POLLICINO, POLLICINO, VAIELA PTY. LIMITED v POLLICINO SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL MAHONEY ACJ, MEAGHER JA and SIMos AJA 14 August , 14 November 1996 [1996] NSWCA 429 APPEAL — FURTHER EVIDENCE — application to adduce further evidence on hearing of appeal — evidence available but not called at hearing at first instance — special grounds for receiving further evidence not established (section 75A of Supreme Court Act 1990) — application dismissed Nyerlucz v Dei Rocini (Court of Appeal, 8 September 1995, unreported) Mahoney ACJ. I agree with the judgments of Simos AJA and with the orders which he proposes. Meagher JA. I have read both judgments of Simos AJA in draft form and agree with both. Judgment in Respect of Application for Leave to Adduce Fresh Evidence on the Hearing of the Appeal Simos AJA. Prior to the commencement of the hearing of the substantive appeal in this matter, counsel for the appellants made application upon notice for leave to adduce fresh evidence on the hearing of the appeal. The application was made pursuant to the provisions of section 75A of the Supreme Court Act 1990 which, so far as material is in the following terms: 75A (1) Subject to subsections (2) and (3), this section applies to an appeal to the Court and to an appeal in proceedings in the Court ... (7) The Court may receive further evidence. (8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds. (9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing. The fresh evidence sought to be adduced was the evidence of a solicitor, Mr Paul Trisley, who, it was said, acted for all parties in relation to the transactions the subject of the proceedings between the parties, but who declined to give evidence voluntarily upon the basis that to do so would involve him in a breach of confidence said to be owed by him to the appellants. His evidence was said to be relevant to the following finding of the learned trial judge: I accept the Plaintiff's (Sam's) evidence that he consented to the transfer to the company on the basis that he was to have a one third beneficial interest in it. The transaction had this outward appearance as he was one of three directors and one of three equal shareholders. I accept that the trust arrangements were not explained to him by Frank or by Mr Trisley. The latter could have been called by the defendants to confirm that the advice was given if it was. Mr Trisley was called to give oral evidence in the course of the application and was cross-examined by counsel for the respondent. 2 UNREPORTED JUDGMENTS It was submitted on behalf of the appellants that Mr Trisley's evidence as to what he said to the respondent relating to the relevant transactions between the parties was in such conflict with the evidence of the respondent as to what Mr Trisley said to him that, if Mr Trisley's evidence had been given at the trial, the learned trial judge might well have disbelieved the respondent's evidence and come to a different conclusion. It was also submitted that, in this connection, the learned trial judge could and would have taken into account an alleged threat referred to in the evidence of Mr Trisley, made by the respondent to Mr Trisley. I note in this connection that Mr Trisley stated that this alleged threat played no part in his decision to decline to give evidence at the trial, and that, some time later, he had a conversation in his office alone with the respondent. Counsel further submitted that these considerations justified the admission of the evidence on the appeal, even if Mr Trisley's evidence was not sufficient to establish that the respondent had been given an adequate explanation of the effect of the relevant transactions between the parties being, in substance, the transfer of two parcels of real estate, in each of which the respondent had an interest as part owner, to a discretionary family trust of the first and second appellants in which the respondent was not a beneficiary. I am by no means persuaded that the evidence given by Mr Trisley was such as to be likely to have had the effect suggested if it had been adduced at the trial, but even on the assumption that that would have been the case, that consideration is not sufficient to entitle the appellants to a grant of leave to adduce that evidence on the appeal. In this connection the appellants are also required to establish that the evidence could not, even with reasonable diligence, have been produced at the trial (see later). Counsel for the appellants conceded, in effect, that the evidence of Mr Trisley could have been produced at the hearing before Windeyer J if the appellants had been reasonably diligent and had wished to do so. This concession was, in my opinion, properly made, as it is plain, as was submitted by counsel for the respondent that, in the course of the hearing before Windeyer J, both the first and second appellants and the respondent gave evidence as to what had been said by Mr Trisley to the first and second appellants