PPK Willoughby Pty Ltd v Baird
[2020] NSWSC 1396
•13 October 2020
|
New South Wales |
Case Name: | PPK Willoughby Pty Ltd v Baird |
Medium Neutral Citation: | [2020] NSWSC 1396 |
Hearing Date(s): | 12 October 2020 |
Date of Orders: | 13 October 2020 |
Decision Date: | 13 October 2020 |
Jurisdiction: | Common Law |
Before: | Harrison J |
Decision: | (1) Reject defendants’ tender of email from Deanna Ogilvie dated 19 October 2009. |
Catchwords: | EVIDENCE – where defendants tendered documents in file suggesting receipt of instructions from plaintiff to limit due diligence inquiries on behalf of plaintiff as prospective purchaser – whether email inadmissible as hearsay – relevance of whether subsequent letter sent to or received by plaintiff where no issue related to creation of letter in fact – where file copy capable of supporting inference that limiting instructions received – letter arguably relevant to proof of a fact in issue |
Category: | Procedural rulings |
Parties: | PPK Willoughby Pty Ltd (Plaintiff) |
Representation: | Counsel: |
File Number(s): | 2012/163736 |
Publication Restriction: | Nil |
JUDGMENT
HIS HONOUR: The plaintiff has tendered two folders of material originally collected for the purpose of conveniently cross-examining Mr Wowk, with the exception of two documents that the defendants now wish to have included. The plaintiff objects to the defendants’ proposed tender of those documents.
The first document is an email from Deanna Ogilvie to Sydney–PPK Willoughby Gardens Group dated 19 October 2009. It is specifically addressed to Mr Wowk, and is in the following terms:
“I spoke to Jane this morning and she advised that all dd and advice in regards to the contract pre-exchange was carried out verbally in conferences held with her clients. Given timing constraints no formal reporting was carried out at that time.
She also told me that following exchange she did formally report by way of summary, which was also for the benefit of ANZ at the time. She is looking through this and will send it to me later. Once we have had the chance to look through this plus the other documents forwarded to us she will make herself available for us to run through any issues we may have.
It seems that the title discrepancies may also be resolved as the master plan provided is not an accurate portrayal of the land being purchased. Apparently a new plan is being prepared which will show what land is subject to the contract and upon receipt of this Jane will forward it to us as well.”
The second document is a file copy of a letter nominally from the defendants to Mr Graeme Webb at PPK Holdings Pty Ltd dated 23 October 2009. It is unaddressed, unsigned apart from the printed words “Yours sincerely HWL Ebsworth” and is marked “Copy”. For presently relevant purposes, the letter includes the following:
“We confirm that in the first instance PPK Willoughby Holdings Pty Limited’s (PPK) interest in the property will be that of second mortgagee and shortly following settlement, owner. In accordance with your instructions we have not carried out an extensive due diligence of the property or contract as Kemp Strang have already carried out due diligence verbally with the Purchaser. We have requested a copy of any due diligence or advices prepared by Kemp Strang and have still not been provided with anything. Accordingly, the below advice is based upon our cursory inspection of the contract and ensuring that to the best of our knowledge the property described in the contract matches the land portrayed as being sold by the Vendors.
…
Our advice above in respect of the Terminated Contract and property is based on your instructions that a full due diligence was not to be undertaken and rather the due diligence carried out by Kemp Strang would be relied upon. Until such time as we receive the information we have requested from Kemp Strang we cannot provide further comment without carrying out our own proper due diligence. It is our recommendation that upon receipt of the requested information from Kemp Strang a letter confirming the reliance of PPK on their advice be obtained or failing such, we carry out proper due diligence to ensure your interests are protected.
If you proceed with the second mortgage and acquisition transaction without either of the 2 options we refer to above, we will assume that you have satisfied yourself with the property and proceed on this basis.
We look forward to receiving your instructions.”
The plaintiff objects to the first document upon the basis that it is hearsay and to the second document upon the basis that there is no evidence that the letter was ever sent or received.
In my opinion, the plaintiff’s objection to the first document is good and I reject the tender. The position with respect to the second document is more complicated.
On 12 June 2019, Mr Webb was cross-examined about the HWL Ebsworth letter dated 23 October 2009 as follows:
“Q. … Could the witness be shown volume 11 of the tender bundle. Please go to page 3592?
A. Yes.
Q. Do you see there, it's a letter marked ‘Copy’, dated 23 October 2009?
A. I can see that, yes.
Q. It's to Graeme Webb, PPK Willoughby Holdings Pty Ltd?
A. Yes.
Q. It says, ‘Pamada Willoughby acquisition from RTA and the minister, Willoughby Market Gardens, Willoughby’. Do you see that?
