ae JUDGMENT No. 2'27 23— oo . NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NSW G.211 of 1985 eee ew GENERAL DIVISION BETWEEN: COLLINS MARRICKVILLE PTY LIMITED Applicant AND: HENJO INVESTMENTS PTY LIMITED First Respondent HENRY SAADE Second Respondent NORMAN PETER GEORGE Third Respondent SAADE DEVELOPMENTS PTY LIMIT Fourth Respondent CORAM: WILCOX J PLACE: SYDNEY DATE: 1 JUNE 1988 MINUTES OF ORDER THE COURT ORDERS THAT: 1. Costs in the Notice of Motion filed 26 May 1988 be costs in the further hearing of the principal proceeding. 2. Liberty be granted to any party to apply on 24 hours' notice. AND THE COURT DIRECTS THAT: A. The respondents' affidavits be filed and served not later than Friday 15 July 1988. B. Any affidavits in reply be filed and served not later than Priday 5 August 1988. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.211 of 1985 ) GENERAL DIVISION ) BETWEEN: COLLINS MARRICKVILLE PTY LIMITED Applicant AND: KENJO INVESTMENTS PTY LIMITED - First Respondent HENRY SAADE Second Respondent NORMAN PETER GEORGE Third Respondent SAADE DEVELOPMENTS PTY LIMITED Fourth Respondent CORAM: WILCOX J PLACE: SYDNEY DATE: 1 JUNE 1988 EXTEMPORE REASONS FOR JUDGMENT A Notice of Motion has been filed in this matter in order to clarify, in advance of the further hearing on damages, the nature of the evidence which may be adduced on behalf of the parties. The matter comes back to the Court pursuant to an order made by a Full Court on 26 February 1988 whereby certain orders made by me were set aside, those orders being intended to effect a reversion of the title of the business from the applicant to the first respondent. The Full Court took the view that, in consequence of its order, there ought to be further consideration by me as to the amount of damages. Lockhart J, at p.41, of his judgment said this in relation to the further hearing: "It is a matter for the trial judge as to how the further hearing will be conducted though, no doubt, he will adopt as his starting point the present evidence supplemented by such fresh evidence as he sees fit to allow." The applicant has put the view that, at the further hearing, it should be free to adduce any evidence it wishes which is relevant to damages. In particular, it seeks to adduce evidence as to the significance of the bar stools and the manner of operating the restaurant at various times. The purpose of doing this is to attempt to persuade me to reconsider the view which I previously reached that, of the total operating losses of the restaurant, no more than 10 per cent should be ascribed to the removal of the bar stools. I do not think that it is appropriate for that question to be relitigated. This was a subject which was litigated at considerable length, through the evidence of numerous witnesses, at the trial. I made a finding on the matter. Each party is dissatisfied with the finding, in the sense that the applicant says that the appropriate proportion should have been greater and the respondent that this assessment was too great. This dissatisfaction is an unhappy fate for a judge, but not unusual. I considered the matter of the bar stools at the earlier hearing upon the basis of the evidence which the parties elected then to put before the Court. It seems to me that to allow that matter to be reopened would be to allow the applicant to relitigate something which was fully investigated on such evidence as it chose to adduce at that time. I do not think it is any answer to this proposition to say that additional witnesses have now appeared who can assist on the matter. The applicant had the opportunity of calling these witnesses at the trial. It did not do so. It made no application for any adjournment to allow any particular witness to be available and I see no reason to depart from the usual rules that a party is expected to put his case at the trial and that he is bound by the conduct of the trial. I add that to relitigate this matter would almost inevitably mean the recalling of other witnesses. It would certainly mean a reconsideration of the whole of their evidence and it would turn the further hearing into a very lengthy exercise. It is plain: that the Pull Court intended that I have some discretion in the matter and I exercise that discretion so as to exclude that type of evidence. The parties have crystallized the dispute between them as to evidence in a convenient way. The solicitors for the respondents, Messrs Swaab & Associates, wrote to the solicitors for the applicant, Messrs Sly & Russell, on 24 May 1988. They there itemized the various affidavits filed by the applicant in relation to which they objected to the evidence being adduced. The affidavits which fall within the category I have mentioned are the affidavits of Anthony John Reynolds sworn 22 April 1988, Joel Pierre Russell sworn 22 April 1988, Grant Damion Andronicus sworn 22 April 1988, Jonathan Francis Brown sworn 22 April 1988, Michael John Matthews sworn 22 April 1988 and Katrina Medina sworn 22 April 1988. I indicate now that I do not propose to allow any of those affidavits to be read at the trial. Consequently the respondents need not concern themselves with answering matters in those affidavits. It is common ground between the parties that, consistently with the intention of the Full Court, evidence should be permitted as to the value of the business at the time of its acquisition by the applicant. The affidavits which fall within that category are not objected to in principle, although objection is taken to certain passages in the affidavits on the basis, I gather, that they involve certain assumptions which do not conform with the facts. I think it appropriate to defer that type of objection until the trial. The principle is clear and consequently