Jetobee Pty Ltd (in liquidation) v Smith & Young Pty Ltd (No 1) [2015] NSWSC 1521

Supreme Court New South Wales

Medium Neutral Citation: Jetobee Pty Ltd (in liquidation) v Smith & Young Pty Ltd (No 1) [2015] NSWSC 1521 Hearing dates: 7 and 8 October 2015 Date of orders: 07 October 2015 Decision date: 07 October 2015 Jurisdiction: Common Law Before: Beech-Jones J Decision: (1) Leave to rely on the affidavit of Josephine Aapa Smith refused.

(2) Leave to adduce further evidence from Leslie James Young allowed. Catchwords: PROCEDURE – application to rely on further evidence – previous guillotine order – explanation for delay – potential effect on hearing if evidence adduced – potential significance of evidence. Legislation Cited: Civil Procedure Act 2005 – s 56 Category: Procedural and other rulings Parties: Jetobee Pty Ltd (in liquidation) – Plaintiff Smith & Young Pty Ltd – Defendant Representation: Counsel: J. White, K. Josifoski – Plaintiff A. Macauley – Defendant

Solicitors: Gadens Lawyers – Plaintiff Buckingham Lawyers – Defendant File Number(s): 2015/067958

Judgment (revised from ex tempore) Application to read supplementary evidence – see transcript p 8 1. This matter has been listed for hearing today with an estimate of two days. The principal issue in the proceedings is whether the debt sued on by the plaintiff, said to be secured by a mortgage, was in effect satisfied by a director of the defendant effecting an agreement to debit his loan account to extinguish that debt. The plaintiff company is in liquidation and prior to its liquidation was controlled by that defendant. 2. The proceedings were commenced early this year. The pleadings were closed by April 2015. In my view it has been clear from a relatively early stage that not only did the plaintiff deny the agreement, it was contending that the agreement asserted by the director of the defendant was a concoction. 3. At the hearing of the matter the defendant sought the Court's leave to adduce some further oral evidence from the director of the defendant. The scope of that oral evidence has been reduced into written form and a copy was provided to counsel for the plaintiff just prior to the matter commencing. 4. The defendant also sought leave to rely upon an affidavit of a further witness, Josephine Aapa Smith, who is the de facto partner of the defendant's director and also a director of the defendant. In broad terms the effect of her affidavit is to recount various conversations with the director, that is Mr Young, over time which are said to be generally consistent with Mr Young's evidence that he effected the agreement I referred to earlier. 5. The adducing of this evidence is strongly opposed by the plaintiff. The plaintiff points to the procedural background. This relevantly commenced in May 2015 when the defendant was ordered to file and serve the affidavits on which it intended to rely by 12 June 2015. On 10 July 2015 that was extended until 31 July 2015. On 6 August 2015 the matter was allocated this hearing date and a so called "guillotine" order was made, namely an order that neither party was able to rely on evidence served outside of the orders without leave of the Court. 6. In September 2015 the defendants served an application to rely upon an earlier affidavit of Ms Smith. That matter came before the duty judge, Harrison J, on 28 September 2015. The application was ultimately dismissed, although his Honour noted that a number of the documents which were attached to that affidavit were, by reference to some agreement between the parties, able to be adduced. The content of that affidavit was not the same as the content of the affidavit the subject of this application. The application to extend had first come before the registrar on 25 September 2015 and the registrar's notes record the plaintiff being most anxious to ensure that the evidence was finalised prior to the hearing. 7. In support of the application for leave to rely upon this material an affidavit of the defendant's solicitor was read. He recounts that he commenced acting for the defendant on 30 June 2015. He recounts that between August 2015 and today he has briefed a number of counsel, some of whom have become unavailable. He records that on 1 October the senior counsel who was then briefed advised in conference that Ms Smith ought to prepare an affidavit dealing with the matters that are dealt with in the affidavit the subject of this application and that Mr Young ought to prepare a further affidavit as well. 8. While it might be said that the lateness of this application has been brought on by that advice, that observation needs to be placed in context. There is in effect no explanation as to whether any of the counsel who was briefed prior to then had turned their mind to this question, that is as to whether further affidavit material is required, especially from Ms Smith. Further, this is all to be considered in the context which I described at the outset, namely that from an early point it was apparent that it was being suggested that Mr Young had in effect concocted the agreement in question. 9. The overriding considerations to be considered in an application such as this are those set out in s 56 and following of the Civil Procedure Act 2005. In relation to Ms Smith's affidavit, counsel for the plaintiff submitted that had they been aware that in effect a corroborating witness would be called, then a number of further steps may have been undertaken. These steps include subpoenaing material, researching material concerning that witness' credit and potentially considering a cross claim in an attempt to set aside the alleged transaction as uncommercial. In relation to the latter matter, as I understand it, that recognises the possibility that a different approach may have been taken factually but with an attack mounted upon the legality of the asserted agreement. 10. The end result is that I accept that if Ms Smith's affidavit was to be allowed, then an adjournment would inevitably follow. While some aspects of the prejudice that would be occasioned by that result can be addressed by orders as to costs and so forth, the potential for wastage of significant resources still remains. I am conscious that Ms Smith's evidence may have potential significance, indeed great significance, to the defendant's case. However, given the numerous opportunities the defendant has had to put on material when it should have been obvious from the outset that corroborative material is potentially significant and given the potential effect on the hearing, I refuse leave to rely on Ms Smith's affidavit. 11. In relation to the supplementary evidence of Mr Young, counsel for the plaintiff frankly conceded that if that material was allowed to be adduced, then it would not occasion an adjournment. That would reflect my assessment, in that in my view as a matter of substance Mr Young is really fleshing out some of the details concerning the agreement he testifies to. The material he adduces is material that one would have expected may have emerged in cross-examination or re-examination in any event. Accordingly, I will grant the defendant leave to adduce the supplementary evidence of Leslie James Young.