HOLMARK CONSTRUCTION COMPANY PTY LTD and OLIVIERI v TOTAL CONCEPT PRODUCTIONS PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS JA, MAHONEY JA, MEAGHER JA 2 September 1991, 2 September 1991 [1991] NSWCA 148 APPEAL from District Court — Contract for supply and installation of goods — Judge held contract to be made with both supplier company and managing director of the company Judgment against both — Held: No evidence to support finding that Mr Olivieri was party to contract — Judgment against Mr Olivieri set aside and judgment entered for defendant. REOPENING of case against company — At trial, judge refused leave to reopen company's case to call important witness Held: No basis on which discretion to refuse reopening could have been exercised — Judgment against company set aside — New trial ordered. Mahoney JA These appeals concern two proceedings which were brought in the District Court and which have been dealt with together. In view of the issues on which, finally, the appeals turn it is not necessary for me to refer in detail to the facts. Counsel approached the matter, in my opinion, quite correctly in much the same way. It is sufficient to say the basic facts appear from the judgment given by Pain DCJ in the two matters on 18 October 1989. As his Honour said, the plaintiff, Total Concept Productions Pty Ltd, was a construction company: I use that term in the sense in which it is used in the proceedings. It was engaged to supply and install lighting and audio equipment and special effects equipment, as it was described, at a nightclub known as Ollie's Plaza Inn in Fairfield. The amount in question in the two proceedings is the outstanding balance of the payment to be made in respect of that work, namely $15,000 together with interest from 15 December 1986. Total Concept Productions Pty Ltd (to which I shall refer as "Total") brought a proceeding first against Holmark Construction Company Pty Ltd ("Holmark") and subsequently it sued Mr Italiano Olivieri, the managing director of Holmark. The learned judge, having heard evidence about the detail of the work in question, came to the conclusion that a contract had been made by Total both with Holmark and with Mr Olivieri and he gave judgment against each of them. Mr Olivieri has appealed against the judgment which has been given against him. Evidence before the learned judge established clearly that although Mr Olivieri had been the person conducting the negotiations with Total and the person acting for it, he had made the stipulation before the contract was made that the contract to be made was to be made with Holmark. This is a matter which appeared in the evidence of Mr Borysiewicz, the main witness for Total, even in his evidence in-chief. It is not necessary for me to cite the passages and the evidence to that effect. In my opinion, the sum total of the evidence is clear that the stipulation was that the contract was to be with Holmark Construction Company Pty Ltd. Mr Carney, who argued the matter for the respondents, confesses to having difficulty 2 UNREPORTED JUDGMENTS in arguing to the contrary. I can see no basis on which it could be held that there was a contract either alone or jointly or severally also with Mr Olivieri. I cannot, for myself, find in what his Honour held any basis for the conclusion that Mr Olivieri was himself to be bound by the contract. I am conscious that for the purposes of this argument it is to be assumed that his Honour rejected the credit of Mr Olivieri and I deal with the matter upon that basis. But even if that be so, I can find nothing in the evidence which would warrant the conclusion to which his Honour came in this regard. His Honour referred to the case which had been made out (as I understand Mr Carney's argument, the principal case made out in this regard) that under s535 and s536 of the Companies Code a case was to be made for the personal liability of Mr Olivieri. But his Honour found against that case and it is not necessary to refer further to it. I think that the conclusion, therefore, is inevitable that the appeal by Mr Olivieri must be upheld with costs. It follows that Mr Olivieri is entitled to have his proper costs in relation to the proceedings at the trial. It follows that there must be a judgment for Mr Olivieri in the proceedings brought against him with costs. And the costs which flow from the order which I propose may require some consideration by the parties or if the matter reaches that stage by the taxing officer. It may well be that the actual costs to be recovered in money by Mr Olivieri in this regard will be comparatively small as, on the evidence as it is before this Court, it would appear that the costs of the proceedings at the trial would have been little increased by the proceedings against Mr Olivieri personally. However, that is not a matter upon which it would be possible for this Court to rule conclusively without a detailed examination of the facts. I come then to the appeal which has been brought by Holmark. The only ground argued on that appeal relates to his Honour's refusal to allow a reopening of the evidence in the proceedings to enable Holmark to call an additional witness, a Mr Pietro. The circumstances in which this occurred are set forth in the transcript and have been referred to in detail in argument. It appears that the proceedings