Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Johnston v Brightstars Holding Company Pty Ltd [2013] NSWCA 341 Hearing dates: 14 October 2013 Decision date: 15 October 2013 Before: Macfarlan JA Decision: Reasons given for the making of orders on 14 October 2013. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: PROCEDURE - appellants issued notices to respondents to produce documents at appeal hearing - notices set aside as abuse of process - no reasonable prospect that documents would be admitted into evidence on appeal - documents assumed by appellants to reveal respondents' intended meaning of letter to appellants containing terms of contract - subjective intentions of parties irrelevant to construction of written contract - no adequate explanation for documents not being sought at first instance Legislation Cited: Supreme Court Act 1970 Cases Cited: Allesch v Maunz [2000] HCA 40; 203 CLR 172 Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337 Coulton v Holcombe [1986] HCA 33; 162 CLR 1 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 Levy v Bablis [2013] NSWCA 28 R v Baines [1909] 1 KB 258 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 Category: Procedural and other rulings Parties: Paul Arthur Johnston (First Appellant) Blair Massey Warren (Second Appellant) Brightstars Holding Company Pty Ltd (First Respondent) Peter Wilson (Second Respondent) Representation: Counsel: C A Botsman (Appellants) C Harris (Respondents) Solicitors: Kemp Strang Lawyers (Appellants) Willis & Bowring (Respondents) File Number(s): CA 2012/350075 (and 2012/348802) Decision under appeal Jurisdiction: 9111 Citation: Brightstars Holding Co Pty Ltd v Johnston [2012] NSWSC 929 - 14 August 2012 Brightstars Holding Co Pty Ltd v Johnston; In the matter of Brightstars Freehold Pty Ltd [2012] NSWSC 1228 - 12 October 2012 Before: Stevenson J File Number(s): SC 2011/324919 Judgment 1HIS HONOUR: The respondents to this appeal applied to set aside Notices to Produce served on them by the appellants for the purpose of the appellants advancing their case at the appeal hearing fixed for 17 October 2013. Yesterday, I ordered that those Notices to Produce be set aside and that the appellants pay the respondents' costs of the application. These are my reasons for so ordering. 2The appeal relates to judgments dated 14 August and 12 October 2012 of Stevenson J of the Equity Division. In the earlier judgment, his Honour made various evidentiary rulings. In the latter, he found that the respondents were entitled to judgment against the appellants in the sum of $198,949.46 under a Deed of Settlement entered into to resolve earlier proceedings. Significant issues in the proceedings were whether the parties entered into a variation agreement in the terms of a letter dated 25 November 2011 from the solicitors for the respondents to the then solicitors for the appellants, the proper construction of any such agreement and whether, if there was no such agreement, the letter gave rise to an estoppel in favour of the appellants. In the letter, what the appellants contended was a contractual offer was followed by the words "As you are aware, our instructions are to proceed on that basis". 3In their written submissions on the appeal, the appellants contend that the primary judge erred in his construction of the letter and complain that he did not deal with the appellants' submission that the letter constituted a representation giving rise to an estoppel. 4By their Notices to Produce, the appellants sought production from the respondents of documents recording instructions given to the respondents' solicitors in relation to that letter and to other communications with the appellants. They also sought the production of documents recording instructions given to those solicitors in various identified communications between the solicitors and their clients. The appellants appear to have ascertained the identity of those communications from a bill of costs submitted by the respondents for the purpose of obtaining an assessment of the costs order made in their favour at first instance. The appellants are aware of the fact, but not the terms, of those communications. 5Before me, the appellants sought to support the Notices to Produce on the ground that production and tender of the documents called for would assist them in persuading the Court at the hearing of the appeal that their construction of the letter should be adopted. The appellants assume, but do not know, that the instructions given by the respondents to their solicitors reflected what the appellants say is the correct construction of the letter. 6This argument is misconceived. The meaning of the letter, assuming it to reflect the terms of a contract entered into between the parties, is to be determined objectively. Parties' uncommunicated views about what a written contract was intended to mean are not relevant to its construction (Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337 at 352; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40]). Similarly, in relation to the appellants' claim that the letter constituted a representation capable of giving rise to an estoppel, the question is what was communicated to the appellants, not what the respondents may have intended to be communicated. 