Walsh v KC & WL Brain Pty Ltd (No. 2) [2023] NSWDC 623

District Court New South Wales

Medium Neutral Citation: Walsh v KC & WL Brain Pty Ltd (No. 2) [2023] NSWDC 623 Hearing dates: 14 June 2023 Date of orders: 14 June 2023 Decision date: 14 June 2023 Jurisdiction: Civil Before: Neilson DCJ Decision: See par [9] and [11]. Catchwords: Leave sought to withdraw ADMISSIONS made by defendant's Counsel in Court without any explanation as to why the admissions were erroneous – Leave refused – Defendant sought to adduce further affidavit evidence in chief relating to quantum – Leave granted. Legislation Cited: Conveyancing Act 1919 Personal Properties Security Act 2009 (Cth) Cases Cited: Candy v GIO General Limited [2013] NSWSC 810 The Owners – Strata Plan 72739 v Allianz Australia Insurance Limited [2017] NSWSC 1118 Texts Cited: Nil. Category: Procedural rulings Parties: Plaintiff – Alan David Walsh Defendant – KC & WL Brain Pty Ltd Representation: Counsel: Plaintiff – Mr Gunning, M. Defendant – Mr O'Connor, J.

Solicitors: Plaintiff – Rural Law. Defendant – Walsh & Blair Solicitors. File Number(s): 2020/00107856 Publication restriction: Nil.

Judgment 1. HIS HONOUR: Currently before me are two applications made by the Defendant. The first application is for leave to withdraw certain admissions that were made in evidence given on 4 March 2022. At that time, the Plaintiff, Mr Alan David Walsh, was being cross-examined by Mr O'Connor for the Defendant. He was being cross-examined about a number of items in a Scott Schedule that relates to various quantum meruit claims. 2. The relevant admissions concern items 6, 8, 9, and 10, in the Scott Schedule. Item 6 is a claim for two passes of Roundup/Weedmaster and Agritone per hectare, a total of $3,540. Item 8 is an application of another chemical, Majister, at the rate of 500 mls per hectare at a total cost of $5,520. Item 9 is the application of another chemical, Gramoxone, at 2 litres per hectare, being a total cost of $1,420.50. The final item is item 10, again, the application of a chemical known as Stopm/Rifle at 3.5 litres per hectare at a total cost of $5,190.50. 3. Concerning item 6, at page 53 line 11, the learned Counsel for the Defendant is recorded as saying this: "O'CONNOR: Just in relation to the first item, your Honour, that is agreed. That's the two passes of Roundup/Weedmaster and Agritone? WITNESS: Yes. O'CONNOR: Q. I'm just informing his Honour that my clients agree with that claim." 1. As to item 8, Mr O'Connor stated that that was agreed at T53.48. As to item 9, Mr O'Connor said that item was agreed at T51.01. As to Item 10, Mr O'Connor advised me that item was also agreed at T54.06. It is clear from the actual words that he initially used that he was making those admissions on instructions from his clients. When he referred to his clients in the plural, he was referring to the principals of the Defendant, Mr Ken Brain and his wife, Mrs Wendy Brain. 2. The principles relating to the withdrawal of admissions can be conveniently found in the judgment of Campbell J in Candy v GIO General Limited [2013] NSWSC 810. Commencing at [53] his Honour said this: "53 In Drabsch Santow J said (pp. 7 - 8): I set these principles out as follows: 1. Where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the court, an application to withdraw the admission, especially at appeal, should not be freely granted; Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ Comm D, followed in IOL Petroleum Ltd v O'Neill per Young J (Young J, 17 November 1995, unreported) and Apex Pallett Hire Pty Ltd v Brambles Holdings Ltd (full Supreme Court of Victoria, 8 April 1988, unreported), and in that respect not following H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 at 703. 2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guideline being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded; IOL Petroleum Ltd v O'Neill (supra), in the context of withdrawing a concession made before the Registrar. 3. Where a court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after a full opportunity to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn; Coopers Brewery Ltd v Panfida Foods Ltd (supra) at 745 and 748. Thus a court will not lend its approval to the withdrawal of admissions where, by analogy with the making of amendments, this is actuated by purely tactical reasons; compare Devae Prufcoat Pty Ltd v Altex Industrial Paints Ltd (Cole J, 15 March 1989, unreported). 4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission; H Clark (Doncaster) Ltd v Wilkinson (supra), in that respect not doubted. 5. Following Cohen v Mc William and Anor (1995) 38 NSWLR 476, a court is not obliged to give decisive weight to court efficiency, such that a party who wishes to defend its claim is entitled to a hearing on the merits, with cost orders being available as a means of compensating the other party for any costs thereby unnecessarily incurred or not fairly visited on the other party. 