FEDERAL COURT OF AUSTRALIA Scott v Bagshaw [2001] FCA 1564 JOHN JOSEPH SCOTT v LEITH GORDON BAGSHAW, JUDITH HAMPTON BAGSHAW, PHILLIP GREGORY JEFFERSON & JAY ARSCOTT STEVENSON AS TRUSTEES OF THE BANKRUPT ESTATE OF LEITH GORDON BAGSHAW NG 684 of 1994 WHITLAM J 7 NOVEMBER 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 684 of 1994 BETWEEN: JOHN JOSEPH SCOTT First applicant AND: LEITH GORDON BAGSHAW First respondent JUDITH HAMPTON BAGSHAW Second respondent PHILLIP GREGORY JEFFERSON & JAY ARSCOTT STEVENSON AS TRUSTEES OF THE BANKRUPT ESTATE OF LEITH GORDON BAGSHAW Third respondents JUDGE: WHITLAM J DATE OF ORDER: 7 NOVEMBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first respondent's motion, notice of which was filed on the 16 August 2001, is refused. 2. The first respondent pay the applicant's costs of the motion. 3. The third respondents' costs of the motion be their costs in the cause. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 684 of 1994 BETWEEN: JOHN JOSEPH SCOTT First applicant AND: LEITH GORDON BAGSHAW First respondent JUDITH HAMPTON BAGSHAW Second respondent PHILLIP GREGORY JEFFERSON AND JAY ARSCOTT STEVENSON AS TRUSTEES OF THE BANKRUPT ESTATE OF LEITH GORDON BAGSHAW Third respondents JUDGE: WHITLAM J DATE: 7 NOVEMBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application by the first respondent, Leith Bagshaw, to re-open his case and to strike out parts of the statement of claim. The background to this proceeding is set out in the judgment of the Full Court remitting the application for determination: [1999] FCA 674. It is not necessary to restate that factual matrix. 2 Mr Bagshaw now wishes to re-open his case so as to tender the reasons for judgment in an action in the Supreme Court of New South Wales and to have John Scott and Kenneth Livingstone recalled for cross-examination. The judgment in question was given by Windeyer J on 16 February 2001, and in his reasons for judgment his Honour refers to evidence of (a) an oral agreement that Mr Livingstone allegedly made in 1994 with John Slattery relating to the ledger account maintained in his name by Ophix and (b) a deed signed by Mr Livingstone in 1999 relating to the same account. Counsel for Mr Bagshaw submits that this evidence touches on Mr Livingstone's entitlement to conduct the instant suit. 3 The findings in the Supreme Court action would not, of course, be admissible in the present suit to prove the existence of a fact that was in issue in that action: Evidence Act 1995, s 91. Mr Bagshaw does not propose to call any witnesses in respect of the matters referred to in Windeyer J's reasons, but merely further to cross-examine Mr Scott and Mr Livingstone on that topic. In my opinion, the interests of justice do not require that he be given that opportunity. First, as the Full Court explained, when correcting my initial error, it is Mr Scott, not Mr Livingstone, who asserts the legal title to the relevant chose in action in this proceeding. Secondly, as counsel for Mr Scott correctly submits, Windeyer J's description of the evidence touching the operation of Mr Livingstone's ledger account roughly accords with the evidence given before me. It may well be, and I am prepared to assume, that Mr Bagshaw did not know of the 1994 and 1999 agreements, but they are irrelevant to the issues presently before me for determination. If Mr Scott succeeds in his claim and securities are in due course realized, there may be other proceedings involving persons who assert equitable rights to funds of which Mr Scott may be the bare legal owner. But that remains for the future. 4 That brings me to the other topic on which Mr Bagshaw wants to cross-examine Mr Scott and Mr Livingstone, that is, the question whether any advances made to him in Mr Scott's name remain unpaid. Mr Bagshaw submits that the statement of affairs that accompanied Mr Livingstone's bankruptcy petition and a portion of the notes subsequently taken at Mr Livingstone's examination under s 81 of the Bankruptcy Act 1966 suggest that no such moneys are owing. Again, in my opinion, the interests of justice do not require that Mr Bagshaw be given leave to re-open in order to take up this question. A future taking of accounts may well, of course, be concerned with such an issue. 5 The final aspect of this present application is entirely misconceived. Counsel for Mr Bagshaw submits that parts of the statement of claim should be struck out because Mr Scott presses his case without relying on a pleaded document where I had found that no weight should be attached to a copy of the document in evidence. My conclusion was not challenged on appeal and remains undisturbed. However that may be, the case having concluded and the unresolved issues remaining for my determination, there is nothing embarrassing about the pleadings continuing to allege facts which may not be sustained on the evidence in the suit. 6 The motion will be refused. Mr Bagshaw must pay Mr Scott's costs of the motion. The costs of Mr Bagshaw's trustees (who neither supported nor opposed the motion) should be their costs in the cause. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam. Associate: Dated: 7 November 2001 Counsel for the applicant: C J Birch SC Solicitors for the applicant: Church & Grace Counsel for the first respondent: G A Stevens Counsel for the third respondents: J Oakley Solicitors for the third respondents: Camatta Lempens Date of hearing: 25 October 2001 Date of judgment: 7 November 2001