Mi Design P/L v Dunecar P/L

[2000] NSWSC 968

CITATION:	MI Design P/L v Dunecar P/L [2000] NSWSC 968 revised - 18/10/2000
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 4011/00
HEARING DATE(S):	17 October 2000
JUDGMENT DATE:	17 October 2000
PARTIES :	MI Design Pty Limited (Plaintiff/Second Cross-Defendant) Dunecar Pty Limited (ACN 083 651 781) (First Defendant/First Cross-Defendant) Commonwealth Bank of Australia (ACN 123 123 124) (Second Defendant/Cross-Claimant) Sean Patrick O'Connell (Third Cross-Defendant)
JUDGMENT OF:	Santow J

COUNSEL :	M Pesman (Plaintiff/Second Cross-Defendant) L J Aitken (First Defendant/First Cross-Defendant) F Kunc (Second Defendant/Cross-Claimant)
SOLICITORS:	Ian D Elvy & Associaties (Plaintiff/Second Cross-Defendant) Colbron & Associates (First Defendant/First Cross-Defendant) L E Taylor (Second Defendant/Cross-Claimant)
CATCHWORDS:	PROCEDURE — Late filing of an affidavit not permitted taking into account justice between the parties and the circumstances — "just, quick and cheap"
LEGISLATION CITED:	Supreme Court Rules Pt 1 r3(1)
CASES CITED:	Bailey & Anor v Redebi Pty Limited & Anor ([1999] NSWSC 823, 13 August 1999, unreported) State of Queensland v JL Holdings (1997) 189 CLR 146
DECISION:	Application refused.

REVISED — 18 October, 2000
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J

No. 4011/00
MI Design Pty Limited
Plaintiff

Dunecar Pty Limited (ACN 083 651 781)
First Defendant
Commonwealth Bank of Australia (ACN 123 123 124)
Second Defendant

Commonwealth Bank of Australia (ACN 123 123 124)
Cross-Claimant

Dunecar Pty Limited (ACN 083 651 781)
First Cross-Defendant
MI Design Pty Limited
Second Cross-Defendant
Sean Patrick O’Connell
Third Cross-Defendant

JUDGMENT — ex tempore

17 October 2000

introduction

1    Should leave be given by one party to file a further affidavit, seven days after evidence closed, in circumstances where:

(a) it would delay proceedings;

(b) the proceedings were urgent and required judgment as soon as possible, involving as they did an application to reinstate a tenant at the suit of the tenant and its financier, the latter claiming under a separate agreement;

(c) the further accounting evidence was not especially cogent (see 9 below); and

(d) was substantially taken into account in an agreed statement of facts.

FACTUAL CIRCUMSTANCES

2    This matter first came before me, other than on an ex parte basis, on 22 September 2000. It was an urgent interlocutory application in the first instance to reinstate a lessee, being the Plaintiff. Subsequently the Commonwealth Bank (“the Bank”) appeared on 26 September 2000 and has since been joined as the Second Defendant, claiming independently of the lessee for reinstatement of the lessee. 3    The matter has necessarily proceeded rapidly. But there has been opportunity for both sides to file affidavit evidence and for cross-examination as has occurred in subsequent appearances culminating in the last appearance before me on 10 October 2000. At the last hearing, Mr Alan Lewis, the joint voluntary administrator, of the Plaintiff was permitted to file a three paragraph affidavit on behalf of the Bank. By cross-reference to the investigative accountant’s report and, as emerged in cross-examination, Annexure M in particular, the deponent gave evidence of his conclusion in paragraph 3, quoted below:

“… in my opinion the voluntary administrators of Mi Design will, from the current revenues derived from trading the Rutherford Hotel, be able to meet the outgoings for rent, wages, food and liquor purchases, payments to the gaming and licensing authorities and other ongoing expenses (electricity, maintenance, etc) on a cash basis.”
He was then cross-examined by the First Defendant.

4    The proceedings then closed so far as evidence was concerned. No notice was given by the First Defendant that it intended to file any further affidavit. What was the subject of direction and agreement by all parties was that an agreed statement of facts would be prepared and an agreed statement of issues and that, coupled with the other material before me including factual matters in dispute, would be the subject of an urgent judgment. 5    The matter came back to me to-day at short notice at the initiative of the First Defendant who has sought to file an affidavit from his instructing solicitor Mr Colbron, to which the Plaintiff and Second Defendant object. That affidavit is sought to be filed in circumstances requiring an urgent judgment. It takes issue with the affidavit and evidence of Mr Lewis earlier referred to and seeks to put in evidence figures for the actual trading revenue of the hotel from which the Plaintiff was evicted in order to cast doubt or refute the statement of surplus referred to in paragraph 3 earlier quoted. 6    A principal matter of concern put by the First Defendant is that Annexure M appears not to take into account the gaming device duty which, according to Mr Colbron’s submission, sought to be annexed to his affidavit as Annexure E, is $1,214 per week. In order to cater for that, I have added to the Agreed Statement of Facts in a manner agreed so as to take that duly into account for both the estimated weekly cash surplus in Annexure M. The addition also notes that the First Defendant contends that taking the duty into account would produce a small weekly loss (around $400 per week). In referring here to loss and surplus, I refer to a calculation made in relation to the business, without regard to cost of capital. 7    While the affidavit material sought to be filed at this late last stage touches on other matters, though concededly in the case of Annexure E merely by way of submission, since it consists of a solicitor’s letter from Mr Colbron making various assertions, the fundamental thrust of the affidavit is to take issue with the cash surplus. It seeks to substitute a smaller one, prior to allowance for the gaming devices duty. 8    Permitting the late filing of an affidavit in the present circumstances involves the kind of balancing exercise dealt with in State of Queensland v JL Holdings (1997) 189 CLR 146. I dealt with those kind of issues in Bailey & Anor v Redebi Pty Limited & Anor ([1999] NSWSC 823, 13 August 1999, unreported). 9 Here to be weighed is the relative lack of cogency of the further material sought to be filed being figures taken from the First Defendant managing the business. I say this because management by one set of interests in the form of lessor or its manager is no reliable proxy for how the Plaintiff would have managed the business. Moreover, to the extent that the accounting evidence is now substantially reflected in the Agreed Statement of Facts, it is difficult to see any prejudice from excluding the affidavit with its tendentious material in Annexure E. 10 In the balance against admission, these are interlocutory proceedings though concededly having the potential finally to dispose of the matter. It is not the practice of this Division to permit such belated bites at the cherry in terms of further evidence, unless that evidence has sufficient cogency that to keep it out could work an injustice, remembering these are interlocutory proceedings. The present proceedings should be dealt with in accordance with the overriding purpose of the Supreme Court Rules, namely “to facilitate a just, quick and cheap resolution of the real issues in such proceedings”; see Pt 1 r3(1) SCR. 11 What would inevitably follow were I to accede would not be just, quick or cheap. There would be an inevitable application by the Plaintiff and/or the Second Defendant for leave to file yet further affidavit evidence, resulting in further cost and delay. Delay is particularly important in the present circumstances. All parties wish an early resolution to these proceedings so that rights can be ascertained at least on an interlocutory basis and in order to minimise further financial disruption or hardship.

conclusion

12    Taking all these matters into account and noting that no indemnity for extra costs occasioned by the late filing has been proffered by the First Defendant, in the interests of justice, I am not prepared to permit that late filing of the affidavit.

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Last Modified: 10/20/2000