Supreme Court New South Wales Medium Neutral Citation: Khan v Khan; Islamic Association Western Suburbs Sydney Inc [2015] NSWSC 1993 Hearing dates: 14 April 2015 Decision date: 14 April 2015 Jurisdiction: Equity - Corporations List Before: Black J Decision: Exclude paragraphs 13-17 of the affidavit, and allow the balance of the affidavit to be read, subject to the specific objections as to admissibility. Catchwords: PROCEDURE – application for leave to rely on affidavit evidence – where affidavit served after the date for filing evidence in chief – whether affidavit evidence will cause prejudice to the Defendants – whether to allow the affidavit evidence to be read. Legislation Cited: - Civil Procedure Act 2005 (NSW) ss 56, 57, 58, 61(3) - Evidence Act 1995 (NSW) s 135 - Uniform Civil Procedure Rules 2005 (NSW) r 10.2 Cases Cited: - Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 Category: Procedural and other rulings Parties: Aijaz Ahmed Khan (First Plaintiff) Masud Akbar Cheema (Second Plaintiff) Nasib Mohammed (Third Plaintiff) Mohammad Yousuf (Fourth Plaintiff) Mohammed Sohaib Malak (Fifth Plaintiff) Shahab Uddin Siddiqui (Sixth Plaintiff) Mukhtar Qazi (Seventh Plaintiff) Shahzad Khan (First Defendant) Sohail Shamim (Second Defendant) Rafay Siddique (Third Defendant) Sammih Khan (Fourth Defendant) Zulfiqar Ali (Fifth Defendant) Mahmood Khan (Sixth Defendant) Nizam Ali (Seventh Defendant) Islamic Association Western Suburbs Sydney Inc (Eighth Defendant) Representation: Counsel: A P Cheshire (Plaintiffs) D A Smallbone (First to Seventh Defendants) Solicitors: Low Doherty & Stratford (Plaintiffs) Denison Toyer (First to Seventh Defendants) File Number(s): 2014/71246 Judgment – EX TEMPORE 1. A difficult issue arises in these proceedings in respect of the reading of an affidavit of Mr Aijaz Khan dated 30 March 2015. The matter has been the subject of extensive submissions by counsel and I will not seek to repeat those submissions in full in delivering this interlocutory judgment as to the admissibility of that affidavit. 2. The Plaintiffs seek to read Mr Khan's affidavit dated, as I have noted, 30 March 2015. Mr Smallbone, who appears for the Defendants, Mr Shahzad Kahn and others, objects to the affidavit being read in its entirety. Objections are also made to specific paragraphs of the affidavit. I will at this point deal only with the objection to the affidavit being read in its entirety or, in another version of that objection which arises from the manner in which submissions were put by both parties, to two particular parts of that affidavit being read. 3. By way of background, these are relatively complex proceedings with a significant number of issues, relatively complex pleadings, and extensive affidavit evidence. The Plaintiffs seek to read twelve affidavits, including Mr Aijaz Khan's affidavit dated 30 March 2015. The Defendants seek to read approximately fifty affidavits. All this is hoped to occur in a trial which has been allocated for five days, in accordance with the parties' estimate of the length that the trial would take. The proceedings have at least a degree of urgency, although there have been long delays in their preparation for hearing, since interlocutory relief is presently in place and there is a significant risk that the proceedings will become moot if they are not determined promptly. That arises because they turn upon the validity of a meeting that purported to remove certain persons from office, in circumstances that the term of office of those persons would expire late this year, and those persons have been permitted, in effect, to continue in office with limitations by reasons of interlocutory orders made previously in the proceedings by Darke J. 4. On 18 November 2014, I made orders seeking to achieve an orderly preparation of the matter for hearing, including requiring the Plaintiffs to provide certain particulars by 3 November 2014 and to serve any further evidence by 16 December 2014 and the Defendants to serve further evidence by 3 February 2015, with the Plaintiffs then to serve any evidence in reply by 17 February 2015. 5. It appears that both parties may have served evidence after that date, although I am only presently required to determine the position in respect of Mr Khan's affidavit. The principles which I will apply in dealing with Mr Khan's affidavit would, of course, similarly have application in respect of any late evidence served by the Defendants, to the extent that there may be prejudice to the Plaintiffs either by specific matters raised in that evidence, or by the lateness of service, so far as it may impact on the orderly conduct of the proceedings. Mr Cheshire takes some pains to emphasise that he has not objected to late evidence by the Defendants, and I accept that that is often a constructive and appropriate course. However, it remains that a first party's lack of objection to a second party's evidence does not become a licence for the first party to read late evidence where there is real prejudice to the second party, if that second party raises an objection by reference to that prejudice. That principle is available to the Plaintiffs just as it is available to the Defendants. 