New South Wales Supreme Court CITATION : Macquarie International Health Clinic Pty Ltd v Central Sydney Area Health Service [2002] NSWSC 829 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1790/00 HEARING DATE(S) : 2 September 2002 JUDGMENT DATE : 2 September 2002 PARTIES : Macquarie International Health Clinic Pty Ltd (Plaintiff) Central Sydney Area Health Service (Defendant) JUDGMENT OF : Campbell J COUNSEL : D Hammerschlag SC (Plaintiff) G K Burton (Defendant) SOLICITORS : Blake Dawson Waldron (Plaintiff) Bolzan & Dimitri (Defendant) CATCHWORDS : PROCEDURE - Supreme Court procedure - motion, under section 76A Supreme Court Act and Part 26 rule 1 Supreme Court Rules, prior to allocation of hearing date or appointment of trial judge, for order that a party not be permitted to rely on identified parts of that party's affidavit evidence - consideration of in what circumstances rulings on evidence should be made well in advance of trial LEGISLATION CITED : Evidence Act 1995 DECISION : Application refused IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J MONDAY 2 SEPTEMBER 2002 1790/00 MACQUARIE INTERNATIONAL HEALTH CLINIC PTY LTD v CENTRAL SYDNEY AREA HEALTH SERVICE JUDGMENT 1 HIS HONOUR: This is an application which is made under s 76A of the Supreme Court Act and Pt 26 r 1 of the Supreme Court Rules. Section 76A empowers the Court to give such directions as are appropriate for the speedy determination of the real questions between the parties. Part 26, rule 1 establishes a criterion for directions as those which are convenient "for the just, quick and cheap disposal of the proceedings". The application seeks, firstly, an order that the plaintiff not be permitted to rely on, as part of its evidence-in-chief at trial, certain parts of the plaintiff's evidence which have been objected to in a particular document which the defendant has filed, and which gives detailed grounds for objection to the plaintiff's affidavits. 2 The plaintiff has conceded that certain of the objections of the defendant are well founded, but there are numerous other objections which the defendant has made, which the plaintiff does not concede are well founded. The point of today's application is to deal with those matters that the plaintiff does not concede are well founded. 3 The proceedings are ones which arise from a contract entered into by the plaintiff whereby it would construct a private hospital and carpark for the defendant on some land near Prince Alfred Hospital. 4 A set of documents was entered into in December 1996 to enable this to occur. Those documents themselves followed on from the entering into of a heads of agreement document in 1989. There had been some significant disputes between the parties concerning what their obligations were under the heads of agreement document, which were on the point of being submitted to arbitration in 1996, when the December 1996 documents were entered into. Those documents included two leases, one of land intended as the site of the hospital, the other of land intended as the site of the carpark. 5 The plaintiff was excluded from the land the subject of the hospital lease and the carpark lease in March of 2000. By these proceedings, the plaintiff claims damages for trespass, and an order for possession of the land the subject of those two leases. 6 The issues involved in the case revolve around whether the defendant really was entitled to terminate the leases at the time it did. The defendant alleges that there were various breaches of the plaintiff's obligations which entitled it to terminate; the plaintiff denies that this is so. In particular, as part of its claim, the plaintiff asserts that the powers of termination of the defendant were not exercised in good faith, or reasonably. 7 Part of the basis on which this allegation is made is that the defendant entered into arrangements for construction of another private hospital, near Prince Alfred Hospital, with another company besides the plaintiff, and that the defendant did not tell the plaintiff about its plans to do so. 8 As well, there is an allegation that there were some changes in the master plan for the Prince Alfred Hospital, which made significant changes to the viability of the hospital which the plaintiff was proposing to build. 9 For the purposes of today's application the parties have concentrated on objections which were taken to an affidavit of Raymond Block sworn 31 May 2002. The affidavit of Mr Block includes some accounts of negotiations which he had in 1996 with Mr Puplick, who was then the chairman of the defendant, concerning the terms on which the dispute which the parties then had on foot might be resolved. There is quite a volume of documentation exhibited to Mr Block's affidavit which goes to that negotiation. 10 The affidavit is objected to on many grounds, paragraph by paragraph. One of the grounds that is relied on for many paragraphs is that the negotiations were the subject of a without prejudice privilege. The availability of that privilege now depends on s 131 of the Evidence Act. 11 The plaintiff says that, even assuming for the purposes of argument (and the plaintiff does not concede that this concession ought ultimately be made) that the evidence of negotiation falls within s 131 subs 1, there are many subsections in s 131 subs 2 into which the evidence of the negotiations might fall. By way of example, the plaintiff points to paras B, E and G. If the plaintiff proves to be right in that submission, no without prejudice privilege will attach to this evidence. 12 It seems to me that I can not make a finding at this stage that it is inevitable that a without prejudice privilege will attach to this evidence. 13 There are also objections taken to many of the paragraphs on the grounds of relevance. So far as the negotiations or the 1996 documents are concerned, I am not in a situation where I would be prepared to strike out the paragraphs on that ground. 14 The preparation of the case is not yet complete. The making of rulings about admissibility is, it seems to me, very much a function which ought be performed by the trial Judge, save in exceptional circumstances. It is not as though this is a case where rulings on evidence will have the same effect as a summary dismissal of part of a claim, or of part of a defence. Nor is it the case that here one can clearly say that the events which are objected to by the defendant are ones which are bound to be irrelevant at the trial. 15 For instance, it could in some circumstances be relevant to an argument about lack of bona fides in exercise of a contractual power that nothing at all was said in the negotiations which preceded the entry of the contract, about some particular matter. If, at the trial, it turns out that the evidence which has been objected to has been no help at all to the trial Judge, it is always possible for a defendant to seek a special order for costs concerning it. If the defendant has any concerns about the ability of a plaintiff to meet any such order it can always seek to protect itself by an application for security for costs. 16 I rely not only on matters which relate to the minutiae of this particular case. It also seems to me that it is frequently undesirable to encourage an arrangement where trials come to be in practice split, with a preliminary trial concerning the admissibility of evidence and then, at some later stage, the rest of the trial. 17 To be able to respond to questions about admissibility of evidence counsel need to have, in effect, the case ready for trial. It is wasteful and expensive for this to happen more than once. Further, when competent counsel have a case properly prepared for trial they are often willing to make concessions about whether evidence should be pressed – concessions that, at an earlier stage of preparation, it might be imprudent, or counsel might be unwilling, to make. 18 There are some passages in particular paragraphs which are objected to on grounds of form, or that they are opinion evidence, or that they are hearsay. It seems to me that it is not desirable, on a preliminary motion such as the present, to go through line by line the affidavits which have been filed, dealing with this sort of objection. That is very much, it seems to me, the function of a trial Judge. When the broad grounds on which the affidavits are sought to be not permitted to be read are ones which I am not prepared to uphold, I do not think it is appropriate to descend to the minutiae of each paragraph. 19 I therefore decline to make the order which has been sought. ********** Last Modified: 09/17/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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