A. I can see that, yes.
Q. Go forward to page 3594, three pages, you'll see it's from Elias Stephen, at HWL Ebsworth?
A. On 3594?
Q. 3594?
A. Yes.
Q. Do you see immediately under the name of Elias Stephen, partner, there the reference to the writer, Deanne Ogilvie?
A. I see that, yes.
Q. Do you know her to be a solicitor at HWL Ebsworth?
A. Yes, I do, or she was.
Q. She was a solicitor there in October 2009?
A. Correct.
Q. Go back to the first page, 2592. There's a reference to previous correspondence in the above matter. It says,
‘We confirm that in the first instance, PPK Willoughby Holding Pty Ltd's interest in the property will be that of a second mortgagee, and shortly following settlement, owner. In accordance with your instructions, we have not carried out an extensive due diligence of the property or contract, as Kemp Strang has already carried out due diligence verbally with the purchaser.’
Do you see that?
A. I can see that.
Q. It says:
‘We have requested a copy of any due diligence or advices prepared by Kemp Strang, and have still not been provided with anything. Accordingly, the below advice is based upon our own cursory inspection of the contract, and ensuring that to the best of our knowledge, the property described in the contract matches the land portrayed as being sold by the vendors.’
Do you see that?
A. I can see that, yes.
Q. That's correct, isn't it, that you instructed HWL Ebsworth that they weren't to carry out an extensive due diligence of the property, because Kemp Strang had already done that?
A. I didn't give that instruction, no. It would have been a suggestion by Mr Wowk, I would have thought.
Q. This is a statement in a letter to you, do you see that?
A. I see that, yes.
Q. It says, ‘In accordance with your instructions’. Do you see that?
A. Well, I didn't give that instruction.
Q. Are you saying the letter's wrong?
A. I'm absolutely saying it's wrong. I did not give any instructions to them not to do due diligence.
Q. Did you give instructions to anyone that Kemp Strang had already carried out due diligence verbally with the purchaser?
A. Absolutely not.
Q. Absolutely not?
A. Sorry, with the purchaser?
Q. Yes?
A. Yes, they were aware of that.
Q. So you told them that?
A. I don't, I don't recall.
Q. How else would they know, Mr Webb?
A. Because Mr Wowk was involved with discussions with Mr Napoli, during the course of these negotiations.
Q. You're just speculating on that, aren't you, Mr Webb?
A. No. And Mr Molloy, we all met.
Q. When you got this letter, you read it?
A. I assume so, I don't even recall the letter.
Q. If you got a letter like this for the purposes of making a $4 million investment, it would be important for you to read it?
A. This is a comment on the terminated contract.
Q. Answer my question. If you got a letter like this
A. I understand the document. I, this is
Q. Mr Webb, just listen to the question?
A. Yeah.
Q. If you received a letter like this, for the purpose of making a $4 million
investment, you would have read it?
A. The contract was terminated.
Q. Please answer the question. If you get a letter from a solicitor about an investment you're proposing to make, it's addressed to you, would you read it?
A. If I got it, yes.
Q. You have no recollection of ringing anyone up from HWL Ebsworth and telling them that the first paragraph was wrong?
A. I don't even recall the letter.
Q. Does that mean the answer to my question, you don't recall ringing anyone up from HWL Ebsworth and telling them the first paragraph is wrong, is also you don't remember that either?
A. I left the due diligence on all this to Jury Wowk. On the Pamada
Q. Can you please just answer my question?
A. I don't recall making a phone call.
Q. Is this the case, Mr Webb, that whenever I ask you a question that you're uncomfortable answering, you revert to a mantra of saying you left the due diligence to my client?
A. It's factual.
Q. You use that mantra to avoid answering my questions. Isn't that right, Mr Webb?
A. No, that's totally incorrect.”
On 18 June 2019, Mr Wowk was asked questions about the same HWL Ebsworth letter as follows:
“Q. The next document, page 150, 152, I just want to ask you if you've seen that document before?
A. I have to read it to be able to answer that.
Q. Yes, if you would.
A. It does ring a bell and that sort of letter, if it was copied to me, I would certainly have read it and, yes, I do recall there being shortcomings with the due diligence that had been done by Kemp Strang on behalf of Pamada in terms of adequacy.
Q. So you considered there were problems with the due diligence?
A. I recall that there was an issue about the adequacy of it. I was not involved in checking it, that was left to Elias and Dan.
Q. Then you don't say, giving evidence today, that the board of PPK considered this letter?
A. I haven't said one way or the other today.
HIS HONOUR
Q. I think you're being asked if you know whether they did?
A. I don't know. I suspect not.”
Ms Ogilvie gave evidence about the letter on 21 June 2019, as follows:
“GREEN: Going then to page 150, you give evidence at paragraph 20 of your affidavit that, ‘Elias and I sent a letter to PPK on 23 October 2009.’ Do you see that?
