Supreme Court New South Wales Medium Neutral Citation: Barescape Pty Ltd & Anor v Bacchus Holdings Pty Ltd & Anor (No 7) [2012] NSWSC 384 Hearing dates: 9-12 August, 15-18 August, 6-9 September 2011, 12-16 September 2011, 12 October 2011, 9 March 2012, 2 - 5 April 2012, 10 - 13 April 2012 Decision date: 13 April 2012 Jurisdiction: Equity Division Before: Black J Decision: PRACTICE AND PROCEDURE - Applications to tender documents in course of trial - Rulings on tenders. Catchwords: Detailed rulings as to specific applications to tender documents. Legislation Cited: - Evidence Act 1995 (NSW) ss 69, 135, 136 Category: Interlocutory applications Parties: Barescape Pty Ltd atf The Vs Family Trust (First Plaintiff/First Cross-Defendant) Anthony Ventura (Second Plaintiff/Second Cross-Defendant) Midfielder Pty Ltd (Third Cross-Defendant) Bacchus Holdings Pty Ltd atf The Bacchus Holdings Trust (First Defendant/Cross-Claimant) Matthew Gordon Higgins (Second Defendant) Representation: Counsel: C. D. Wood (Plaintiffs/Cross-Defendants) A. A. Henskens SC, N. E. Furlan (Defendants/Cross-Claimant) Solicitors: Anthony Ventura (Plaintiffs/Cross-Defendants) Bilbie Dan (Defendants/Cross-Claimant) File Number(s): 09/291437 Judgment- EX TEMPORE Tender of tax invoices exhibited to Mr Vella's report 1The Cross-Claimant Bacchus Holdings Pty Ltd atf The Bacchus Holdings Trust ("Bacchus Holdings") seeks to tender seven tax invoices which were referred to by Mr Vella, the accounting expert retained by the Cross-Defendants, in his first report. The documents are, on their face, documents which allow an inference of authenticity to be drawn (consistent with the principles which I noted in my earlier judgment delivered on 12 October 2011: [2011] NSWSC 1307) and appear to be business records which would be admissible under s 69 of the Evidence Act 1995 (NSW). 2A question remains whether the documents should be the subject of a discretionary exclusion under s 135 of the Evidence Act on the basis that their tender at a very late stage in the hearing would be unfairly prejudicial to the Cross-Defendants. I am not satisfied that there is unfair prejudice to the Cross-Defendants in the tender of documents of this kind which were referred to by Mr Vella, notwithstanding that they may have been obtained by him through the process of exchange of information between the experts. There has been sufficient opportunity to make any enquiries that would be necessary to raise any challenge to these documents and it could not be assumed that documents of this kind referred to by the accounting experts would not be led in evidence in the proceedings. Accordingly, subject to an issue as to discovery to which I refer below, I do not consider these documents should be excluded under s 135 of the Evidence Act. 3An issue was raised as to whether these documents and other documents had been discovered by Bacchus Holdings and an issue may also arise as to whether they were discoverable. There was some contest as to the question whether the documents were discovered, but this is a matter of objective fact as to which the parties' solicitors, acting in accordance with their professional responsibilities, should be capable of reaching agreement. I direct the parties' solicitors to advise me in a joint document (and, if they cannot agree, that joint document should record their respective positions) as to whether the documents comprised in Exhibit D97 and tab A44 to Exhibit D66 were discovered by 4.00pm next Friday, 20 April. That document should also include any submissions the parties wish to make as to whether the documents were discoverable. I will reserve the question of exclusion of the documents by reason of any breach of discovery obligations to a judgment which I will deliver in Chambers if it becomes necessary to do so, or I will alternatively deal with that matter in my final judgment if it is necessary to do so. Application to tender 877 pages of point of sale records in course of cross-examination of Mr Vella 4On the last day allocated for evidence in these proceedings, the 27th day of the hearing, application was made by Bacchus Holdings to tender 877 pages of documents extracted from the current point of sale ("POS") system of the Bacchus Restaurant (covering the period 17 November 2009 to 27 June 2010) during Mr Vella's cross-examination. It appears that Mr Vella was provided with these documents for the purposes of preparing his report. A difficulty has previously arisen during the hearing of this trial with access to POS information of the Bacchus Restaurant in respect of the earlier part of the period in issue in the proceedings, to which the Cross-Defendants have previously drawn attention on several occasions, namely that the POS system which was previously used by the Bacchus Restaurant had been discontinued and, although the hardware had been retained, it was not functional so as to allow the Cross-Defendants to access information contained on it. 5It appears that copies of these records for the later period, which originate with the Bacchus Restaurant, were provided by the Cross-Defendants to Mr Vella to allow him to undertake analysis based upon them. These documents may well be authentic and they may well be business records, but both of those matters are matters which the Cross-Defendants would be entitled to explore in an orderly way. I have no doubt that it would be unfairly prejudicial to the Cross-Defendants, for the purposes of s 135 of the Evidence Act, to place them in a position where, on the last day of evidence in the hearing, 877 pages of POS records for the later part of the relevant period are tendered without either Bacchus Holdings leading evidence of authenticity or the manner in which they have been prepared and without the conclusions sought to be drawn from these documents having been dealt with in the expert evidence led by Bacchus Holdings so as to allow counsel for the Cross-Defendants to cross-examine that expert witness. Mr Wood puts, and I accept, that he could not deal with this information in the circumstances that it is now tendered. 