West Coast Transport Pty Ltd and Anor v; Adams Group Services Pty Ltd and Anor
[2001] TASSC 57
•17 May 2001
[2001] TASSC 57
CITATION:West Coast Transport Pty Ltd & Anor v
Adams Group Services Pty Ltd & Anor [2001] TASSC 57
PARTIES: WEST COAST TRANSPORT PTY LTD
ACN 067 218 893
DE BRUYN & SON PTY LTD
ACN 059 926 322
v
ADAMS GROUP SERVICES PTY LTD
ACN 070 871 279
ADAMS, Rawson
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 63/2000
DELIVERED ON: 17 May 2001
DELIVERED AT: Hobart
HEARING DATES: 19 October, 29 November 2000, 4 May 2001
JUDGMENT OF: Master Holt
CATCHWORDS:
Procedure - Judgments and orders - Setting aside - Defence on the merits.
Shocked & Anor v Goldschmidt & Ors [1998] 1 All ER 372; Evans v Bartlam [1937] AC 473; Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR(NSW) 239; Grimshaw v Dunbar [1953] 1 QB 408, referred to.
Aust Dig Procedure [269]
Evidence - Affidavits and statutory declarations - Cross-examination of deponent.
ANZ Banking Group Limited v McCallum 74/1991 ([1991] Tas R (NC 21) 376; Re Dairy Analytical Laboratories Pty Ltd (In Liq) 104/1972; Sullivan v Henderson [1973] 1 All ER 48; Saunders v Hammond [1965] QWN 39; Re O'Neil [1972] VR 327; Shaw & Anor v Harris & Ors(No 2) (1993) 3 Tas R 167, referred to.
Aust Dig Evidence [252]
REPRESENTATION:
Counsel:
Plaintiffs: K J Stanton and M Carey
Defendants: S B McElwaine
Solicitors:
Plaintiffs: Shields Heritage
Defendants: S B McElwaine
Judgment Number: [2001] TASSC 57
Number of Paragraphs: 22
Serial No 57/2001
File No 63/2000
WEST COAST TRANSPORT PTY LTD ACN 067 218 893
De BRUYN & SON PTY LTD ACN 059 926 322 v
ADAMS GROUP SERVICES PTY LTD ACN 070 871 279
RAWSON ADAMS
REASONS FOR JUDGMENT MASTER HOLT
17 May 2001
The application
The defendants have applied for an order setting aside an interlocutory judgment in default of defence entered 8 August 2000 for damages to be assessed. The judgment was entered in the following circumstances. The writ which had annexed the statement of claim, was filed on 1 May 2000. Both defendants are located in Victoria and the period limited on the writ for the filing of a notice of appearance was 21 days. There is no evidence as to the date of service of the writ on each defendant, but on 3 July 2000, a notice of appearance was purportedly filed by the defendants' Victorian solicitor. It may be that the Victorian solicitor was not entitled to practise in the State of Tasmania and on 17 July 2000, a new notice of appearance was filed on behalf of the defendants by Tasmanian solicitors. On 7 August 2000, the Victorian solicitor notified the plaintiffs' solicitor that instructions had been received for a defence; that he expected to forward a draft defence to the defendants' Tasmanian solicitors on the record on 9 August and expected the defence to be delivered to the plaintiffs' Tasmanian solicitor on Friday 11 August, or Monday 14 August, "at the latest". Presumably by this time the time limited for delivery of defence had expired, as the Victorian solicitor asked the plaintiffs' solicitor for his "brief indulgence". At 6pm on 7 August, the plaintiffs' solicitor sent an e-mail advising that the indulgence sought would not be afforded. On 8 August, the Victorian solicitor telephoned the plaintiffs' solicitor and was advised that judgment in default of defence had been entered that day. The Victorian solicitor said in a letter to the plaintiffs' solicitor dated 8 August 2000 that the defendants intended to apply to have the judgment set aside. The application to set aside the judgment was filed on 18 August.
The Supreme Court Rules 2000, r355, provides:
"Any judgment by default under these Orders may be set aside or varied by the Court or a judge either unconditionally or on any terms the Court or a judge considers appropriate."