6. I should deal with the particular issues raised by Mr Khan's affidavit, although I will not deal with them in the order in which they emerge in the affidavit, because one particular issue raises matters of greater difficulty, as to which I should consider the relevant principles, before returning to the other issues which potentially raise less difficulty. 7. It will be immediately noted that Mr Khan's affidavit was served some four months after the date for filing of evidence-in-chief, and it seems to me that it is part of the Plaintiffs' evidence-in-chief, at least in part, so far as it seeks to establish that certain members of the Association were not entitled to vote, and accordingly could not be counted in establishing the validity of the resolution which is challenged by the Plaintiffs. The affidavit was served after the Defendants' evidence had been filed and beyond the point at which the Plaintiffs' evidence in reply was served, and some two weeks before the commencement of the hearing. 8. I accept, as Mr Cheshire points out, that it is by no means unknown for evidence to be served late. Sometimes that will cause difficulty and sometimes it will not. That proposition, however, does not seem to me to be a complete answer to any prejudice which arises from this particular affidavit. 9. I will focus first upon the second part of the affidavit, in paragraphs 13–17. That part of the affidavit relates to a dispute as to the terms of cl 6(1)(d) of the Association's constitution, which plainly has an ambiguity as to whether members of the Association lose their membership upon defaulting in payment of membership fees for five or for three consecutive years. That ambiguity is likely to be relevant to the determination of these proceedings, since it will determine how many members are excluded from voting by reason of being non-financial for the requisite period. 10. Mr Khan's evidence is that he has obtained from the minute book of the Association a copy of handwritten minutes for a meeting on 7 May 2009, and further handwritten minutes for a meeting on 9 August 2009, in each case together with proposed amendments to the constitution that are stapled alongside of them. He identifies the first handwritten minutes as in the handwriting of Mr Zaheer Khan, and the second as in the handwritten of Mr Masud Cheema. 11. Mr Smallbone contends that, in particular, this evidence causes prejudice to the Defendants, and it is necessary to say something further as to the circumstances in which it arose. Mr Smallbone points out that the Defendants had sought particulars as to the Plaintiffs' case as to this issue, and the Court had ordered that such particulars be provided. The Plaintiffs had responded, unhelpfully, that their case in this respect would be articulated in the evidence. Mr Smallbone points out that that case was not articulated, at least so far as the minutes now relied upon, in the evidence served in accordance with the Court's directions, and the minute book on which Mr Khan's affidavit relies was also not produced in accordance with orders for production of documents previously made by the Court. That position is confirmed by an affidavit of Mr Shamim dated 2 April 2015, on which the Defendants rely, which refers to an inspection of documents, pursuant to the Court's orders, at which the minute book was not made available. There is ultimately no dispute as to that matter, since Mr Cheshire fairly accepted that, first, the particulars had not identified reliance on the minute book and, second, that there was no contention that the minute book had previously been produced. 12. The Plaintiffs rely on the affidavit of Mr Masud Cheema in order to explain the delay in production of the minute book. Mr Cheema's evidence is that he is the Second Plaintiff, a vice president of the Association, and that he was also a defendant in earlier proceedings in this Court, in which the minute book of the Association for the period from 2008 to 2010 had been produced. He gives evidence that, in early March 2015, his solicitor asked him to look for any documents or records of the Association that may concern amendments to the constitution of the Association, that is, about a month ago. He says that he looked through a bundle of papers held at his home, which was the paperwork left with him from the earlier proceedings, and located the minute book for the period from 2008 to 2010 and provided the minute book to his solicitor. His evidence is that he had not remembered that the minute book was left with him at the conclusion of the earlier proceedings. 