Traderight (NSW) Pty Ltd (ACN 108 880 968) and Ors v Bank Of Queensland Limited (ACN 009 656 740) (No 12) and 15 related matters

[2012] NSWSC 1363

Supreme Court

New South Wales

Medium Neutral Citation:	Traderight (NSW) Pty Ltd (ACN 108 880 968) & Ors v Bank Of Queensland Limited (ACN 009 656 740) (No 12) and 15 related matters [2012] NSWSC 1363
Hearing dates:	6 November 2012
Decision date:	06 November 2012
Jurisdiction:	Equity Division
Before:	Ball J
Decision:	See paragraph 16 of this judgment
Catchwords:	EVIDENCE - cross-examination - whether party can refuse to produce witness for cross-examination after affidavit has been read - application of UCPR r 35.2 - held that witness not required for cross-examination so long as affidavit is no longer relied upon.
Legislation Cited:	Evidence Act 1995 (NSW) Uniform Civil Procedure Rule 2005 (NSW)
Cases Cited:	Bothranch Pty Ltd v Monitronix Ltd (1989) 15 ACLR 35 In Re Quartz Hill Gold Mining Co. Ex Parte Young (1882) 21 Ch D 642 Varma v Varma [2010] NSWSC 786
Category:	Interlocutory applications
Parties:	Traderight (NSW) Pty Ltd (ACN 108 880 968) (First Plaintiff in 06/258216 and First Defendant in 06/258225) Bronwyn Smith (Second Plaintiff in 06/258216 and Second Defendant in 08/258225) Geoffrey Versace (Third Plaintiff in 06/258216 and Third Defendant in 08/258225) Smith Partners Development Pty Ltd (Fourth Plaintiff in 06/258216) Verich Holdings Pty Ltd (Fifth Plaintiff in 06/258216) Bank of Queensland Limited (ACN 009 656 740 (Defendant in 06/258216; Plaintiff in 08/258225; Plaintiff in 08/279848; Defendant in 08/281332; First Defendant in 08/282126; First Defendant in 08/282304; First Plaintiff in 09/287360; Defendant in 09/287814; First Defendant in 07/256081; Fourth Defendant in 09/287816; First Defendant in 09/287824; Defendant in 10/304306; Defendant in 10/305568; Defendant in 10/306022; Defendant in 10/367086; Defendant in 10/367117) SME Business Assist Pty Limited (ACN 108 524 232) (First Defendant in 08/279848; Tenth Defendant in 09/287360; First Plaintiff in 09/287814; Sixth Plaintiff in 07/256081) Scott Rolfe McCoy (Second Defendant in 08/279848; Eleventh Defendant in 09/287360; Second Plaintiff in 09/287814; Seventh Plaintiff in 07/256081) Geraghty & Palmer (NSW) Pty Ltd (First Plaintiff in 08/281332) Shauna Margaret Geraghty (Second Plaintiff in 08/281332) Barry Palmer (Third Plaintiff in 08/281332) Rossmick No 1 Pty Limited (First Plaintiff in 08/282126; Second Defendant in 09/287360; First Plaintiff in 07/256081; First Plaintiff in 09/287816) Rossmick No 2 Pty Limited (Second Plaintiff in 08/282126; Third Defendant in 09/287360; Second Plaintiff in 07/256081; Second Plaintiff in 09/287816) Michael Bradley (Third Plaintiff in 08/282126; Fourth Defendant in 09/287360; Third Plaintiff in 07/256081; Third Plaintiff in 09/287816) Ross Chapman (Fourth Plaintiff in 08/282126; Fifth Defendant in 09/287360; Fourth Plaintiff in 07/256081; Fourth Plaintiff in 09/287816) Luke Nolan (Fifth Plaintiff in 08/282126; Sixth Defendant in 09/287360; Fifth Plaintiff in 07/256081; Fifth Plaintiff in 09/287816) David Liddy (Second Defendant in 08/282126; Second Plaintiff in 09/287360; Second Defendant in 07/256081; First Defendant in 09/287816; Second Defendant in 09/287824) Jude Financial Services Pty Ltd (ACN 115 763 481) (First Plaintiff in 08/282304; Seventh Defendant in 09/287360; Eighth Plaintiff in 07/256081; First Plaintiff in 09/287824) Russell Jude Edward Gardner (Second Plaintiff in 08/282304; Eighth Defendant in 09/287360; Ninth Plaintiff in 07/256081; Second Plaintiff in 09/287824) Penelope Ann Gardner (Third Plaintiff in 08/282304; Ninth Defendant in 09/287360; Tenth Plaintiff in 07/256081; Third Plaintiff in 09/287824) Industrial Court of New South Wales (First Defendant in 09/287360) Donna Quinn (Third Plaintiff in 09/287360; Third Defendant in 07/256081; Second Defendant in 09/287816; Fourth Defendant in 09/287824) Gary Allsop (Fourth Plaintiff in 09/287360; Fourth Defendant in 07/256081; Third Defendant in 09/287816; Third Defendant in 09/287824) Southpole Financial Services Pty Ltd (First Plaintiff in 10/304306) Harunur Rashid Chowdhury (Second Plaintiff in 10/304306) Iftekhar Tarek Hassan (Third Plaintiff in 10/304306) Ikthedar Hassan Murad (Fourth Plaintiff in 10/304306) Best Deal Pty Limited (ACN 119 366 433) (First Plaintiff in 10/305568) Jeffrey Bruce Jones (Second Plaintiff in 10/305568) LJH Group Pty Limited (ACN 123 507 497) (First Plaintiff in 10/306022) Leslie Xu (Second Plaintiff in 10/306022) Jin Yu Yang (Third Plaintiff in 10/306022) Leokate Pty Ltd (ACN 111 162 068) (First Plaintiff in 10/367086) Stephen Sargent (Second Plaintiff in 10/367086) Lauren Sargent (Third Plaintiff in 10/367086) Shamarbre Pty Ltd (First Plaintiff in 10/367117) Ronald George Johnson (Second Plaintiff in 10/367117)
Representation:	NA Cotman SC with RD Glasson (OMB Parties) S Couper QC with JV Gooley, GAF Connolly and RM Higgins (Bank Parties) McCabes (OMB Parties) HWL Ebsworths (Bank Parties)
File Number(s):