The discretion is not fettered by the terms of the rule. The principles upon which the discretion is to be exercised, however, are well established by the cases, a useful collection of which is contained in Shocked & Anor v Goldschmidt & Ors [1998] 1 All ER 372. The cases fall into two categories. The first category is where judgment is given in default of appearance or pleading or discovery and the second is where judgment is given after trial has occurred in the absence of the party who seeks to have it set aside. In the second class of case, the predominant consideration is usually the reason why the party against whom the judgment was given absented himself from the trial. In the first class of case, into which this matter falls, the predominant consideration is usually whether there is a defence on the merits. In addition to this predominant consideration, regard will be had to the explanation for the default; the explanation for any delay in promptly instituting proceedings to have the judgment set aside; and whether a belated trial will cause prejudice to the plaintiff which cannot be adequately compensated by a suitable award of costs. Although these matters are usual considerations, they should not be regarded as laying down rigid rules which would deprive the Court of the general discretion which the rule confers, Evans v Bartlam [1937] AC 473 at 481 - 482. As Sir Frederick Jordan put the matter in Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR(NSW) 239 at 243 - 244:
"The question is whether, upon the material that has been placed before us, there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to the plaintiff. If not, we should not interfere."
It is not for the court to determine whether the proposed defence is likely to fail or likely to succeed on the trial of the action. Although Grimshaw v Dunbar [1953] 1 QB 408 was a case concerning a judgment which had been entered against a defendant who had absented himself from the trial, the observations of Jenkins LJ as to the inquiry as to merit are pertinent. He said, at 416:
"Then there is a more debatable point, as I regard it, as to how far the judge should consider the prospects of success of the party applying for a new trial. No doubt the judge is entitled to satisfy himself that the party applying has a bona fide intention of defending the action, and that there is some possibility of his doing so with success. For example, I apprehend that if an admitted and self-confessed trespasser allowed judgment for possession to go in default in his absence, the judge would be entitled, on an application for a new trial, to refuse on the ground that he was palpably a trespasser and could not, whatever evidence he gave, possibly justify his presence in the house. But, short of cases of that kind, I think that a new trial should seldom, if ever, be refused merely on the ground that the applicant's case appears to be a weak one, and it is, moreover, difficult to see how the tenant's case here could on the face of it be classed as obviously weak in view of the payment into court. Be that as it may, a party to an action is prima facie entitled to have it heard in his presence; he is entitled to dispute his opponent's case and cross-examine his opponent's witnesses, and he is entitled to call his own witnesses and give his own evidence before the court. Prima facie that is his right, and if by some mischance or accident a party is shut out from that right and an order is made in his absence, then common justice demands, so far as it can be given effect to without injustice to other parties, that that litigant who is accidentally absent should be allowed to come to the court and present his case ¾ no doubt on suitable terms as to costs ...".
Defence on the merits
The first plaintiff alleges:
· By an agreement partly written and partly oral entered into in about August 1999, the first plaintiff agreed at the request of the first defendant, to transport a dismantled paper machine from Burnie to Melbourne at an agreed cost per container and per trailer involved in the transportation.
· The paper machine was transported at a charge in accordance with the agreement of $58,707.03, of which only $5,895 was paid, leaving a balance owing of $52,812.03.
· The balance sum of $52,812.03 has been due and unpaid since 14 March 2000 and that from that date, the first plaintiff has been left to pay interest on that amount on its bank overdraft account.
The second plaintiff alleges:
· That by an oral agreement made between the second plaintiff and the first defendant in about December 1996, the second plaintiff agreed to store the paper machine at Devonport for $800 per month. The discussions which constituted the agreement were between Mr De Bruyn, on behalf of the second plaintiff, and Mr Rawson Adams, the second defendant and a director of the first defendant.
· The machine was stored as requested until 31 August 1999, but payments were not made for the storage for the 19 month period between 31 January 1998 and 31 August 1999, the amount unpaid being a little over $15,000.
· The storage costs have been due and unpaid since 31 August 1999 and that from that date, the second plaintiff has been left to pay interest on the amount owing on its bank overdraft account.
The plaintiffs allege that the second defendant is personally liable to compensate them for their losses as a result of the breaches of the first defendant on the bases that:
· The second defendant was, at all material times, a director of, and agent for, the first defendant.
· The transportation agreement and the storage agreement were negotiated by the second defendant, on behalf of the first defendant.
· In the negotiations, the second defendant represented that the transportation and storage costs would be paid by the first defendant.
· The representations were made in trade or commerce; were misleading or deceptive or likely to mislead or deceive; and the plaintiffs entered into the agreements and performed their obligations relying on the representations.
· As a result, the plaintiffs suffered loss and damage.
The plaintiffs respectively claim against the first defendant the amount owing for the transportation and the amount owing for the storage charges. They also claim damages, being the interest incurred on their overdraft accounts. The plaintiffs claim against the second defendant, damages pursuant to the Fair Trading Act 1990, for misleading or deceptive conduct.
