Victorian X-Ray Group Pty Ltd v Malouf t/a Malouf Solicitors (No 2)

[2024] NSWSC 887

Supreme Court

New South Wales

Medium Neutral Citation:	Victorian X-Ray Group Pty Ltd v Malouf t/a Malouf Solicitors (No 2) [2024] NSWSC 887
Hearing dates:	09 April 2024
Date of orders:	09 April 2024
Decision date:	09 April 2024
Jurisdiction:	Common Law
Before:	Cavanagh J
Decision:	(1) Pages 1 to 8 and pages 233 to 275 are not admissible. I will strike them from Exhibit N.
Catchwords:	EVIDENCE – Documentary evidence – Business records – where plaintiffs sought to admit resolutions of companies under the control of one of the plaintiffs to prove a continuing obligation on behalf of the plaintiffs to repay monies to these “related entities” –whether these resolutions were produced for the purposes of or in connection with the present litigation
Legislation Cited:	Evidence Act 1995 (NSW)
Category:	Procedural rulings
Parties:	Victorian X-Ray Group (Dandenong) Pty Ltd (First plaintiff) Victorian X-Ray Group (Boronia) Pty Ltd (Second plaintiff) Bevyn Thomas White (Third plaintiff) Anthony Malouf trading as Malouf Solicitors (Defendant)
Representation:	Counsel: M Luitingh (Plaintiffs) A Avery-Williams with P Boyle (Defendant) Solicitors: Jane Button & Associates Pty Ltd (Plaintiffs) Sparke Helmore Lawyers (Defendant)
File Number(s):	2021/00139605
Publication restriction:	None

EX TEMPORE JUDGMENT (REVISED)

1. This matter comes before me today for the purposes of a further hearing on damages issues.

2. When the matter was last before me on 6 December 2023 the parties indicated they were unable to reach agreement on the damages issues. I made an order permitting the plaintiff to adduce further evidence to establish the loss.

3. As I indicated on that day, the point is a narrow and discrete point. The issue is who paid the bills. The defendant says that the plaintiffs, that is the is the three plaintiffs, being Victorian X-Ray Group (“VXG”) Dandenong, VXG Boronia and Mr White on behalf of VXG Balwyn, have not established that they have suffered losses because they have not established that they paid the defendant's fees or paid the costs orders in favour of Philips Healthcare (“Philips") in the District Court.

4. The position has been reached today that there is agreement that the plaintiffs have established losses in the amount of $887,613.12 but that amount is only a part of the total amount paid in costs to the defendant or to Philips. It is an agreed position that a number of companies related to the plaintiff paid additional sums, that is additional to the $887,613.12 by way of the liability to the defendant and Philips.

5. The plaintiffs seek to recover those additional amounts not on the basis that they have actually paid those additional amounts but on the basis that they have a liability to pay those additional amounts, that is the liability to reimburse the related companies who were paid those additional amounts. The defendant does not accept that any such liability exists having not been served with loan agreements or other documents that might normally exist in circumstances in which one legal entity paid the debt owing by another legal entity on the basis that that second legal entity would at some stage reimburse the first legal entity in respect of the amount.

6. Whilst the parties have endeavoured to reach agreement as far as they can on the evidence and on the plaintiffs' claims for loss, there remains an impasse and a substantial disagreement between the parties as to what the plaintiffs can and have proved. This has led to the provision of a further one volume court book on damages which I have marked Exhibit N. The parties have provided extensive written oral submissions.

7. At this stage I am only dealing with an admissibility issue. The defendant objects to some of the material in Exhibit N. While the defendant does not object to schedules and letters from the solicitors for the plaintiffs or even the financial accounts of the various companies which paid the legal costs owing to Philips or Mr Malouf, the defendant objects to what appears to be resolutions of various companies which purport to evidence the plaintiffs' claim that one or other of the plaintiffs are liable to reimburse other companies, that is the related companies in respect to the amounts paid by the related companies.

8. The defendant thus objects to all of the documents commencing at page 233 of Exhibit N being what may be described as “Resolution of Directors” purporting to establish what are inter-plaintiff loans, that is between one corporate plaintiff and another corporate plaintiff, on the grounds that they are not relevant.

9. They are said not to be relevant because the defendant is not taking the point that it is necessary for each of the individual plaintiffs to establish which of those individual plaintiffs has paid which amount. That is, the defendant accepts that if the costs which are said to comprise the damages have been paid by one or other of the individual plaintiffs then those amounts will be recoverable.

10. The position reached on behalf of the plaintiffs is thus then that it is agreed that the inter-plaintiff resolutions are not relevant because there is no issue taken by the defendant which the plaintiffs need to prove.

11. However, the defendant takes a different position with the purported resolutions made by the related companies, that is non-plaintiff companies. For example, they purport to be resolutions of companies VXG Carlton Pty Ltd, Queensland X-Ray Group Pty Ltd, Victorian Diagnostic Group Pty Ltd and other companies seemingly all of which Mr White is the sole director.

12. The defendant objects to these documents on the basis that the documents contain hearsay representations and are not business records. The defendant submits that the documents plainly came into existence for the purpose of conducting, or contemplation in connection with, these proceedings.

13. I accept that submission. Mr White prepared resolutions on behalf of all these related companies consequent to my order that the plaintiffs be entitled to adduce further evidence on loss. He prepared these resolutions in connection with these proceedings. There can be no other purpose.

14. Further, as is evident from each resolution, the document purports to represent the existence of a loan agreement between a related company and either Mr White or one of the other plaintiffs. Plainly there are hearsay representations contained within the documents.

15. In the end I do not apprehend Mr Luitingh to be disputing this, albeit he originally made a number of submissions about it. Mr Luitingh submits that even if I so find these documents are not business records and thus do not fall within the exception to the hearsay rules, I would still admit them. He points to paragraphs 19 to 25 of his written submissions. Those paragraphs refer to the well-established principles which the Court applies when considering the question of loss and the difficulties in proving loss in certain cases. As is submitted, in some cases the Court must do the best it can to determine damages even in circumstances in which the evidence of loss is limited.

16. I accept those submissions and the principles referred to therein but none of those submissions relate to the question of admissibility. They relate to the principles which must be applied when actually assessing the damages. I invited Mr Luitingh to take me to any other parts of the Evidence Act 1995 (NSW) which might suggest that the resolutions would be otherwise admissible. He was unable to point to any parts of the Evidence Act which would render the documents admissible. Ultimately, he fell back on my general power to make any order when serving the administration of justice.

17. I do not think that my general power should be exercised as a means of circumventing the provisions of the Evidence Act.

Orders

18. In the circumstances, the orders I make are as follows:

1. Pages 1 to 8 and pages 233 to 275 are not admissible. I will strike them from Exhibit N.

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Decision last updated: 23 July 2024