and the respondent at relevant times. The giving of that evidence must, necessarily, in my opinion, have involved the waiver by both the appellants and the respondent of any obligation of confidence or legal professional privilege in respect of what Mr Trisley said on those occasions, which had formedthe basis for Mr Trisley's original decision to decline to give evidence. In my opinion, however, even before such evidence could have been given at the trial, it was open to the appellants to have made an interlocutory application to the Court to obtain a determination as to Mr Trisley's position prior to the commencement of the hearing, or to serve a subpoena on Mr Trisley to give evidence at the hearing, on the return of which subpoena the relevant issues could have been determined by the Court. I note that no evidence was adduced at the trial to explain why Mr Trisley had not been called. I also note that the Court was informed from the bar table that Mr Trisley had in fact been subpoenaed on behalf of the respondent but was ultimately not called to give evidence. I do not consider that that circumstance has any relevance to the present application. I would only add that it may well be that neither of these steps was taken on behalf of the appellants after due consideration, and for reasons which those who made the decision considered to be good in all the circumstances, but, even if that URJ POLLICINO, POLLICINO, VAIELA PTY. LIMITED v POLLICINO (Simos AJA) 3 were so, the position would still remain that the evidence of Mr Trisley could have been adduced at the hearing if it had been desired to do so. Counsel for the appellants submitted, however, that, notwithstanding this concession, the Court retained a discretion to give leave to adduce the additional evidence upon the basis that special grounds had, nevertheless, been established. In this connection counsel relied upon the decision of this Court in Nyerlucz v Dei Rocini (8 September 1995, unreported) in which Clarke JA held as follows: The power to admit further or fresh evidence concerning matters which occurred prior to the trial or hearing is more circumscribed in that the Court may only exercise its discretion to admit that evidence if it is satisfied that there exist "special grounds" in the particular case. There is no precise formula which needs to be satisfied in order to establish special grounds .... The cases have, however, usually proceeded on the basis that it is necessary to satisfy the three tests on which, according to a long line of authority, fresh evidence is admitted on applications for a new trial from the verdict of a jury. Those tests are well understood but they have been expressed in many different ways. It is convenient for present purposes to take the concise definition of the tests expressed by Jordan CJ in Preston v Green (1944) 61 WN (NSW) 204: "(1) Is the new evidence prima facie likely to be believed? (2) If believed, would it be likely to be a determining or at least a very important factor in the result of the trial? (3) Is it evidence that might have been produced at the hearingif the applicant had been reasonably diligent?" ... The strict inquiry upon which the Court has embarked is not whether the three tests have been satisfied but whether, in the circumstances of the present case, special grounds exist. Although I would agree that it would only be in rare cases that the Court would find that special grounds existed in the absence of the satisfaction of the three tests the Court is obliged to exercise its powers under the Statute and is not constrained by section 75A(8) to find against the appellant because of its failure to satisfy the third test. Furthermore, as the High Court pointed out in Commonwealth Bank of Australia v Quade and Ors. (1991) 178 CLR 134, at 140, there is a passage in the leading judgment of Dixon CJ in Greater Wollongong Corporation v Cowan (1955) 93 CLR 435, at 444 which: "Leaves open the possibility of exceptional circumstances justifying a departure from the general rule even in the class of case to which the general rule is directed." In the exceptional circumstances of that case a majority of the Court granted leave to adduce fresh evidence on the hearing of the appeal. In the present case, however, I am of the opinion that no special grounds have been shown to exist which would justify the Court granting leave to adduce fresh evidence notwithstanding the appellant's failure to satisfy the third test referred to above. Accordingly, in my opinion, the application for leave to adduce fresh evidence on the hearing of this appeal should be dismissed with costs. 1. Application for leave to adduce fresh evidence dismissed. 2. The appellants to pay the respondent's costs of the application. Counsel for the appellants: M. Finnane: QC: with D.L. Williams Solicitors for the 4 UNREPORTED JUDGMENTS appellants: Turnbull Hill Partners Counsel for the respondent: G.J. McVay Solicitors for the respondent: Sparke Helmore and Withycombe