EX TEMPORE Judgment

1. Before me is an application by the Bank of Queensland (the Bank) to require Ms Chen to attend for cross-examination. Ms Chen is the wife of the second plaintiff, Mr Yun Xu, in the LJH Group proceedings and has filed an affidavit in those proceedings.

1. Before dealing with the application itself, it is necessary to say something about the circumstances in which the application is made.

1. These proceedings concern 10 groups of plaintiffs who have brought claims against the Bank arising out of franchise agreements that were entered into by the corporate plaintiffs of each group and the Bank, under which the corporate plaintiffs each operated a branch of the Bank in New South Wales as franchisee.

1. LJH Group, the first plaintiff in the LJH Group proceedings, entered into an agreement on 10 March 2007 to operate a franchise at Hurstville. Mr Xu was one of two directors of the LJH Group.

1. Ms Chen swore an affidavit in support of the plaintiffs' case. That affidavit is said to be relevant to the question of damages. Ms Chen gives evidence of the number of hours of unpaid work she did in connection with the Hurstville branch. She also gives some evidence of the stress her husband was under while LJH Group operated the Hurstville branch. The first type of evidence is relevant to a claim LJH Group makes for unpaid work undertaken by Ms Chen. The second type of evidence is said to be relevant to a claim for general damages made by Mr Xu.

1. In accordance with what is normal practice in the division and this case, the plaintiffs in the LJH Group matter read all their evidence-in-chief and in reply and I dealt with all objections to that evidence before any of the witnesses were cross-examined. Consequently, at the beginning of LJH Group's case, the plaintiffs read Ms Chen's affidavit and I ruled on objections to it.

1. Following that, Mr Xu was cross-examined. During the course of his cross-examination he gave evidence concerning a business he conducted which involved buying computer goods for cash and reselling them on eBay. Mr Xu has pleaded guilty to criminal charges in connection with that business, although the precise nature of his plea remains unclear. Mr Xu also gave evidence that he bought used postage stamps on eBay and used those stamps to post the computer goods he sold. I issued a number of certificates under s 128 of the Evidence Act 1995 (NSW) in respect of the evidence Mr Xu gave. Mr Xu also gave evidence in cross-examination concerning the extent to which his wife was involved in the business. It was following that evidence that the plaintiffs announced that they no longer proposed to call Ms Chen.