13. It should be noted that there are some gaps in Mr Cheema's evidence. First, there is no explanation of what inquiries, if any, had been made by his solicitor prior to early March 2015 or what searches had been made by Mr Cheema for production of the minute book prior to early March 2015. That omission is striking, where the Court had made specific orders for production of relevant documents at an earlier time, as to which it is plain that the minute book would have been relevant, and pursuant to which it had not been produced. Second, Mr Cheema's evidence is not precise in dating the relevant events. He indicates that he was asked to look for the relevant documents in early March 2015 but does not specifically say when he did so or when he provided them to his solicitor. Mr Cheema's evidence leaves unclear when the documents came, first, to Mr Cheema's knowledge, and to his solicitor's knowledge, and whether that occurred at some time in March 2015 prior to the service of Mr Khan's affidavit at the end of March 2015. That seems to me to be a matter of some significance, because the issues which have now arisen could have been mitigated, at least in part, if the minute book had been made available to the Defendants, where it was plainly relevant to the case, as soon as it was located by Mr Cheema, and not only when extracts from it were provided in Mr Khan's affidavit. 14. The Defendants have led some evidence in response to Mr Aijaz Khan's affidavit, and to some extent they have been able to address that evidence, subject to two difficulties to which Mr Smallbone refers, to which I will return. The Defendants have led an affidavit of Mr Sami dated 7 April 2015 and a further affidavit of Mr Zaheer Khan dated 8 April 2015. It is plain from those affidavits that, first, there is a factual question as to what occurred at the relevant meetings, to which Mr Aijaz Khan refers in his affidavit, which is hotly contested. Secondly, and more importantly for present purposes, there is a dispute as to the authenticity of the minutes which are attached to Mr Khan's affidavit, because evidence is given which raises, directly, the possibility that documents previously contained in the minute book have been substituted by the documents now contained in it. It is not appropriate to, and I do not, express any view as to the merits of that contention which are not relevant to the determination which I have to make, not having heard oral evidence of any of the relevant witnesses at this point. 15. The first difficulty which arises, however, to which Mr Smallbone refers, is that Mr Zaheer Khan's evidence is that, before he prepared his affidavit in response to Mr Aijaz Khan's affidavit of 30 March, which is dated 8 April 2015, he had made plans to travel overseas and booked that trip on 20 March 2015, that is, some days before Mr Aijaz Khan's affidavit was served. Mr Zaheer Khan's itinerary is in evidence and it confirms, as he indicates in his evidence, that he does not return to Sydney until 22 May 2015, nearly a month after the last allocated hearing day in these proceedings. Mr Cheshire in turn makes clear that he seeks to cross examine Mr Zaheer Khan as to the subject matter of his evidence, and that is not surprising, given the issues as to the authenticity of the minutes on which the Plaintiffs rely raised by Mr Zaheer Khan. 16. However, that creates an acute difficulty. This matter has, as I have noted, been allocated for hearing over five days. Those hearing dates have been allocated since November 2014, when directions were made, as I have noted, for its conduct. Mr Zaheer Khan will not return from overseas so as to be made available for cross examination until a month after the hearing is presently due to complete. Court dates are scarce over that period but the Court could potentially allocate another date, by vacating a hearing of another litigant's case, or allocating that hearing to a judge other than myself. That is a course which would be taken, if the circumstances warranted it, and if there were no other difficulties of the kind to which I will refer below. However, the difficulties which arise from the late production of the minute book and the late service of Mr Aijaz Khan's affidavit do not end there. 