Australian Pharmaceutical Industries v Egan [2010] NSWSC 203

New South Wales Supreme Court

CITATION : Australian Pharmaceutical Industries v Egan [2010] NSWSC 203

HEARING DATE(S) : 26/2/10 JURISDICTION : Equity Division Commercial List

JUDGMENT OF : McDougall J at 1

EX TEMPORE JUDGMENT DATE : 26 February 2010

DECISION : Leave to withdraw admission not granted

CATCHWORDS : PROCEDURE - admissions - application for leave by defendant to withdraw admission made in cross-examination - whether admission made inadvertently or without consideration of material matters - where relevant material had been put before defendant and defendant was questioned fairly about it - whether admission reflected true state of affairs.

CATEGORY : Procedural and other rulings

CASES CITED : Hill End Gold Ltd v First Tiffany Resources Corp [2008] NSWSC 866 Stafford v Kekatos (No 2) [2008] NSWSC 1044

PARTIES : Australian Pharmaceutical Industries Limited (Plaintiff) Elizabeth Anne Egan (Defendant)

FILE NUMBER(S) : SC 2009/298774

COUNSEL : M Condon (Plaintiff) S O'Brien (Defendant)

SOLICITORS : Holman Webb Lawyers (Plaintiff) McDonald Johnson Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

McDOUGALL J

26 February 2010

50167/09 AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED v EGAN JUDGMENT

1 HIS HONOUR: Two notices of motion were referred to me today for hearing in these proceedings. In point of time, the first notice of motion was the plaintiff's, filed on 2 December 2009, in which it sought among other things, orders that the commercial response be struck out and judgment. 2 That notice of motion has been amended by an amended notice of motion filed in Court today in which the plaintiff seeks leave to file an amended list statement (that leave has been given) and, among other things, judgment for the amount as claimed on a summary basis. 3 The other notice of motion is the defendant's notice of motion in which she seeks leave to withdraw an admission made by her in cross-examination on 14 December 2009. 4 The admission identified in the defendant's notice of motion is "that the plaintiff has given the defendant credit for an amount of $935,000 as shown in" a certain document. That was put to the defendant in cross-examination on an earlier occasion. I was informed that the two notices of motion would take between them two hours of hearing time: an accurate assessment but for a matter to which I shall refer in due course. 5 Accordingly, that estimate being at what I might call the outer end of time available on a Friday (and just below the limit by reference to which special fixtures should be set) I proceeded with the hearing of the two motions. Logically, the defendant's notice of motion was the first dealt with. 6 The admission in question was made in cross-examination on 14 December 2009, in the course of the hearing the unamended notice of motion of the plaintiff. It is desirable to know a little of the background to these proceedings. 7 The plaintiff supplies, among other things, pharmaceutical goods to its customers who are pharmacists carrying on business throughout New South Wales and, no doubt, elsewhere. The defendant has at all material times carried on a pharmacy known as the Derby Street Day Night Chemist and has at all material times been a customer of the plaintiff. 8 The plaintiff's case is that there is a balance owing today, on the defendant's account for goods sold and delivered, in excess of $3.5 million. 9 The defendant contested the amount due, and asserted amongst other things that the plaintiff's records did not give credit for at least one significant payment. She referred to a payment of $935,000 made on about 29 January 2004. That money was received as part of the proceeds of a loan transaction made between the defendant and her bank. 10 I have a strong impression that the defendant's record-keeping skills are not of a high order. That may be wrong or it may be right; it is not intended to be a criticism but it means, I think, that the defendant was genuine when she said that she could not understand the state of accounts between her and the plaintiff. 11 It has to be said that her understanding has not necessarily been assisted by the way in which the plaintiff has presented at least some statements of the account, but that is by way of background only. 12 It is important to know that in March 2008 the plaintiff and the defendant entered into a deed with the somewhat unusual title of "Security Interest". By recital B to that deed, the parties acknowledged that the defendant owed the plaintiff a trading account debt as at 5 March 2008 of $3,226,487.59. By recital C, the parties acknowledged that the plaintiff was prepared to defer payment of part of that sum, $1,856,884.80, on conditions including that it receive certain specified securities. By cl 2.3 of that deed, it was stated that the defendant had entered into the agreement in consideration of the plaintiff not making demand for the amount of $1,856,884.80 and transferring that to a deferred payment account. 13 The evidence of Mr Angus Clemie is that from time to time, when customers of the plaintiff got into difficulties, deferred payment arrangements are made, the effect of which is to put off payment of part of the amount owing so as to enable them to keep trading and, it is hoped, pay out the full amount owing to the plaintiff. 14 In substance, the agreement of March 2008 was intended to effect such an arrangement between the plaintiff and the defendant, but with the plaintiff's position being secured. 15 As I have said, the plaintiff's original notice of motion came on for hearing before me on 14 December 2009 (a Monday). It had been returnable the preceding Friday (11 December 2009) and had been given a special fixture. 16 The plaintiff had evidence of the kind that is usually found in applications for summary judgment, in anticipation of the defendant's response being struck out (which had to happen because it was woefully inadequate). The defendant put on evidence by which she sought to show that the plaintiff's accounts did not accurately reflect the balance between her and it. Her evidence made no reference to the deed nor to the admission effected by recital B (or the facts the subject of that recital). 17 The plaintiff's evidence included an affidavit of its solicitor, Mr Stephen David Rogers. He dealt, among other things, with the defendant's proposition that an amount of $935,000 which was paid had not been credited to her account. He annexed to his affidavit a statement for an account number 80225 which showed that a cash amount of $935,000 had been paid and credited on 29 January 2004, reducing the balance outstanding on the account accordingly. That affidavit, or at least the annexure, was given to the defendant on 11 December 2009. The defendant was cross-examined on, among other things, that statement of account. Before the cross-examination turned to the statement, it established that the defendant had had the benefit of accounting advice since at least 2005, in particular of an accountant, Mr Duncan, who had been asked to investigate the plaintiff's claims and who was said to have produced some sort of reconciliation. Against that background, the defendant was shown the statement to which I have referred (annexure A to Mr Rogers' affidavit of 11 December 2009). 18 The defendant's attention was drawn to the credit for $935,000. She acknowledged that she had seen the document (for the first time) the preceding Friday. She was then asked, by reference to the document, whether she disputed that the amount in question had been credited to the account. She answered: "Well seeing this it looks like it has, yes." 19 She was asked whether she disputed the amount that had been credited to her account, to which she answered "No". She then gave the following evidence at T4.30-35: Q. That amount is in dispute, having now seen this document do you now accept that there is no dispute about that $935,000 figure? A. Yes.