A. Yes.
Q. That is not something which appears in your statement, is it?
…
WITNESS: No, it doesn't.
Q. Do you recall the circumstances in which paragraph 20 came to be written in that form?
A. No, I
GREEN: I'm referring to MFI 3, your Honour, of course.
WITNESS: I don't recall how it was prepared. I assume Lisa Schumacher prepared it and I agreed with it based on she produced this letter.
Q. I want you to have a look at pages 150 to 152. Do you recall this document?
A. I don't specifically recall it other than the fact that it exists and it's here.
Q. You only recall it because it's annexed to your affidavit?
A. Yes.
Q. Do you see it's unsigned?
A. Yes.
Q. Do you see at the front of it it has not address and no email or postal address?
A. Yes.
Q. You agree that's unusual?
A. Not particularly. It could have been sent by email but the email wasn't noted at the top of the letter.
Q. The practice would have been the email would have been there, wouldn't it, if that was your practice?
A. I don't recall.
Q. I put it to you that this letter just remained as a copy and was never finalised or sent?
A. I can't confirm either way.
Q. The matter number 184198 appears at ‘our ref’, do you see that?
A. Yes.
Q. Matter number 184198 was a matter to do with due diligence, wasn't it?
A. I don't recall what the matter specifically was for.
Q. But it was one of the matters that you reviewed at the time in which you came to make your original statement MFI 11, wasn't it?
A. I would assume so if that was the matter that I had. I don't recall though.
Q. But you can't now confirm whether you sent this letter or not, can you, sitting giving evidence today?
A. I don't have a recollection of it, no.
Q. You didn't have a recollection at the time at which you made your affidavit on 14 June 2017 either, did you?
A. I don't have a recollection of sending it but there is a copy of the letter, and if there's a copy on the file it's assumed to be a file copy which would have been sent. There was no reason to suspect it hadn't been.
Q. The reason to suspect it hadn't been is there is no address on it, so it couldn't have been posted, and there's no evidence to suggest that there was any cover email to that letter, was there?
A. I wasn't provided with one, unless it's on the file.
Q. So another possibility is it was a letter that you wrote for Mr Elias Stephen, for his consideration; it was placed on a file somewhere and was never sent?
A. I can't confirm whether that's the case.
Q. You would accept that as a possibility?
A. It's a possibly; whether it's the case, I don't know.
Q. It's a possibility because overtook for example, matters changed or time overtook and, therefore, something wasn't sent, for example?
A. I don't know.”
Ms Ogilvie’s 14 June 2017 affidavit referred to this letter in the following terms:
“On 23 October 2009, Elias and I sent a letter to PPK providing our advice on the due diligence undertaken by HWLE on the purchase of the property. A copy of the letter from HWLE to PPK dated 23 October 2009 is at [14].”
The plaintiff contended that this evidence did not support a finding or a conclusion that a letter, of which the document sought to be tendered by the defendants is said to be a copy, was ever sent by the defendants or received by the plaintiff. However, the plaintiff does not contend, and specifically disavows any suggestion, that the copy contained in the defendants’ discovered file was not placed there, and accordingly came into existence, at or about the date that it bears. Indeed, there is evidence, in the form of the defendants’ memorandum of fees for the relevant period, that they invoiced the plaintiff for a letter dated 23 October 2009, which the plaintiff uncontroversially accepts refers to the letter in question. The plaintiff maintains that a charge raised for the preparation of the letter does not of itself support the conclusion that it was actually sent, relying in particular for that submission upon the quoted evidence of Mr Webb. Moreover, the letter invited a response from the plaintiff and the evidence in this case does not disclose that a response was made.
Obviously enough, the defendants wish to rely upon the letter in support of their contention that they were instructed by the plaintiff not to pursue a comprehensive due diligence enquiry. It is not for me currently to decide that question although it will presumably achieve significance in the outcome of the proceedings. For present purposes, the issue is not whether the letter was sent or received but whether the creation of the letter in the defendants’ file is relevantly capable of supporting a finding that the defendants were given the limiting instructions for which they contend. Restricted to a consideration of the present application, it occurs to me as a matter of high probability that a file copy of a letter in the terms described would not have been generated unless the putative instructions had been given, or at least that the defendants understood that they had been given: the letter reads in terms as a file note of something that required confirmation. It is clearly relevant to the proof of the probability of a fact in issue. The broader question of whether or not the finding promoted by the defendants ought ultimately to be made remains to be seen.
In my view, the letter is relevant and should be admitted.
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