraw the funds in the account and replace them with some form of "cash equivalent". What that meant was not explained in the evidence.

It was submitted on behalf of Mr Levy that evidence of these matters was not available at the hearing because most of them were established by documents which were the subject of a valid claim for privilege. For that reason those documents were not available to be tendered and could not with reasonable diligence have been obtained for tender. Had the evidence been available and tendered, it is said that it would have proved false Mr Bablis' assertions that he had never previously been involved in a "private placement" and that he had not told Mr Levy of his experience in the Sherwood transaction because it was not a "private placement". One of Mr Bablis' explanations, given in cross-examination, for not telling Mr Levy about the Sherwood transaction was that it was different from a "private placement" because it involved significantly less than $10m, the funding of a project rather than some form of a bank trade, and the transfer of funds to an account of an investing broker which could then be accessed by that broker. It is argued that in the face of evidence that Mr Bablis had been involved in an earlier private placement, the primary judge would not have accepted Mr Bablis' evidence to the contrary (cf [51]) or concluded that Mr Bablis was unlikely to have given advice to Mr Levy in the terms he (Mr Levy) maintained because he did not have sufficient expertise to do so (cf [326]).

Of the further evidence led to prove these matters, the only evidence not available at the trial was the documents in the Hardings file (Ex K). There is no reason why Mr Collett could not have been subpoenaed to produce documents and to give evidence at the trial. His role was described in the Hardings' letter of 30 January 2004 and in Mr Huston's evidence. It is not likely that there could have been a claim by Sherwood for privilege in relation to the copy of the Placement Agreement in Mr Collett's possession. There was no evidence before this Court indicating whether any attempt was made to speak to Mr Collett at the time of the hearing, and if no such attempt was made, explaining why not. More significantly, Ex K was not the only source of evidence available to Mr Levy as to the terms of Sherwood's investment, the circumstances in which it was lost and as to Mr Bablis' involvement in that investment and its recovery. That evidence was able to be given by Mr Huston and Mr Collett. It was not pursued at the trial with Mr Huston and could have been pursued with Mr Collett.

In these circumstances it is not shown that the matters concerning the Sherwood transaction which Mr Levy now seeks to prove could not have been the subject of evidence at the hearing before the primary judge. Evidence of those matters either was available, as was the case with the evidence of Mr Huston, or could with reasonable diligence have been available, as was the case with Mr Collett's evidence and the documents in his possession.

It is necessary next to consider whether it is probable that this further evidence would have resulted in a holding in Mr Levy's favour on any of the claims other than those for breach of contract. The evidence concerning the Sherwood transaction does not directly concern what was said between Mr Bablis and Mr Levy in the period from November 2002 to October 2005 or the circumstances of their relationship during that period. The resolution of the issues in relation to those matters depended on a consideration of their evidence in the context of contemporaneous documents and the primary judge's assessment of the probabilities. The consideration of their evidence involved an assessment of its cogency and of their credibility. As with the other further evidence relied upon, the Sherwood evidence is said to prove false affidavit and oral evidence given by Mr Bablis so as to make it probable that the primary judge would have arrived at a different assessment of his credibility and evidence and, ultimately, accepted Mr Levy's version of the critical events.

This argument fails at the first point in that argument. The further evidence does not unambiguously, and in a way which could not be explained by further plausible evidence from Mr Bablis, show that his earlier evidence was necessarily false and contrary to the position as he truly understood it. As is noted above, the evidence of Mr Bablis said to be rendered false is that he had never previously been involved in a "private placement" and that the Sherwood transaction was not a "private placement". There were differences between the Sherwood transaction and a "private placement" transaction as described by Mr O'Dowd to Mr Bablis and by Mr Bablis to Mr Levy. The former involved an investment of $5m, appears to have involved, or was understood as involving, an investment in a "private project" of some kind (it seems that Mr Huston thought the project may have been the construction of an oil or gas pipeline) and permitted the payment of the funds out of the account on the authority of the "broker" arranging the investment provided that they were replaced with a "cash equivalent". The investment was not, according to Mr Collett, described as a "private placement". Nor did it involve "blocking" of funds in any account or trading of some kind by a bank. These differences, which appear from a comparison of the Sherwood evidence with the features of a "private placement" as understood by Mr Bablis (affidavit 16/12/08 paras 128, 130, 148), make plausible his assertion that he considered the transactions to have been different and to have involved different risks; the latter principally because in the case of a "private placement", as explained by Mr O'Dowd, the funds would never leave the relevant bank account.

The primary judge's finding (at [326]) that Mr Bablis had been interested in the "Sherwood Group which had some association with private placements" also indicates that his Honour was prepared to accept that there was some similarity between the two investments. More significantly, the fact of the differences referred to above does not contradict his Honour's conclusion that Mr Bablis' experience in relation to the Sherwood transaction was not sufficient to give him the expertise which on Mr Levy's case he was asserted to have exhibited in their dealings in relation to the "private placement" in which he became involved (at [326]).

By way of summary, there was evidence of the Sherwood transaction and its consequences which either was available or could with reasonable diligence have been available to Mr Levy at the trial. More significantly, that evidence does not carry with it a high probability of a different outcome had it been available before the primary judge. The interests of justice do not require that the appeal be allowed so as to permit Mr Levy to adduce further evidence concerning that transaction at a new trial.