The affidavit of the second defendant, Mr Adams, sworn 16 October 2000 and read into evidence, contains (inter alia) the following assertions of fact:
· In about 1993 or 1994, the first defendant contracted to purchase the paper making machine which was located at Burnie.
· In about 1996, the first defendant negotiated to sell the machine to a company in Bangladesh. At about the same time, Mr Adams, a director of the first defendant, first met Mr De Bruyn, whom he understood to represent the plaintiff, West Coast Transport Pty Ltd. Mr Adams advised Mr De Bruyn that ultimately the machine was to be sent overseas. Mr De Bruyn said that he would store the machine in his yard, in the meantime.
· The sale of the machine to the Bangladesh purchaser was never completed.
· No accounts for storage were issued prior to January 1998, and, prior to then, Mr Adams had no knowledge of the second plaintiff.
· In late 1997 or early 1998, Mr De Bruyn asked Mr Adams whether he could relocate the machine to adjacent premises and Mr Adams approved the relocation.
· In July 1998, after the machine had been relocated, Mr Adams was advised by a contractor that recent damage had occurred to two calendar rolls forming part of the machine.
· In September 1998, the first defendant wrote to the second plaintiff saying that it held the second plaintiff accountable for the damage and that replacement of the two calendar rolls would cost about $28,000.
· The situation with the two damaged calendar rolls remained unresolved and in August 1999, the first defendant arranged for the first plaintiff to transport the machine to Melbourne "to be refurbished and modified".
· Upon arrival in Melbourne, a neoprene covered vacuum press roll was discovered to have been damaged. The damage was consistent with a steel chain having been placed around it and was such as to render the vacuum press roll useless. On 12 October 1999, the first defendant wrote to the first plaintiff, complaining about the damage to the vacuum press roll.
· On 20 October 1999, the plaintiffs' then solicitors wrote to the first defendant's solicitor in Victoria, advising that the first plaintiff was prepared to submit a claim to its insurer with respect to the two calendar rolls damaged prior to July 1998, but advising that liability was denied for the damage to one of the calendar rolls. The letter denied liability in respect of the damage to the vacuum press roll.
· By letter dated 9 November 1999 from the solicitor for the first defendant to the then solicitors for the plaintiffs, the first defendant advised that transportation and storage costs would not be paid because the amount of those costs was exceeded by the cost of rectifying the damage to the calendar rolls and the vacuum press roll.
Annexed to the affidavit of Mr Adams was a copy of the defence and counterclaim proposed to be filed. In that document, the damage to the calendar rolls and vacuum press roll is alleged, set-offs are claimed and the balance counterclaimed. It is alleged that the 1996 storage agreement was with the first plaintiff and not the second plaintiff, and all of the allegations in respect of the alleged liability of the second defendant are denied.
When the hearing commenced on 19 October 2000, Mr Adams submitted to cross-examination. Cross-examination on that day occupies in excess of 50 pages of the transcript. Mr Adams was unable to produce a number of documents requested by the cross-examiner, and the hearing was adjourned to enable the documents to be produced. The cross-examination resumed on 29 November 2000 and on that day, occupies in excess of 60 pages of the transcript. It was still not completed. Although court time was available in the meantime, the hearing did not resume until 4 May 2001. On that date, the defendants retained new counsel, who informed me that Mr Adams would not submit to further cross-examination. I exempted Mr Adams from submitting to further cross-examination, the reasons for which appear later.
The evidence which Mr Adams gave under cross-examination was generally confusing and, in a number of respects, was inconsistent with the contents of his affidavit. There is no need, however, for me to deal in particular with any aspect of the evidence given in cross-examination. As I said earlier, the inquiry, at this stage, so far as a meritorious defence is concerned, is whether the defendants "have a bona fide intention of defending the action, and that there is some possibility of [them] doing so with success". Grimshaw v Dunbar (supra). The allegations in Mr Adam's affidavit and the proposed defence that the machine was owned by the first defendant and that parts of it were damaged in storage or transit, were not demonstrated to be untenable. Questions as to the nature and extent of the damage; the circumstances in which it occurred; and whether the plaintiffs are responsible to the first defendant for it, are all appropriately dealt with at a trial after the parties have exhausted their entitlements to pre-trial discovery of documents and facts and the whole of the evidence can be presented and assessed.