17. The next difficulty is that, if the Court were to take that course, that is to allocate a further day for a hearing, after 22 May 2015 when Mr Zaheer Khan returns, that would delay the determination of the proceedings by at least three weeks, assuming that a date could be allocated immediately after his return. Mr Cheshire raises the possibility that cross examination of Mr Khan could take place in a Monday Corporations directions list, but that could only occur if one could be confident that that cross examination would be confined in length, and would even then deprive other parties of the opportunity to have their matters heard in that list. 18. I would, if I could, seek to explore the availability of alternative dates. However, a third difficulty then arises. Mr Smallbone points out that, given the issues raised as to the authenticity of the material in the minute book referred to in Mr Khan's affidavit, the Plaintiffs seek to lead forensic evidence, and it was not possible to lead such evidence within the short time since that affidavit has been served. I accept that that is no more than a statement from the bar table, but it is a plausible statement, and it does not seem to me that it is open to the Plaintiffs, having put the Defendants in this position by late production of the minute book and late service of the affidavit, to then complain that they should have responded to it by seeking to lead forensic evidence more quickly than they consider they could achieve. 19. It seems to me that, in all the circumstances, for these reasons, there is real prejudice to the Defendants by the leading of this aspect of Mr Aijaz Khan's affidavit at this late stage. Indeed, at every point at which that prejudice could have been avoided or mitigated, it was not. It could have been avoided or mitigated by producing the minute book when it was first required to be produced pursuant to the Court's orders for production of documents, and it was not. It could have been avoided or mitigated by providing clear particulars of the Plaintiffs' case so that the Defendants were on notice, if not of reliance of the minute book, at least of the structure of that case. It was not, because the particulars which were provided did not provide any real indication of the case that was to be put. It could have been avoided by leading Mr Khan's evidence promptly, within the directions made by the Court, but it was not. It could have been avoided, finally, by producing the minute book, promptly, after it was located by Mr Cheema, but it is far from clear from the evidence to which I have referred that even that occurred. In these circumstances, I am satisfied that the just, quick and cheap resolution of the matters in the proceedings does not require that the Plaintiffs be permitted to lead this aspect of this evidence at this point, given the prejudice to which it will expose the Defendants. 20. I should say something further about the relevant principles in that regard. Section 61(3)(e) of the Civil Procedure Act 2005 (NSW), to which I drew Mr Cheshire's attention, provides that if a party to whom a direction has been given fails to comply with it, the Court may disallow or reject any evidence that party has adduced or sought to adduce. That provision is applicable, so far as directions were made for the filing of affidavit evidence-in-chief in these proceedings. Second, r 10.2 of the Uniform Civil Procedure Rules 2005 (NSW) provides that a party intending to use an affidavit that has not been filed must serve it a reasonable time before the occasion for using it arises, and a party who fails to serve an affidavit as required by that rule must not use it except with the Court's leave. Mr Cheshire submits that arguments could be put both ways as to whether the service of Mr Khan's affidavit was a reasonable time before the hearing. It does not seem to me that that requirement was satisfied, where that affidavit raises new material in the manner that I have noted, and given the other complexities of the preparation of these proceedings for hearing. In that situation, a positive grant of leave would be required for the Plaintiffs to rely on the affidavit, and it seems to me that the matters to which I have referred above provide no basis for such a grant. 