Supreme Court New South Wales Medium Neutral Citation: Pastizzi Cafe Pty Ltd v Hossain [2011] NSWSC 765 Hearing dates: 20 July 2011 Decision date: 20 July 2011 Jurisdiction: Equity Division Before: Gzell J Decision: Use of expert evidence refused. Catchwords: EVIDENCE - Expert Evidence - no application under Uniform Civil Procedure Rules 2005, Pt 31 r 31.19 and Practice Note SC Eq 5 [13]-[15] - non-compliance Sch 7, cl 5(1) - no acknowledgment of reading Expert Witness Code of Conduct or bound in terms of r 31.23(4) - non-compliance r 31.27(1)(e) and r 31.27(1)(f) - no indication of how expert moves from statement of facts to opinions expressed - opinion as to insolvency based on ATO debt when evidence of agreement to pay $100 a week until dispute resolved - rival business takings suggestive of ability to pay debts as and when due Legislation Cited: Uniform Civil Procedure Rules 2005 Practice Note SC Eq 5 Cases Cited: Australian Securities and Investments Commission v Rich [2005] NSWSC 149; (2005) 190 FLR 242 Category: Procedural and other rulings Parties: Pastizzi Cafe Pty Ltd (First Plaintiff) Deborah Ross (Second Plaintiff) Len Ross (Third Plaintiff) Miraj Hossain (First Defendant) Talukder Enterprises (Second Defendant) Representation: Counsel A McInerney/M Bennett (Plaintiffs) J R Young (Defendants) Solicitors Michael Fitzgerald (Plaintiffs) Mooney & Kennedy Solicitors (Defendants) File Number(s): 2011/153417 EX TEMPORE Judgment 1The defendants seek to read an affidavit of Pino Fiorentino sworn on 22 June 2011 and a subsequent affidavit sworn on 19 July 2011. Mr Fiorentino is a registered liquidator and an official liquidator of the Court. 2No application was made to adduce expert evidence under the Uniform Civil Procedure Rules 2005, Pt 31 r 31.19 and Practice Note SC Eq 5 at [13]-[15]. 3Mr Young who appears for the defendants acknowledges that the report of Mr Fiorentino does not comply with the rules. It does not comply with Sch 7 to the Uniform Civil Procedure Rules in that it does not include statements required by cl 5(1). 4Mr Fiorentino does not acknowledge that he has read the Expert Witness Code of Conduct, nor that he is bound by it in preparing the report in terms of r 31.23(4). Mr Young submits that he does set out in his report the principles that are addressed by the requirements in Sch 7, and if the reading of his affidavit is allowed, he will be provided for cross-examination, and prior to that he will say that he has read the Code and is bound by it. 5The report does not refer to any literature or other materials used in support of the opinions, nor to any examinations, tests or investigations upon which he relied in terms of r 31.27(1)(e) and r 31.27(1)(f). 6More significant is the lack of indication of the way in which Mr Fiorentino has moved from the statement of facts to the expression of an opinion. For example, he sets out at [8.3] the documents produced and the documents not produced in answer to a notice to produce. He then at [9.5] itemises financial records that were provided and at [9.6], significantly, the relevant financial records not produced. At [10.1] he then says this: "In my opinion the quality of the books and records of the Company produced to date do not appear to comply with the requirement under section 286(1) of the Corporations Act 2001." 7There is no explanation as to how he moves from the absence of relevant financial records to the expression of that opinion. 8Furthermore, the question of the failure to provide financial records is not an issue joined on the cross-summons filed on 29 June 2011. 9At [12] Mr Fiorentino deals with the question of solvency of the first Plaintiff. He expresses the opinion that the first Plaintiff is insolvent and has been since at least 1 October 2009 as it had a liability to the Australian Taxation Office in respect of the 2009 June quarter in the sum of $18,556.51, which it has not been able to pay as and when it fell due in August 2009. 10There is evidence, however, that an arrangement has been struck with the ATO during the period that the first Plaintiff has been out of possession for the payment of $100 a week. 11The rival business that was set up by the Defendants upon the eviction of the first Plaintiff is continuing and continues, suggesting an ability to pay debts as and when due from takings. 12The concentration on the ATO debt as the basis for the expression of the opinion as to solvency suggests that the opinion is unlikely to carry much weight. 13The similarity to rejection of evidence by Austin J in Australian Securities and Investments Commission v Rich [2005] NSWSC 149; (2005) 190 FLR 242 is obvious. At [53]; 257 his Honour said this: "...propositions...in the sense that they purport to provide a bridge, or more accurately a series of connecting bridges, between the documentary evidence and the ultimate conclusions expressed in answer to ASIC's questions. The intermediate propositions often have the appearance of propositions of fact, but a full reading of the Report (including footnotes) shows that those propositions purport to be derived from the documents, through processes of reasoning, such as by inference or through calculations." 14In all the circumstances, it seems to me that I should reject the use by the Defendants of the two affidavits of Mr Fiorentino. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 July 2011