So far as the claim against the second defendant is concerned, the allegations are founded on oral representations. Questions such as precisely what the representations were, whether there were reasonable grounds for making them, and whether the plaintiffs suffered any loss or damage as a result of them, would need to be determined if the matter goes to trial. Here, if the plaintiffs find themselves unable to recover against the first defendant because they are responsible for damage to the first defendant's property, their loss would, on the face of it, appear to have been occasioned because of their liability to the first defendant, and not because of any representation made to them by the second defendant. In any event, I am of the view that the issue of whether and, if so, in what circumstances, a director who negotiates a contract on behalf of his company can be held to be personally liable for its performance, ought be determined only after trial and with the benefit of detailed submissions.
Other considerations
The judgment was entered in default of delivery of defence. The writ and statement of claim, I infer, were served by no later than the date upon which the Victorian solicitor purported to give a notice of appearance, namely 3 July 2000. Instructions for the defence did not issue to the defendants' Victorian solicitor until 4 August 2000. Mr Adams said in his affidavit that in the month prior to 4 August, he had business commitments taking him away from his office in Melbourne on two occasions; that he had to devote time to the care of his wife who had been in hospital and was undergoing tests for cancer and that his co-director had undergone cancer related surgery in the week immediately preceding 4 August 2000. This evidence was not challenged on the two days that cross-examination occurred. When I heard submissions on the last hearing day, namely 4 May 2001, as to whether Mr Adams ought be exempted from further submission to cross-examination, there was no suggestion from counsel for the plaintiffs that he wished to challenge the assertions in the affidavit regarding business commitments or the ill-health of Mr Adams' wife and co-director. Mr Adams in fact issued instructions to his solicitors for a defence prior to the entry of the default judgment on 8 August 2000. The delay was short and the background in which it occurred makes it understandable.
Prior to the institution of the proceedings, the plaintiffs' solicitors had been advised of the first defendant's allegation of damage to the equipment transported and stored and the claim for a set-off. An appearance had been filed; a request for a very short extension of time for the delivery of defence had been made; and almost contemporaneously the plaintiffs denied the request and caused the judgment to be entered. At the hearing, the plaintiffs did not attempt to explain what, on the face of it, appeared to be an unnecessarily terse response to issues the plaintiffs had been notified were in dispute and the short delay and modest request for an extension of time. I take into account that the default judgment was entered on such short notice that the defendants did not have any real opportunity to remedy the default before the sword of Damocles fell.
There was no assertion on behalf of the plaintiffs that the delay between notice of the judgment on 8 August 2000 and the filing of the application to set it aside on 18 August 2000, was material, and no suggestion that setting aside the judgment will result in injustice to the plaintiffs.
Conclusion
I have found that there is a defence on the merits. I regard that matter as being the primary consideration. In the circumstances of this case, there is nothing to be weighed against it. The default has been satisfactorily explained; there was no delay in filing the application to set the judgment aside; and there was no assertion of prejudice to the plaintiffs. The justice of the case requires the judgment to be set aside. I am reinforced in this view by the fact the judgment was entered in the knowledge that a dispute existed; that the defendants had solicitors on the record; and in the face of a request for a very short extension of the time within which the defence was to be delivered.
Exempting the deponent of an affidavit of merits from submitting to further cross-examination
As indicated earlier in these reasons, the affidavit of Mr Adams was read into evidence. A notice to attend for cross-examination had issued and Mr Adams attended on two occasions during which he was extensively cross-examined. On the third day of the hearing, I exempted him from submitting to further cross-examination. It is appropriate that I publish my reasons for so doing.
Mr Adams' affidavit was principally concerned with setting out the facts upon which it was proposed to defend the claim. It also contained an explanation for the delay in delivery of the defence. On the hearing of the application for the exemption, submissions were made to the effect that in proceedings of this kind where the inquiry is merely as to whether there is a bona fide intention to defend and whether the foreshadowed defence has some possibility of success, cross-examination on the merits, except in exceptional cases, is unlikely to result in a court concluding on the limited materials available at that stage, that the prospective defence is completely untenable. Of course, the situation is different so far as any explanation for allowing the judgment to be entered by default is concerned. That is a matter for the court to consider finally upon the hearing of the set aside application. Counsel for the plaintiffs, in responding to the exemption application, did not suggest that cross-examination was intended and ought be permitted on the issue of the explanation. Accordingly, I dealt with the application on the basis that all further cross-examination would be directed to the merits of the defence.