1. The Bank submits that that course is not open to the plaintiffs because Ms Chen's affidavit has already been read. In support of that submission, they rely on a number of decisions, including In Re Quartz Hill Gold Mining Co. Ex Parte Young (1882) 21 Ch D 642, Bothranch Pty Ltd v Monitronix Ltd (1989) 15 ACLR 35 at 53 - 55 and Varma v Varma [2010] NSWSC 786, particularly at [337] - [343]. Mr Couper QC, who appeared for the Bank Parties, submits that those decisions establish the proposition that once a party has relied on an affidavit, that party must make the deponent available for cross-examination. Some of the earlier cases proceed on the basis that a party relies on an affidavit when it is filed. Mr Couper accepts that that is no longer the position. However, in his submission a party must be taken to have relied on an affidavit when the affidavit is read and the court rules on objections to it, as was the case, for example, in Varma.

1. That submission does not sit easily with Uniform Civil Procedure Rule 2005 (NSW) (UCPR) r 35.2. That rule provides:

(1) A party may, by written notice served on the party serving or proposing to use an affidavit, require the attendance for cross-examination of the person by whom the affidavit has been made.

(2) Such notice is to be given a reasonable time before the time at which the person is required to attend for cross-examination.

(3) If reasonable notice of such a requirement has been given in respect of an affidavit, and the deponent does not attend for examination, the affidavit may not be used unless the deponent is dead or unless the court orders otherwise.

(4) If a person making an affidavit is cross-examined, the party using the affidavit may re-examine the person.

1. In Mr Couper's submission, however, UCPR r 35.2 does not apply in the circumstances of this case. In his submission, that rule is concerned with a different question - namely, the giving of notice requiring a witness to attend for cross-examination. It cannot apply in this case because the affidavit has already been used.

1. I do not accept that submission. In my opinion, sub-rule (3) applies in this case. Notice has been given for Ms Chen to attend for cross-examination and she has not attended. In my opinion, sub-rule (3) sets out the consequences of that non-attendance. It is difficult to see to what issue sub-rule (3) is addressed, if not to a situation in which a party indicates an intention to rely on an affidavit but then fails to produce the deponent for cross-examination.

1. Two things should be observed about sub-rule (3). First, it speaks in terms of the affidavit being "used". It does not, for example, make the operation of the rule dependent on whether the affidavit has been filed or formally read. Second, the types of use with which the sub-rule is concerned are uses that are sought to be made of the affidavit after the deponent fails to attend for examination at the time expected. That follows from the structure of the sub-rule. The sub-rule contemplates a situation in which the deponent has failed to attend and then describes the consequences - namely, the inability to use the affidavit unless one of the exceptions identified in the sub-rule is satisfied. The most obvious use of an affidavit in this sense is to ask the court to have regard to its contents in determining the issues to which the affidavit is said to be relevant.

1. On this interpretation, no significance attaches to the fact that an affidavit has been filed or, indeed, formally read. Rather, what UCPR r 35.2 says is that an affidavit cannot be used - that is, the court cannot have regard to it in determining the questions to which it is said to be relevant - unless the deponent has been made available for examination or one of the exceptions applies.

1. This result seems to me to be consistent with the practice of the court. Nothing now turns on whether an affidavit has been filed. The practice of formally reading affidavits and dealing with objections at the beginning of a hearing is often adopted as an administrative convenience, rather than as an application of the rights of the parties in relation to the conduct of the trial. It would be unfortunate if that administrative convenience were to have a substantive effect on the rights and obligations of the parties so far as the calling of evidence was concerned.

1. I appreciate that Ward J reached a different conclusion in Varma. However, it appears that her Honour's attention was not drawn to UCPR r 35.2. Had it been, her Honour may well have reached a different conclusion.

1. In my opinion, the consequence of what has happened is that the plaintiffs cannot use the affidavit of Ms Chen in the proceedings. However, it is not a consequence of what has happened that Ms Chen should be required to attend for cross-examination.

**********

Decision last updated: 13 November 2012