Supreme Court New South Wales Medium Neutral Citation: In the matter of Calabria Community Club Ltd [2013] NSWSC 303 Hearing dates: 15 February 2013 Decision date: 15 February 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Evidence rejected as irrelevant Evidence rejected as hearsay, business records exception not made out Evidence rejected as unfairly prejudicial Catchwords: EVIDENCE - objections to evidence - defendant seeks to tender responses to a survey - relevance - hearsay - prejudice Legislation Cited: (NSW) Evidence Act 1995, s 69(3)(a) Category: Procedural and other rulings Parties: Carbone, Pasquale (First Plaintiff) Marrapodi, Silvio (Second Plaintiff) Perri, Filippo (Third Plaintiff) Labbozzetta, Anthony (Fourth Plaintiff) Calabria Community Club Ltd (Defendant) Representation: Counsel: DS Weinberger (Plaintiffs) G Laughton SC (Defendant) Solicitors: Gillis Delaney Lawyers (Plaintiffs) Maclarens Lawyers (Defendant) File Number(s): 2012/ 60565 Judgment (ex tempore) 1HIS HONOUR: The defendant tenders a bundle of responses to a survey that it distributed in January 2012, apparently after deciding to do so at a board meeting on 12 January 2012. Responses were obtained during January and at least up until 27 February 2012. The defendant wishes to submit that the responses evidence a common intention of members of the club that the land be developed, and thus rebut the allegations in the statement of claim to the effect that that there has been a failure of the substratum of the club. 2As I understand the law in respect of failure of substratum, the question is whether the original common fundamental purpose of the company is no longer capable of attainment, not whether the members of the company have subsequently identified some new and different purpose which can be pursued. Indeed, it is in just that type of situation, where members - perhaps the majority of a company - embark on some direction quite different from the original purpose of the company, that cases of failure of substratum typically arise. Accordingly, I do not think it relevant to show that the majority of the members of the club have agreed to some new direction for it. 3That is by no means to say that pursuit of a redevelopment of the land would in any event be outside the club's objects, or would represent a failure of the substratum, but simply that proof that the members had agreed on such a course does not constitute an answer in the legal sense to the allegation that the substratum has failed. Accordingly, it seems to me that this material is not relevant for the purpose for which it is tendered. 4Secondly it is, by its nature, hearsay, being surveys completed by persons to whom they were sent and whose answers are now tendered as evidence. It is said that the responses would be admissible as business records under s 69. However, as it seems to me, litigation between the club and Mr Carbone - which, while the correspondence to that point had largely focused on the procedural issues, necessarily involved the club's decision to obtain funding for redevelopment and not just to repay the existing or pre-existing loans - was contemplated at least by 12 January 2012, at which date correspondence from Mr Carbone's lawyers of 16 December and 27 December to the club's lawyers was considered. 5Accordingly, it seems to me that the survey was dispatched, and thus the representations that the responses to it contain were obtained, in contemplation of an Australian proceeding, within (NSW) Evidence Act 1995, s 69(3)(a). This has the consequence that those responses are not admissible as business records, assuming, without deciding, that they otherwise would be. 6Finally, to confront the plaintiff with this material, in an annexure to an affidavit sworn on 6 February 2013, a week before the adjourned hearing resumed and after the plaintiff's case was closed, and in circumstances where respondents to the survey could not be cross-examined, and where some of the questions in the survey (for example, see question 19, "Do you agree that the club should maintain as much control as possible over the development of its site?" and question 16, "Are you against selling the club's land?") are leading in character, would occasion prejudice to the plaintiff that would significantly outweigh such probative value as it might otherwise have. 7I therefore reject the results of members' survey (page 366) and the responses to the survey (pages 367-790) of exhibit GG1. Pages 871 to 952 are not tendered. The balance of the two volumes exhibit GG1 will be exhibit DX39.1 and 39.2 respectively. ********** 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: 10 April 2013