Premier Building and Consulting Pty Ltd v Spotless Group Ltd (No 11)

[2007] VSC 162

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST

No. 8264 of 2003

PREMIER BUILDING AND CONSULTING PTY LTD (ACN 066 568 367)	Plaintiff
v
SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS	Defendants

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IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST

No. W9/2004

PREMIER BUILDING AND CONSULTING PTY LTD (ACN 066 568 367)	Applicant
v
SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS	Respondents

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IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST

No. W61/2005

NORTH SUBURBAN PROPERTIES PTY LTD (ACN 065 883 614)	Applicant
v
SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS	Respondents

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 March 2007
DATE OF RULING:	27 March 2007
CASE MAY BE CITED AS:	Premier v Spotless (No. 11)
MEDIUM NEUTRAL CITATION:	[2007] VSC 162

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Practice and Procedure – application to re-open case after all evidence and some addresses concluded – application to call accounting witness whose witness statement had been received by consent and without oral evidence – witness statement received on the basis that it was in the nature of a submission as to the effect of accounting material and not as evidence of his opinion – whether purpose for which it is now sought that witness be called was foreseeable at the time of tender – whether prejudice to other parties – application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff (Premier)	Mr J Burnside QC with Mr T Boston	Gadens Lawyers
For the First, Third and Ninthnamed Defendants (Spotless parties)	Mr S G Finch SC with Mr T J Walker and Mr J Slattery	Freehills
For the Secondnamed Defendant (North Suburban)	Mr M Dreyfus QC with Ms Marita Foley	Mirabelli, D’Ortenzio & Co
For the Fourthnamed Defendant (Collie)	Mr R Manly SC with Mr M Whitten	Monahan + Rowell
For the Seventh Defendant (Kilpatrick)	Mr J R Dixon with Ms R Doyle	Slater & Gordon
For the Tenth Defendant (McKenzie)	Mr J Davis with Mr J Lewis	TressCox

HIS HONOUR:

1. Before the Court is an application by Premier to re-open its case to call Mr Smith.  I have determined to refuse the application.  These are my reasons.

1. Before the trial began counsel for Premier foreshadowed that the witness statement of this witness should be received as a submission only and not as evidence.  It was, they said, a road map to guide the Court through a very large number of discovered documents.  These documents occupied, I was told, some 94 boxes.

1. Thereafter counsel for the Spotless Parties seized every opportunity to confirm that Mr Smith's statement was but a submission;  it was not evidence of the facts and conclusions asserted.  Counsel for Premier were also comfortable with this characterisation.  By the end of February 2007 the number of boxes or ledgers was said to be 15.

1. At this stage, counsel for the principal parties concerned with the corporate veil issue were seeking to agree how this statement should be used.  It was generally agreed that it should be treated as Mr Smith's selection of relevant accounting documents and his conclusions from his examination of all the accounting records discovered by the Spotless Parties.

1. These conclusions included negative conclusions such as that a given company did not have a bank account.  What I was told at this stage was already a little confusing.  His express conclusions were drawn from the accounting documents referred to in the text or the footnotes.  These documents were to be tendered and, indeed, this was done.  In addition, I was to be given a list of all the documents with which Mr Smith was provided and which, I would suppose, he had examined.  I was to accept that this list accurately described the discovered documents, but the documents themselves would not be put in evidence unless they had been specifically referred to in the Smith report. 

1. On 27 February 2007 the matter arose again.  Again, counsel for Premier said, without contradiction, that Mr Smith's statement was, in effect, a submission because "it brings together all the underlying documentary evidence".  When I said that I understood that this was so and that he was not to be called to give evidence, counsel for Premier responded: “No, not unless somebody wants him, in which case he can be available”.

1. On the following day the Smith statement was produced for tender, together with the documents referred to in it.  The question then raised by counsel for the Spotless Parties was as to the utility of tendering a list of Spotless discovered documents which were not themselves to be tendered.  This matter was resolved on the basis that I might have regard to the list as evidence of the documents which Mr Smith had looked at.

1. The corollary of that is that I may, by examining the list, obtain an idea of the gaps in those accounting records.  Accordingly, the Smith statement, the list and the supporting documents were received as exhibit 173 with counsel for the Spotless Parties again requesting that I note that the statement was tendered only as a submission.

1. Then there was tendered, as exhibit 174, five folders of Spotless accounting and other documents, together with some comments by Mr Smith.  Counsel for the Spotless Parties again seized the opportunity to remind me that Mr Smith's comments should be received only as a submission.  In response I said that I understood that I was therefore to check the footnoted references to ensure that the comment in question was in fact supported by the accounts.  I said also that unless I was told otherwise, I would proceed on the basis that Mr Smith had:

looked at all the documents that have been produced, the 93 volumes or folders of documents and he’s found no other documents that bear on these issues, bearing in mind his responsibility to put the whole of the material before the court.

1. This was accepted.  As counsel for the Spotless Parties said that they too were preparing a bundle of documents from the discovered material which they would tender on the same basis, they added the following:

As your Honour can imagine, sometimes the outcome is going to be, well, that might be an inference but there's another three inferences and you can't tell, or it might be here's another document negativing the inference, that sort of debate, and we apprehend we are under an obligation to get our other document category into our list of documents and close before we start talking and as I say, we are rushing to do that as quickly as we can.

1. This was on 28 February 2007.  The Spotless Parties' documents were tendered on 29 February 2007 in a bundle as exhibit 177. 

1. The parties closed their cases and final addresses commenced on 5 March 2007.  Counsel for Premier, at my direction, addressed first.  The first difficulty arose when I enquired how I was to approach an assertion by Mr Smith that there was no records of a particular matter.  No footnoted document could support such a submission.

1. The response which was forthcoming was a rather unsatisfactory one:  that if Mr Smith made such an assertion, this should be accepted unless the Spotless Parties or some other party produced a document or otherwise challenged it.  There the matter was left to rest.

1. On 21 March 2007 counsel for the Spotless Parties commenced their final address.  In the course of their submissions on the corporate veil issue they addressed criticisms of Mr Smith's report on a number of bases.  In some cases they said that his conclusions were just wrong;  they showed me documents in evidence which contradicted them.

1. At this point I raised the question that Mr Smith may well have an answer to this apparent inconsistency.  In the ordinary course these matters would have been put to him in cross-examination so that I would have received the benefit of his response.  But, I was told, he was not a witness so cross-examination was not appropriate.  I was reminded that his conclusions were of no greater weight than a submission of fact put from the Bar table.

1. The debate continued in much the same way and reached the, again, rather unsatisfactory conclusion that Mr Smith's statement, while it is described as a submission, like a submission from counsel, nevertheless it could not be relied upon of itself to prove the facts contained in it.  The matter was somewhat alleviated by counsel for Spotless Parties' acceptance that unless they raised a matter of contradiction, I might proceed on the basis of Mr Smith's assertion.

1. The problem which this poses has, I think, been staring everyone in the face from well before the trial started.  It is a basis upon which the parties have been content to conduct the trial and it is too late at this stage to change direction.  I shall just have to do the best I can given the circumstances of the tender and the basis upon which the tender was made.  I should not at this late stage permit Mr Smith to be called to assist his conclusions in evidence and to be cross-examined as might otherwise have been the case.  Accordingly, the application is refused.

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