By the resumption of the hearing on 4 May 2001, the defendants had appointed new counsel from Victoria. Counsel initially told me that there was no right in proceedings to set aside a default judgment to cross-examine the deponent on an affidavit of merits. That proposition would have been correct were the proceedings being conducted in the Supreme Court of Victoria. The Victorian Rules, O40, r4, is as follows:
"(1) Where an affidavit is filed in any proceedings, the court may order that the deponent be examined before the court and may order that he attend for that purpose at such time and place as it directs.
(2) Unless the court otherwise orders, a party to a proceeding commenced by originating motion on whose behalf an affidavit is filed in the proceedings shall cause the deponent to attend at the trial of the proceedings to be examined if notice that such attendance is required is served on the party by any other party a reasonable time before the commencement of the trial.
(3) Where a deponent in respect of whom an order is made under par(1) or a notice is served under par(2) does not attend for examination the court may order that the affidavit be not received into evidence."
On an interlocutory application in an action in the Victorian Supreme Court, the maker of an affidavit is not required to attend to be cross-examined before his affidavit can be received into evidence, except by order of the court. Counsel admitted that he had not read the applicable rule for this jurisdiction. The Tasmanian Supreme Court Rules, r463, provides:
"463 ¾ (1) A party seeking to cross-examine a deponent on an affidavit filed on behalf of an opposite party may serve on that opposite party a notice requiring the production of the deponent for cross-examination at the hearing of the proceeding.
(2) The affidavit is not to be used as evidence unless —
(a)the deponent is produced according to the notice; or
(b)the Court or a judge makes an order under subrule (4) exempting the deponent from attending for cross-examination; or
(c)the Court or a judge grants special leave for its use.
(3) A party served with a notice under subrule (1) may apply to the Court or a judge for an order exempting the deponent named in the notice from attending for cross-examination.
(4) On an application under subrule (3), the Court or a judge may make an order exempting a deponent from attending for cross-examination if the deponent's attendance is not necessary in the interests of justice having regard to —
(a)the circumstances of the case; and
(b)the subject matter of the proceeding; and
(c)the cost of procuring the attendance of the deponent.
(5) Unless the Court or a judge makes an order under subrule (4), the party on whom a notice under subrule (1) is served is entitled to compel the attendance of the deponent for cross-examination in the same way as that party may compel the attendance of a witness to be examined.
(6) A party who produces a deponent for cross-examination is not entitled to demand the expenses of that attendance in the first instance from the party requiring the attendance."
Dealing with its equivalent under the 1965 Rules, Zeeman J said in ANZ Banking Group Limited v McCallum 74/1991 ([1991] Tas R (NC 21) 376):
"Having been given notice under O41, r34(1) the defendant is in the position that without my leave his affidavits will not be evidence unless the defendant is produced for cross-examination. It is for the defendant to obtain leave if he wishes to read the affidavits without submitting to cross-examination.
…I rule that the defendant's affidavits may not be used unless the defendant is produced for cross-examination or unless I grant special leave permitting those affidavits to be used without the defendant being so produced."
After reading r463, counsel for the defendants applied for the exemption.
Because the Tasmanian rule is unusual so far as the use of affidavits on interlocutory applications is concerned, there is very little case law directly in point. The equivalent of the rule was considered by Chambers J in Re Dairy Analytical Laboratories Pty Ltd (In Liq) 104/1972. There, his Honour, relying upon The Parisian 13 P D 16, said that it is a relevant consideration whether or not the deponent is a party and listed as other considerations the importance of what is deposed (although he said that this factor would rarely be determinative because if the affidavit was important to the party attempting to use it, it would be of equal importance to the party wishing to challenge it) and also whether there was a reasonable explanation for the non-production of the deponent. He went on to say that if leave is given, the weight of the affidavit must be effected by the fact that the deponent has not been cross-examined. The observations, however, were not made upon the hearing of an interlocutory application, but upon the hearing of an application for a final order, namely an order reversing the decision of a liquidator to reject a creditor's claim. Plainly, where affidavits are to be used in proceedings which finally determine rights, the factors mentioned by Chambers J will be of considerable significance.
