MindShare Communications Ltd v Orleans Investments Pty Ltd [2007] NSWSC 637

New South Wales Supreme Court

CITATION : MindShare Communications Ltd v Orleans Investments Pty Ltd [2007] NSWSC 637

HEARING DATE(S) : 14 June 2007

JUDGMENT DATE : 14 June 2007

JURISDICTION : Equity

JUDGMENT OF : Hamilton J

DECISION : Leave granted to withdraw admission in defence to cross claim.

CATCHWORDS : PROCEDURE [99] - Supreme Court procedure - Practice under Supreme Court Rules - Admissions - Withdrawal - Absence of absolute right to withdraw - Discretionary considerations.

Celestino v Celestino ACTSCFC 16 August 1990 unreported Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 Dalswinton Pastoral Company Pty Ltd v Cole [2006] NSWSC 570 CASES CITED : Drabsch v Switzerland Insurance Co Ltd NSWSC 16 October 1996 unreported For the Good Times Pty Ltd v Coltern Pty Ltd [2007] NSWSC 108 Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327 Silver v Dome Resources NL [2005] NSWSC 265 Sirius Shipping Corporation v The Ship Sunrise [2006] NSWSC 164

Mindshare Communications Limited, Taiwan Branch (P) PARTIES : Orleans Investments Pty Limited t/as the Orleans Media Consultancy (D1) Wayne Eckett (D2)

FILE NUMBER(S) : SC 1157/05

COUNSEL : J K Kirk (P) K G Odgers (Ds)

SOLICITORS : Allens Arthur Robinson (P) Breene and Breene (Ds)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

THURSDAY, 14 JUNE 2007

1157/05 MINDSHARE COMMUNICATIONS LTD, TAIWAN BRANCH v ORLEANS INVESTMENTS PTY LTD t/as THE ORLEANS MEDIA CONSULTANCY & ANOR JUDGMENT 1 HIS HONOUR: This is an application to withdraw an admission in the defence to amended cross claim. The admission is an admission made in particular (c) appended to paragraph 10 in the following terms: "On or about 3 November 2004 Mr Mark Patterson, a servant or agent of the cross-defendant, advised Mr Vernon Bradley of Nestle Greater China that the cross-defendant was not prepared to work with the first cross-claimant as a consultant to Nestle if the cross-claimant was carrying out certain services for Nestle." 2 The principal ground on which the defendants resist the application to withdraw is the requirement enunciated in the joint judgment of Spender, Miles and Von Doussa JJ in the Full Court of the Federal Court of Australia in Celestino v Celestino ACTSCFC 16 August 1990 unreported. Their Honours there said that on an application for leave to withdraw an admission a court will require an explanation for the making of the admission: "The explanation must be a sensible one based on evidence of a solid and substantial character: Langdale v Danby [1982] 1 WLR 1123 at 1134; Hollis v Burton [1892] 3 Ch 226; and Cumper v Pothecary [1941] 2 KB 58 at 70." 3 The authorities usually relied on in this Court in this area of the law are the decision of Rogers CJ Comm D in Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738; the decision of Santow J (as his Honour then was) in Drabsch v Switzerland Insurance Co Ltd NSWSC 16 October 1996 unreported; and the decision of the Full Court of the Federal Court in Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327: see also my judgments in Silver v Dome Resources NL [2005] NSWSC 265 and Dalswinton Pastoral Company Pty Ltd v Cole [2006] NSWSC 570 and those of the Chief Judge in Equity in Sirius Shipping Corporation v The Ship Sunrise [2006] NSWSC 164 and For the Good Times Pty Ltd v Coltern Pty Ltd [2007] NSWSC 108. 4 Nothing in any of those judgments detracts from the formulation of the need for an explanation cited above from Celestino. However, in this case an explanation is given. Mr Peter Arthur, the plaintiff's solicitor, has deposed that he was the draftsman of the defence, including the relevant portion, and that he drew it in some haste to comply with a time limit after he had had a telephone conversation with Mr Mark Patterson. Without going into detail, he has deposed that he was at some cross purposes with Mr Patterson in relation to the instructions he obtained that led him to formulate the admission. He has since obtained more detailed instructions from Mr Patterson concerning the relevant conversation said to constitute or embody the conduct admitted and this conversation has now been set out in Mr Patterson's affidavit sworn 22 May 2007. On the basis of that conversation it is well arguable that the admission was misguided and that nothing in the conversation justified the making of the admission. The defendant objects that the explanation is not a sensible one based on evidence of a solid and substantial character, in the words in Celestino, but I do not agree that that is so. Precise evidence has been given as to how the mistaken admission came about. 5 Further objection is taken on behalf of the defendants that the pleading was verified by a Mr Steedman and that there is no explanation as to how Mr Steedman came to verify a pleading that contained the admission. However, Mr Steedman was not a party to any of the conversations involved. No doubt he had the pleading laid before him for verification by the solicitors as appropriate to be verified by him in relation to matters that they had investigated and I do not think any further explanation from Mr Steedman is necessary. The necessary explanations have been attested to by Mr Arthur and by the further account of the conversation given by Mr Patterson. 6 The admitted matter is in very small compass. It relates to one telephone conversation between one person on one side of the record and one other person and no evidence is laid before me on behalf of the defendants of any prejudice that will be suffered by the defendants by the withdrawal of this narrow admission, even at this comparatively late stage. 7 In all the circumstances I propose to grant the leave to withdraw that is sought. 8 The orders of the Court therefore are: (1) Grant leave to the plaintiff to file on or before 21 June 2007 an amended defence to amended cross claim withdrawing the admission in particular (c) appended to paragraph 10 of the defence to amended cross claim. (2) Order that there be no order as to the costs of the plaintiff's notice of motion filed 9 May 2007. (3) Order that the plaintiff pay the defendants' costs thrown away by the amendment. (4) Directions in accordance with short minutes initialled by me and placed with the papers.