Conclusion

The further evidence which Mr Levy seeks to adduce at a new trial falls into four parts. Two concern events said to have occurred before the hearing at first instance and to establish that Mr Bablis had previously engaged in private placement transactions either via the Sherwood transaction or via other dealings in some way involving Mr O'Dowd. They are also said to establish that Mr Bablis was "commercially interested" in some way in Mr O'Dowd's activities. One part concerns the events of 15 June 2005. The remaining part concerns events which occurred after the hearing and more than six years after the critical events involving Mr Levy. Considered separately, no part of the further evidence provides a basis for concluding that the outcome of the trial would have been different if that evidence had been available. Considering the four parts together, that evidence does not compel a different conclusion. The nature and credibility of the evidence in each part is not different or more cogent when considered with any of the other part or parts of the further evidence. Nor was this argued to be the position on behalf of Mr Levy.

It has not been necessary to consider Mr Bablis' further argument that a new trial should not be ordered because there has been no challenge to the primary judge's findings (at [239]) that had Mr Levy not invested the $1m with Mr O'Dowd, he would have invested it with Mr Banovec or his company, CSL Securities Ltd, and that thereafter those funds also would have been lost to Mr Levy.

Proposed orders

The appeal should be dismissed with costs. Those costs include the cost of Mr Levy's application to adduce further evidence on the hearing of the appeal.

Pursuant to orders made by Giles JA on 12 December 2011, Mr Levy has provided security for the costs of the respondent in the sum of $125,000. That security has been paid into Court. Mr Bablis seeks an order that the security be released to him on the dismissal of the appeal. Such an order should not be made without this Court having heard from Mr Levy as to why an order should not be made, either for payment out of the full amount of the security or some part of it.

The orders I propose are:

(1) Appeal dismissed.

(2) Appellant pay the respondent's costs of the appeal including the costs of the application to adduce further evidence.

(3) The appellant to lodge written submissions concerning the order sought by the respondent as to payment to him of all or part of the amount provided by way of security for costs before the amount of those costs has been fixed by agreement or order or otherwise. Those submissions to be lodged with the Court and served within 14 days of the date of these orders. The respondent to lodge and serve any response within 7 days thereafter. The Court will then determine what further orders, if any, should be made on the basis of those submissions.

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Decision last updated: 25 February 2013

Medium Neutral Citation:	Levy v Bablis [2013] NSWCA 28
Hearing dates:	29, 30 May, 28, 29 June, 1 August 2012 (further written submissions)
Decision date:	25 February 2013
Before:	Beazley JA at [1]; Macfarlan JA at [2]; Meagher JA at [3].
Decision:	(1) Appeal dismissed. (2) Appellant pay the respondent's costs of the appeal including the costs of the application to adduce further evidence. (3) The appellant to lodge written submissions concerning the order sought by the respondent as to payment to him of all or part of the amount provided by way of security for costs before the amount of those costs has been fixed by agreement or order or otherwise. Those submissions to be lodged with the Court and served within 14 days of the date of these orders. The respondent to lodge and serve any response within 7 days thereafter. The Court will then determine what further orders, if any, should be made on the basis of those submissions. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	APPEAL - only ground that further evidence available justifying new trial - exercise of discretionary power under s 75A(7) of Supreme Court Act 1970 - most of further evidence as to matters occurring before trial - importance of principle of finality - whether "special grounds" - whether appellant could have led evidence as to those matters at trial by exercise of reasonable diligence - whether probable that further evidence would have resulted in a different outcome at trial - further evidence considered separately and together not justify conclusion that outcome would have been different - interests of justice not require order for new trial on basis that a "substantial wrong or miscarriage" has been occasioned
Legislation Cited:	Evidence Act 1995 Evidence Amendment Act 2010 Supreme Court Act 1970 Surveillance Devices Act 2007 Uniform Civil Procedure Rules
Cases Cited:	Akins v National Australia Bank (1994) 34 NSWLR 155 CDJ v VAJ [1998] HCA 67; 197 CLR 172 Clodumar v Nauru Lands Committee [2012] HCA 22; 86 ALJR 697 Coulton v Holcombe (1986) 162 CLR 1 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 Hampson v Hampson [2010] NSWCA 359 Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51 Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461 Levy v Bablis [2012] NSWCA 157 Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116 Orr v Holmes [1948] HCA 16; 76 CLR 632 Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64 Preston v Harbour Pacific Underwriting Management Pty Ltd [2008] NSWCA 216 Sepulveda v The Queen [2006] NSWCCA 379; 167 A Crim R 108 Tjiong v Tjiong [2012] NSWCA 201
Category:	Principal judgment
Parties:	Julian Emmanuel Levy (Appellant) Peter Bablis (Respondent)
Representation:	Counsel: P Menzies QC, Ms B K Nolan (Appellant) M Condon (Respondent) Solicitors: Tsolakis Solicitors (Appellant) Minter Ellison (Respondent)
File Number(s):	2006/260173
Decision under appeal	Citation: Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461 Date of Decision: 2011-05-19 00:00:00 Before: Slattery J File Number(s): 2006/260173