54 In Deangrove at [35] Sackville J said: Consistent with what was said by Santow J in Drabsch v Switzerland Insurance, a party who makes a clear and distinct admission on a factual question, which is accepted and acted upon by the opponent, should not be permitted freely to withdraw that admission. Whether or not it is appropriate to grant leave will depend upon the particular circumstances of the case and an assessment of the interests of justice. The relevant circumstances include the nature of the admission, how it came to be made (for example, whether it was made deliberately or inadvertently), when and why the party seeks to withdraw the admission and the impact of any withdrawal on the other parties to the litigation. 55 In Clark v. Wilkinson at 703 Lord Denning MR said: An admission made by counsel in the course of proceedings can be withdrawn, unless the circumstances are such as to give rise to an estoppel. If the other party has acted to his prejudice on the faith of it, it may not be allowed to be withdrawn (citations omitted). 56 And at 704 Salmon LJ said: No doubt a statement made by counsel, just like a statement made by the client, if acted on by the other side to their prejudice, cannot be withdrawn. This is because an estoppel would then arise. 57 As Santow J pointed out in Drabsch, other statements of their Lordships in Clark v. Wilkinson have been perceived to be too lenient in more modern Australian cases: eg. Coopers Brewery Limited v. Panfida Foods Limited (1992) 26 NSWLR 738; Rigato Farms Pty Ltd v Ridolfi [2001] 2 Qd R 455; Deangrove at [29] - [30]. However, it cannot be doubted that where the circumstances of the case engage the legal principles of estoppel by representation (for example) the party will be precluded from withdrawing the admission. 58 Albeit in dissent, in Cropper v. Smith at 710 Bowen LJ said: Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. 59 All of these statements of principle, of course, precede the enactment and commencement of the Civil Procedure Act and the discussion of the legal effect of similar efficiency provisions of the Court Procedure Rules 2006 (ACT) in Aon Risk Services Australia Limited v. Australian National University [2009] HCA 27; 239 CLR 175. The principle enunciated by Bowen LJ in the passage I have quoted has survived the realignment of relevant considerations effected by ss.56 - 58 Civil Procedure Act. Later comments by his Lordship about the curative effect of costs orders have not (AON at 189[25] per French CJ; at 211[93] and 213[99] - 214[101]). 60 The statutory imperative, and the High Court's explanation of it in AON, may require an approach somewhat different from that explained by Santow J. In particular, his reference to case management considerations not being decisive obviously needs to be reviewed; clearly in some, perhaps many, cases such considerations will be decisive. AON provides a clear example. However, only the plaintiff, of all the parties opposing Zurich's application, argued case management considerations were of other than some, not decisive, relevance. GIO, the party entitled to the benefit of the admission, as it were, did not argue that such considerations were decisive in the present case. 61 Too much should not be read into Santow J's observations about admissions "contrary to the actual facts". An application for leave to withdraw will most often be made before the facts have actually been determined following a trial. Sometimes at an interlocutory stage, the true facts will appear with certainty. But usually, the best that can be said is that they are contestable. Consistently with the approach taken to other instances of interlocutory relief, it may be sufficient if it appears from the material presented in support of the application that there is a reasonable prospect that evidence will be lead at the trial which, if accepted, will support a finding which contradicts the admitted fact: Yu v Speirs [2001] NSWCA 373. Naturally, a consideration expressed this way could rarely be decisive." 1. I have also been referred by counsel to the decision of McDougall J in The Owners – Strata Plan 72739 v Allianz Australia Insurance Limited [2017] NSWSC 1118. That was another application to withdraw admissions in "pleadings", being a List Statement, and a List Response, in the Technology and Construction List. After quoting much of what Santow J said in Drabsch v Switzerland General Insurance Co. Limited, which was cited in Candy v GIO General Limited by Campbell J, his Honour continued with this: "27 White J considered the position in SLE Worldwide v WGB & Others. After referring to what Santow J had said in Drabsch, White J said that the discretion to grant leave to amend was to be exercised for the purpose of ensuring that there would be a fair trial. His Honour continued: 56 This remains a correct statement of the relevant principles after Queensland v JL Holdings Pty Ltd. (Jeans v Commonwealth Bank of Australia (2003) 204 ALR 327 at 330-331; Silver v Dome Resources NL [2005] NSWSC 265 at [8]-[9]). In Jeans v Commonwealth Bank of Australia, the Full Court of the Federal Court said that there was no principle that admissions might or might not be withdrawn, but that the court had a broad discretion to weigh up all matters, with the overall question being to ensure there was a fair trial. (At 330 [18]). Nonetheless, I approach the task of assessing what fairness to the parties requires, guided by the principles expounded by Santow J in Drabsch. It is legitimate and it may be necessary to consider whether the party making the admission did so deliberately, or whether