6It is not possible to accommodate that prejudice by adjourning the proceeding further. The proceeding has, as I have noted, continued for a long period and has most recently been listed for a further eight days which will be completed today. It is very likely that the costs incurred in these proceedings are already significantly disproportionate to the likely recovery of either party to the proceedings and a further adjournment will only make them more so. In these circumstances, I have no hesitation in exercising my discretion under s 135 of the Evidence Act to reject the tender of this material. Application to tender extracts from POS records 7A further application is now made by Bacchus Holdings to tender a summary schedule and a series of documents headed "Journal History" which are extracts from the 877 pages of POS material which I had declined to admit in the exercise of my discretion under s 135 of the Evidence Act. I do not need to repeat the reasons I have given for rejecting the tender of those documents in the circumstances in which they were tendered at this late stage of the proceedings. In my view, the reasons I give for rejecting the tender of those documents are equally applicable to an application to tender the extracts from them. 8Bacchus Holdings puts that these documents are relevant because Mr Vella has been cross-examined upon them. However, the fact that Mr Vella has been cross-examined upon these documents does not, in my view, make them admissible if they are not otherwise admissible or are properly excluded under s 135 of the Evidence Act. Mr Henskens has indicated that those documents are tendered to establish the takings of Bacchus Restaurant on particular days and they raise the difficulties to which I have previously referred if tendered for that purpose. In particular, the tender of POS records for that purpose in the circumstances I have set out above would shut out the Cross-Defendants from any adequate opportunity to explore the matters to which I have referred above and whether other evidence may be available to qualify them. The fact that Mr Vella was asked to do an exercise of analysis in respect of these documents does not establish that they are in fact probative of the takings of the Bacchus Restaurant which depends upon matters such as their authenticity and completeness, which are the matters which the Cross-Defendants would be unable properly to investigate because of the circumstances in which the documents are tendered. Accordingly, I do not permit the tender of these documents in the exercise of my discretion under s 135 of the Evidence Act. Tender of balance of Mr Vella's report 9The Cross-Claimant, Bacchus Holdings, also seeks to tender the parts of Mr Vella's report dated 5 July 2011 which were not tendered by the Cross-Defendants. Objection is taken to that course by Mr Wood. Mr Wood in the alternative suggests that such a tender should be subject to an limiting order that nothing in parts of Mr Vella's report proves the truth of the assumptions or instructions given. Mr Henskens has submitted that he does not seek, and opposes, such a limitation. Mr Henskens contends that he is entitled in cross-examining Mr Vella to use Mr Vella's evidence for all purposes. I would, of course, accept that proposition subject to the qualification that the use of such evidence must be in a manner permissible under the Evidence Act. 10Mr Henskens also contends that a presumption of authenticity exists in respect of the documents exhibited to Mr Vella's report such that those documents can be admitted notwithstanding their authenticity is not otherwise proved and, as I understand his submission, even if they would not be admissible as business records for the purposes of s 69 of the Evidence Act. I do not accept that submission. The fact that documents are briefed to an expert does not of itself establish their authenticity or make them admissible under the Evidence Act without those matters being otherwise established. 11Mr Henskens also submits that Bacchus Holdings has conducted the litigation on the assumption that the whole of Mr Vella's report would be read. I find that a surprising submission in proceedings of some complexity, since it is a common experience in litigation that only parts of evidence which is served is led and in the ordinary course parties would prepare against the contingency that other parts of that evidence might not be led. Such preparation would not have been difficult in this case, since Bacchus Holdings has itself retained an expert accountant and it was open to it to seek evidence from that expert accountant as to the matters dealt with in those parts of Mr Vella's report which have not been read. Accepting, as I do when it is put by Senior Counsel, that such an assumption was made, I do not consider it was a reasonable one or that it requires the admission of documents exhibited to Mr Vella's report which would otherwise not be admitted. 12I do not, however, see any difficulty with admitting the remaining parts of Mr Vella's report subject to a common limitation applied to expert reports under s 136 of the Evidence Act, namely, that the expert report does not itself prove either the assumptions made in it or the instructions provided to the expert. I propose to permit the tender of the balance of Mr Vella's report subject to that limitation. Subject to hearing from counsel, I also propose to make a limiting order under s 136 of the Evidence Act to that effect in respect of expert reports generally in the proceedings. ********** 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: 07 May 2012