had originally been stood over part heard until 11 September 1989 but (I am referring to what his Honour said in the transcript of the proceedings on 16 October 1989) during August unforeseen circumstances caused a change in judicial arrangements which resulted in his Honour not being available to resume the hearing of the proceedings on 11 September 1989. As his Honour said, at some time prior to that date it was arranged between his associate and counsel and/or solicitors for the parties that the hearing of the matter would be resumed on 16 October 1989. When the proceedings were resumed on that day difficulties arose. Mr Olivieri himself did not attend the Court. Mr Stroheim who had previously given evidence did not attend for cross-examination and ultimately it appeared that he did not attend at all on that day. There was also difficulty in relation to Mr Pietro's attendance. It was said by Mr Keller, counsel then appearing for Holmark, that Mr Pietro was to be available on that day to give evidence. An adjournment was sought but it was refused. On that basis the matter proceeded and Mr Keller called a Mr Gordon Alexander to give evidence in the defence case. When that witness had completed his evidence Mr Keller indicated that Mr Stroheim was not present and nor were Mr Olivieri or Mr Pietro. He asked for an adjournment of the matter and his Honour said (at 118): "Mr Carney, I am WRALMARK CONSTRUCTION COMPANY PTY LTD and OLIVIERI v TOTAL CONCEPS PRODUCTIONS PTY LTD (Mahoney JA) minded to grant the application that it stand down and if your witnesses are not here at 2 pm we will deal with the matter on the evidence as it now stands." That last remark, as I infer, was addressed essentially to Mr Keller. Subsequently, after the luncheon adjournment, Mr Keller indicated that Mr Olivieri was, as he said, at another project site and was not present. Mr Keller then said that Mr Pietro had been instructed to appear at the Court. He said at that point that he had been asked to leave Fairfield and come to the Court and "that was approximately 25 minutes to 10". He was not then present. Reference was made also to Mr Stroheim but it is not necessary to proceed further to him. His Honour then granted a further 20 minutes adjournment. His Honour said, "If he has not arrived by that time I am afraid what I said at 12.20 pm, that we will have to deal with the matter on the basis of the evidence as it now stands will stand". His Honour then adjourned the matter until 2.30 pm. At 2.35 pm his Honour commented that Mr Stroheim was not present and that Mr Pietro had not arrived. His Honour said: "The time being 2.35 pm and there being no appearance of Mr Olivieri, the defendant in the second matter before me and the managing director and a substantial shareholder in the defendant company in the first matter, there being no appearance of the witness Hans Stroheim who had been examined but not cross-examined when this matter was adjourned on 20 June last and there being no appearance of a witness Mr Pietro who, I am informed by Mr Keller on behalf of the defendants that it was his intention to call and that he understood arrangements had been made for his attendance and indeed he having been contacted about 12.40 pm today and being requested to attend as a matter of urgency, in the light of the history of this matter I decline to grant the application made for an adjournment to enable the defendants to adduce further evidence and the matter will proceed." Mr Keller then was, as he said, forced to close his case and addresses commenced. Some discussion is recorded in the transcript as having taken place between his Honour and counsel. Then subsequently the following appears from the transcript: "KELLER: Your Honour I am instructed Mr Pietro is now here. I am cognizant of your Honour's ruling but I am instructed to seek to have the defendant's case reopened for the purpose of calling Mr Pietro. I do not know that there is anything additional I can put to that application. HIS HONOUR: No, Mr Keller, I am not minded to grant the application. A great deal of leniency has already been afforded to the defendant today and I am not minded in the absence of any further material to alter the position as it now obtains. KELLER: If it pleases the Court." The result of this was that his Honour, having been informed that Mr Pietro was then present, refused to allow the case to be reopened for Mr Pietro's evidence to be given and to be taken into consideration by his Honour. It was submitted that, although the grant of a reopening as requested is a discretionary matter, in the present case the discretion miscarried and that his Honour fell into error in what he said. Mr Pietro's evidence may well have been of significance in the case. This has been asserted by the appellant and it has not been contested. Reference was made in evidence to Mr Pietro having been present at certain conversations and, as the assumption appears to have been, he may well have given evidence which might have affected, apart from any other matter, the extent to which Mr Olivieri's 4 UNREPORTED JUDGMENTS evidence would have been accepted or rejected by the learned judge in the proceedings. The argument proceeded on that basis and it is proper that I deal with it accordingly. It is, as I have said, a matter of discretion whether a reopening