he did so in error, whether the significance of the admission has changed since it was made, for example by reason of other amendments, (Silver v Dome Resources NL at [12]), or whether new evidence has come to light. In this case there is no suggestion that the admission was made in error. There has been no change to the pleadings which has altered the significance of the admissions. It is not suggested that new evidence has come to light which justifies their withdrawal. Where a party, who is legally advised and does not suffer any disability, deliberately and without mistake, admits liability in whole or in part, and there are no relevant changes of circumstance, prima facie, justice or fairness to both parties does not require that it be allowed to change its mind. That is why admissions made with deliberateness and formality are not ordinarily permitted to be withdrawn. 28 Having said that, his Honour said, the starting position was "that the admissions deliberately and formally made should not be permitted to be withdrawn, unless sufficient cause is shown why they should be. 29 There are many judicial statements to the effect that a party seeking leave to amend so as to withdraw an admission should explain why the admission was made and why it is now sought to be withdrawn. Tobias JA said as much in Maile v Rafiq. The same position emerges from decisions of other intermediate appellate courts: see for example Sangora Holdings Pty Ltd v Dunstan and Rigato Farms Pty Ltd v Ridolfi. It may be said that s 56 of the CP Act now provides the primary guide to the exercise of the discretion. That is correct. Nonetheless, as Harrison J recognised in NM Rural Enerprises Pty Ltd v Rimanui Farms Ltd (a very different case on its facts), the statements remains relevant. Decision 30 I accept that the decisions to which I have referred, and many others, establish the importance, in a general sense, of an explanation by the party seeking leave to withdraw an admission. Nonetheless, as s 64 of the CP Act makes clear, as long as the overriding purpose is observed, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings." 1. Here, it is clear the admissions were made by learned Counsel for the Defendant on instructions from the Defendant itself, via the Defendant's directors. No evidence has been adduced from either Mr Brain or Mrs Brain as to why they gave those instructions or how those instructions were erroneous or ill-informed or ill-advised or the like. There is nothing at all from Mr and Mrs Brain. The admissions were made by learned Counsel for the Defendant during his cross-examination to tell the Court what was in issue and what was not in issue. 2. The case has had a protracted history for a number of reasons. I have earlier delivered a lengthy judgment in which I was asked to make a determination on what was the primary issue between the parties, in the pious expectation that that would bring the matter to a satisfactory conclusion. Unfortunately, that pious expectation has been blasted and the matter is now set down for a week commencing on 30 October 2023. 3. However, there must be an end to litigation. Most of the evidence in this case has already been given. It is voluminous, and where the Defendant now seeks to withdraw admissions formally made by counsel and during the course of evidence, without any explanation of why the instructions which he received were erroneous or ill-advised or the like, I can only reach the conclusion that it is not in the interest of justice to allow the admissions to be withdrawn. For that reason, the first application made by the Defendant is refused. 4. The second application by the Defendant is for leave to rely on a further affidavit of Mr Kenneth Brain. That affidavit was sworn on 6 June 2023 and is Exhibit VD-1. It explains an erroneous entry in a logbook relating to a harvesting machine and it also admits, essentially, what was alleged by the Plaintiff that the harvesting of what is known as the Hawker's wheat crop was completed on 29 December 2016, but then explains why the harvesting machine's logbook has a "stop date" of 6 January 2017, when the last harvesting was in fact on 29 December 2016. The affidavit explains what happened to the machinery in question between 29 December 2016 and 6 January 2017, and explains why the harvesting machinery was not used between those two dates. Of course, that is subject to contest. 5. However, I believe in the circumstances of this case, and bearing in mind that essentially Mr Ken Brain, because of being dyslexic, relies on his memory for many things, that he may have not turned his attention to the items which are now the subject of his affidavit. For those reasons, I grant leave to the Defendant to rely upon a further affidavit of Kenneth Charles Brain, sworn on 6 June 2023, which I will give a further Exhibit number when matter comes on for further hearing before me on 30 October 2023. I note that the Plaintiff, through his learned counsel, wishes to further cross-examine Mr Brain and Mr Brain will make himself available for that purpose on 30 October 2023. 6. The major contest between the parties has been about the first issue with which I dealt today and, therefore, it appears to me that the costs of today should be the Plaintiff's costs in the cause.