7The irrelevance in this sense of the documents sought marks only the start of the appellants' difficulties in supporting the Notices to Produce. 8More fundamentally, what the appellants seek to do by the Notices to Produce is antithetical to the appellate process. The appeal available to the appellants is, by reason of s 75A(5) of the Supreme Court Act 1970, an appeal by way of rehearing. Such an appeal requires an appellant to establish error on the part of the court below (Allesch v Maunz [2000] HCA 40; 203 CLR 172 at [23]) on the basis of the evidence given at first instance, supplemented, if at all, by evidence admitted on appeal pursuant to the power conferred by s 75A(7) (Coulton v Holcombe [1986] HCA 33; 162 CLR 1 at 7). Where, as here, the evidence in question relates to matters occurring prior to the hearing at first instance, further evidence may not be admitted "except on special grounds" (see s 75A(8)). These principles reflect the fundamental tenet of the judicial system that "the substantial issues between the parties are ordinarily settled at the trial" (Coulton v Holcombe at 7; D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 at [35]). 9It follows from the above that the documents sought by the appellants are not relevant to the hearing on appeal unless there are reasonable grounds for anticipating that they will, when produced, be admitted into evidence by the exercise of the Court's power under s 75A(7), as qualified by subsection (8). The appellants have not made any application under s 75A(7), nor are they able to do so without production of the documents they seek. This is not a case in which the appellants can, by evidence, demonstrate that there is in existence evidence that supports their case and is likely to be admitted into evidence on appeal. Their contention that there is such evidence is purely speculative and, in any event, for the reasons I have given, even if the documents they seek say what they speculate they do, the documents would be irrelevant to the issues of contract construction and estoppel to which they are said to relate. 10Contrary to their submissions, the appellants were not entitled to take a "two stage approach" involving them seeking by their Notices to Produce to ascertain what further evidence is available to them and then, if appropriate, making an application for the admission of further evidence on appeal. To permit this would be to permit an appellant to engage in a speculative, evidence-gathering exercise for the purpose of bolstering its challenge to the judgment below. This would be in stark conflict with the principles to which I have referred. 11A further difficulty for the appellants is that the discretion conferred by s 75A(7) to admit further evidence of matters occurring before the hearing at first instance is ordinarily only exercised if, inter alia, the applicant establishes that that evidence could not have been obtained, by the exercise of reasonable diligence, for use at the trial (Levy v Bablis [2013] NSWCA 28 at [13]). 12At the hearing before me, the appellants sought to explain the absence of earlier attempts to obtain the documents sought by the Notices to Produce by the fact that the appellants' present solicitors first commenced to act for them after the hearing at first instance and were unable until recently to obtain copies of the documents admitted in evidence. This is not a sufficient explanation. The appellants were represented by counsel and solicitors at the trial. The possibility of there being in existence records relating to the respondents' solicitors' instructions to write the letter of 29 November 2011 was obvious. The appellants' then solicitors apparently took the view that the documents would not have been relevant to the issues being litigated and did not seek their production. In these circumstances, the appellants have not demonstrated that there is any reasonable prospect that this Court would exercise its discretion under s 75A(7) in their favour. 13For these reasons, there is no proper basis for requiring the respondents to produce the documents sought by the appellants. Accordingly it was appropriate to set the Notices to Produce aside. The plain irrelevance of the documents to the appeal proceedings justified the conclusion that the Notices to Produce were an abuse of process. I do not consider that it was necessary for the respondents to demonstrate that the appellants had an ulterior purpose such as was found in R v Baines [1909] 1 KB 258 (see at 261 and also Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98 at 100 - 101). 14In these circumstances it is unnecessary to say anything about the further point taken by the respondents that the documents sought by the appellants were privileged solicitor/client communications and that the appellants' contention that privilege had been waived by the reference in the letter of 25 November 2011 to the solicitors' instructions was ill-founded. ********** 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: 15 October 2013