I do not propose to exclude at this stage any part of the affidavits of John Robertson or Michael Miltiades which are referred to in paras.2 and 3 of the letter from Messrs Swaab & Associates. However I reserve the respondents' rights to object to any particular passage in those affidavits in the usual way at the trial. There is a further category which is contentious. It relates to events which have occurred since the trial. A number of affidavits are proposed to be relied on by the applicant in that respect. They consist of two affidavits of Neil James, dealing respectively with the trading position from 1 July 1987 until 15 April 1988 and the future rental obligations of the applicant as lessee of the premises in which the business is conducted until the date of expiry of the lease in May 1990. They also include the affidavit of Deane Bruce Ward which attaches audited accounts for the year ended 30 June 1968, the affidavit of Pamela Theresa Lumley who annexes a survey of the numbers of patrons and the amount of takings in the period March to April 1988, the evidence of Edward Houghton dealing with certain costs which were not taken into account previously, some of which were partly incurred after the date of the previous trial. Mr Masterman Qc has put to me the submission that I should not receive evidence on any of those matters; that, consistently with the view previously expressed by me, consequential losses should be regarded as limited to the period expiring on 30 June 1986; and that, consequently, all of this material is irrelevant. There is force in those submissions and my present view is that it is unlikely that, in the end, I would award damages for trading losses within the periods the subject of the affidavits in present contention. [I put to one side the rent liability. That may fall into a different category and, at this stage, I have not even a tentative view about that matter.] However, it has been made plain to me on behalf of the applicant that the applicant will put submissions at the rehearing that the ultimate award of damages should reflect the trading position up until the present time. The fact that I think that submission may be difficult to make good is not, in my view, a reason for excluding the evidence. The evidence is mainly of an accounting nature and, although the respondents no doubt will wish to test the evidence to some extent, it does not, I think, open up a major ground of factual contention. It seems to me that, in a case where the ultimate question of principle is not beyond debate, the better course is to receive the evidence so as to allow the submission to be put against the background of factual material. I have to bear in mind that, even if I took the view that these losses were irrelevant to an ultimate conclusion, I cannot be certain that this view would be sustained on any appeal. It would be unfortunate in the extreme if an appeal court had to send the matter back for a still further hearing because of the lack of evidence which was then thought to be material. On balance, therefore, I think that the better course is to permit this evidence to be adduced. The evidence which falls within this last category is contained in the various affidavits to which I have referred. I should add that there is a further affidavit of John Thomas Collins dated 22 April 1988. No objection is taken to the first three paragraphs of that affidavit. Paragraphs 4 and 9 inclusive fall within the category of reagitation of matters previously litigated and I cannot permit those paragraphs to be read at the trial. Consequently the respondents need not concern themselves with answering the matters in those paragraphs. Paragraphs 10 and 11 are ina somewhat different category. I think that they should be treated as being similar to the accounting evidence to which I have referred. They, in effect, bring the matter up to date in certain respects. I will permit paras.10 and 11 to be read; but once again without indicating any view as to whether, in the ultimate, I will regard those paragraphs as being properly taken into account in considering the appropriate consequential damages. I should add that, in expressing the view which I have regarding the binding effect of findings of fact already made, I do not mean to exclude the right of either party to argue what result should flow from the proper application of legal principle to that finding of fact. I regard the findings on matters which have been litigated as continuing to bind the parties but that is quite different from the determination of any point of law resulting from those findings. It will be open to any party, for example, to argue that, as a matter of law, a particular result should flow from the findings as to the bar stools, if that be important, or upon other matters. I see no necessity to make a formal order on the Notice of Motion. What I have said will be transcribed and it will be available to the parties. The only other matter is the costs of this Notice of Motion. (Counsel addressed as to costs). I order that the costs of the Notice of Motion be costs in the the further hearing. I direct that the respondents' affidavits be filed and served not later than Friday 15 July and any affidavits in reply be filed and served not later than Friday 5 August. I grant liberty to any party to apply on 24 hours' notice. I certify this and the seven (7) preceding pages to be a true copy of the Reasons for Judgment of his Honour Justice Hilcox. Nsociate, omy fet Date: 16 e 1988 Counsel for the Applicant: Mr G A Moore Solicitors for the Applicant: Sly & Russell Counsel for the Respondents: Mr G G Masterman QC and Mr F G Lever Solicitors for the Respondents: Swaab & Associates Date(s) of hearing: 1 June 1988