The situation, however, is different where an affidavit is to be used, not to establish any right or finally resist any claim, but simply for the purpose of disclosing that there is a viable defence to a claim and the defendant ought be allowed to defend at trial. This issue arises, not only in applications to set aside default judgments, but also where a defendant seeks leave to defend upon an application by the plaintiff for summary judgment. I set out below some observations of Megarry J in Sullivan v Henderson [1973] 1 All ER 48. Although his Honour was dealing with the issue of whether or not leave to defend ought be given consequent upon a summary judgment application and dealing with rules that did not require a deponent to be present for cross-examination on such an application, except by order of the court, the observations have direct relevance to a preliminary enquiry as to merits, on a set aside judgment application. Megarry J said at 50 and 51:
"On 22 March 1972 the Master made an order giving the plaintiff unrestricted liberty to cross-examine the defendant on his affidavit; and I was told that a previous order of the Master, made on 15th December 1971, gave the plaintiff leave to adduce oral evidence in reply on giving written notice, which notice was duly given. The result of these orders, coupled with the fact that the defendant appeared in person, has led to the adduction of full and detailed oral evidence about all aspects of the disputed transaction, and much else besides. What in theory was to be a hearing to decide whether in effect leave to defend should be given, or whether summary judgment should be entered for the plaintiff for specific performance, became in fact a virtual trial of the action. This is not what RSC Ord 86, as I understand it, is intended for; nor is the case in a very satisfactory state, because, having been brought under the summons, there has been no discovery of documents, and no pleadings, apart from the short statement of claim endorsed on the writ.
…The summary process under RSC Ord 86 is one thing, and the trial of an action is another: a hearing under RSC Ord 86 with oral evidence is liable to become neither one nor the other, and to share the disadvantages of each. The hearing ceases to be summary, and the absence of pleadings and discovery, for example, prevents the hearing from achieving the exhaustiveness of a trial. The court may be put in the position, at the end of a two day hearing, of saying that there ought to be a trial of the action, in which case there will then be a repetition of much that has occupied the court and the parties during the hearing under RSC Ord 86."
I have been able to find only one case where cross-examination following objection was permitted on an affidavit as to merits in proceedings of this kind. In Saunders v Hammond [1965] QWN 39, according to the case note, the plaintiff had obtained a judgment in default of defence and an application was made to set it aside. There being no procedure in Queensland to entitle cross-examination on the affidavit as a matter of right, an application was made for leave to cross-examine. Wanstall J, having heard a submission that the affidavit was unsatisfactory and incomplete so far as a particular conversation referred to in the affidavit was concerned, and that it was desirable that there be further inquiries as to the deponent's full version of that conversation and that the matter could be dealt with without asking the court to decide questions of credit, granted limited leave to cross-examine. There is nothing in the case to suggest that as a general rule cross-examination on an affidavit as to merits in support of an application to set judgment aside is appropriate. There, the cross-examination was simply to identify on the deponent's version what the defendant's case about the conversation in dispute was.
In the present case, cross-examination preceding the exemption application was conducted in much the same way as I would have expected the deponent to be cross-examined at trial. There was no clear point, apparent to me, which would have enabled me, on the limited materials available at this stage, to conclude with confidence that the facts put forward in support of the proposed defence could be conclusively rejected as false. Generally, unless the court has proper grounds for supposing that facts necessary in support of a foreshadowed defence can be conclusively disproved, permitting cross-examination on an affidavit of merits in the face of an application for exemption would be inappropriate. To permit such cross-examination would simply be to condone the unnecessary use of court time and increase the cost of the litigation to no end other than to provide the plaintiff with a forum for a preliminary skirmish.
In cases involving the final determination of issues where a witness or a deponent of an affidavit is not cross-examined despite the desire of the opposing party to do so, the weight to be attached to the evidence is reduced. Re O'Neil [1972] VR 327; Shaw & Anor v Harris & Ors(No 2) (1993) 3 Tas R 167. However, in the case of an interlocutory application where an affidavit is read to establish that there is an arguable defence for the purpose of securing a trial, the fact that no cross-examination is permitted cannot affect the weight of the evidence. The evidence is there to show that there is an argument. There either is, or is not, an arguable defence. Weight is irrelevant. The situation in the present case is unusual because cross-examination had proceeded for some time prior to the exemption application being made. If the deponent under cross-examination had given evidence that improved the position for the defendants, I would not have granted the exemption. If the deponent thereafter declined to submit to further cross-examination, the affidavit could not have been used as evidence and I would have entirely disregarded any viva voce evidence which favoured the defendants because, but for the purported submission to cross-examination, it would not have been received in the first place. None of the evidence of the deponent given under cross-examination favoured the defendants and so the issue does not arise in this case. As I have already said, the evidence of Mr Adams in cross-examination was confusing and often contradictory and did not assist the defendants at all.
Order
There will be an order that the judgment be set aside. I will hear counsel as to whether the order should be unconditional or on terms.
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