should be granted in circumstances of this kind. The learned judge's reason for refusing a reopening may be inferred (I put the matter shortly) from what he said in the passage to which I have referred earlier, namely, that "In the light of the history of this matter I decline to grant the application for reopening". It may be that his Honour, in referring to the previous history, had in mind what he said earlier at the commencement of the hearing on 16 October 1989. That matter is recorded at p 108 of the appeal papers. His Honour there referred to what had happened at an earlier stage in the proceedings including the interlocutory order which had been made for striking out grounds of defence and the like. He may have been referring also to what had happened earlier in relation to adjournments. But that appears to be the only reason given, in terms, for the refusal to allow the case to be reopened. I am conscious that, in a discretionary matter of this kind, the atmosphere of the proceeding is a matter to which regard may properly be had, not exclusively but as a factor to be taken into account. But taking all of these matters into account, in my opinion it is difficult to see how in the proper exercise of the discretion the case should not have been reopened to allow Mr Pietro's evidence to be taken. It was not suggested that unnecessary time would have been taken and no reason was given, by reference for example to the state of the Court's business or the like. There was nothing to suggest that the prejudice to the plaintiff company could not have been repaired by an appropriate order for costs. In the circumstances, I am forced to the conclusion that in relation to this matter the discretion did miscarry. I come to that conclusion, as I have indicated, with some hesitation because I am conscious that I do not know of all the matters that happened during the course of the proceedings. But this Court must determine the matter upon the evidence as it is before this Court. The conclusion to which I have come is, in my opinion, the correct one and that being so it follows that the appeal must be upheld and the judgment in favour of Total set aside. It follows that there must be a retrial of the proceedings between Total and Holmark. The order which I propose, therefore, is in that the appeal be upheld with costs, that the judgment in favour of Total against Holmark be set aside and that the matter be returned to the District Court for a retrial. The costs of the retrial will, of course, lie at the discretion of the judge in that trial. Reference was made in argument to costs of the original trial. So far as the evidence before this Court extends it appears that the order made in respect of costs was merely (I refer to 0.4 of the order of 18 October 1989) that liberty to apply be given in relation to costs. It does not appear whether any particular order was made in that regard. If no order has been made then the costs of the original trial would have to be dealt with on an appropriate application to the judge as there contemplated. It is, I think, not necessary for this Court to make any formal order in relation to the matter. Before leaving the matter I shall add an extraneous comment. This is a dispute between the parties involving, basically, the sum of $15,000 with interest. It now would amount to perhaps $20,000 or $25,000 or thereabouts. It would be unfortunate if, in order to determine a dispute of that kind, the matter should have to go back unnecessarily for a complete retrial, with the costs involved. It is WRALMARK CONSTRUCTION COMPANY PTY LTD and OLIVIERI v TOTAL CONCEP PRODUCTIONS PTY LTD (Meagher JA) hoped that the parties will come to an amicable agreement in relation to the matter. But that is not something that can be imposed upon them. Therefore the orders of the Court should be as I have indicated. Samuels JA I agree. I add only this. I acknowledge, of course, as Mahoney JA did, that an appellate court will be slow to interfere with the orders of a primary judge made in the exercise of discretion in a matter of practice or procedure. However, in the present case there being, it seems, no evidence of prejudice to the adversary if the case were reopened, and no suggestion of any other compelling reason why the application that was made should not have been granted, I can see no reasonable ground, with all respect, upon which the application could have been refused. Accordingly, I agree in the orders that Mahoney JA has proposed. Meagher JA I agree with Mahoney JA with regret in the case of the appeal by MrOlivieri and with reluctance in the case of the appeal by Holmark. 1. Proceeding Holmark Construction Company Pty Limited v Italiano Olivieri: Appeal allowed with costs. Judgment for plaintiff set aside. Judgment for defendant with costs. 2. Proceeding Holmark Construction Company Pty Ltd v Total Concept Productions Pty Ltd: Appeal allowed with costs. Retrial of proceedings in District Court. Any remaining costs of the first trial to abide the discretion of the judge hearing the further trial. 3. If qualified, the respondent to have a certificate under the Suitors' Fund Act. Counsel for the Appellant: DB McGOVERN/P SUTHERLAND Counsel for the Respondent: NU CARNEY Solicitors for the Appellant: GALLUZZO and GOLOTTA Solicitors for the Respondent: DAVID J H HOOPER