21. I am conscious that the power under these provisions must be exercised having regard to the overriding purpose set out in s 56 of the Civil Procedure Act, namely to promote the just, quick and cheap resolution of the real issues in dispute in the proceedings. Mr Cheshire draws attention to the significance of justice in that regard, and I accept that there is potentially disadvantage to the Plaintiffs from the exclusion of such evidence, and a possibility that it may leave unresolved a debate as to whether the relevant provision in the Association's constitution refers to a three or five year period. The Court is required to give effect to the overriding purpose when it exercises any power given to it by the Act or by the Rules of Court. Section 58 requires the Court, in determining whether to make any order or direction, to act in accordance with the interests of justice, and the Court must have regard to the provisions of ss 56 and 57, and may have regard to specified matters. The Court of Appeal considered these provisions in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [36], where Allsop ACJ emphasised that these provisions must be interpreted with recognition to the need to exercise powers of case management to bring about timely justice, and notwithstanding that their exercise may have sharp and sometimes detrimental effects on the claims of the parties. 22. It seems to me that the just, quick and cheap resolution of the matters in dispute in the proceedings would not be promoted by permitting reliance on this aspect of Mr Khan's affidavit, so far as it involves, as I have noted, real prejudice to the Defendants, and a potential for delay in the proceedings, which is not in the interests of the parties, not consistent with the conduct of proceedings where interlocutory relief remains in place, and not consistent with the interests of the community, so far as the delays to which I have referred are sought to be met by disrupting arrangements already made for other hearings involving other litigants. 23. For these reasons, it seems to me that Mr Khan's affidavit, so far as it seeks to introduce new material in paragraphs 13–17 relating to changes to the constitution, should not be permitted. This is not, however, conclusive of the status of other aspects of Mr Khan's affidavit. Mr Cheshire points out, and I accept, that the provisions to which I have referred are not a blunt instrument to be applied, without regard to the extent of prejudice to the parties, or by simply excluding late evidence by reason of its lateness. It will be apparent that my reasoning above, in respect of paragraphs 13–17 of Mr Khan's affidavit does not proceed on such a basis. 24. So far as paragraphs 7–12 of Mr Khan's affidavit is concerned, he produces spreadsheets used at an annual general meeting it is said in 2010 and again in 2013 to record the financial status of members. Mr Smallbone again submits that the Defendants are prejudiced, so far as it appears these documents may not have previously been produced, and so far as the Defendants would wish to make inquiry as to their status. I should indicate that it is not immediately apparent to me what inquiry could have been made, since this is not a case where, by contrast with the minute book, there is an identified dispute as to the authenticity of the documents. There is, as Mr Cheshire points out, a significant amount of evidence already in the case, so far as both parties are concerned, as to the financial status of members. It is plain, so far as the Defendants lead evidence, that a number of persons have sought to establish that they were, or ought to have been treated as, financial at particular dates. 25. It again does not seem to me to be particularly satisfactory that these documents should emerge in Mr Khan's affidavit, at this late stage, without notice. However, doing the best which I can, balancing the relevant circumstances, it seems to me that the prejudice which the Defendants would suffer from the tender of these documents, is not such that the just, quick and cheap resolution of the proceedings require their exclusion. In particular, it does not seem to me that the lateness of the documents, when their narrow scope and the existence of other evidence is recognised, is such that justice requires their exclusion. To put it another way, it does not seem to me that the prejudice which would be suffered is such that it could not be addressed by case management, including potentially permitting the Defendants to lead further evidence in response within the period of the hearing if they seek to do so. 26. Paragraphs 18–26 of Mr Khan's affidavit contain further material, which again might well have been able to be led in chief, and its lateness is again undesirable. Having said that, Mr Smallbone did not suggest that the Defendants were prejudiced by that material, and it does not seem to me that it should be excluded for that reason. 27. Accordingly, in summary, I have concluded that paragraphs 13–17 of Mr Khan's affidavit dated 30 March 2015 should be excluded in their entirety, by reason of s 61(3) of the Civil Procedure Act, or alternatively on the basis that they would be unfairly prejudicial to the Defendants, for the purposes of s 135 of the Evidence Act 1995 (NSW), the unfair prejudice being late service and late production of the relevant documents, in circumstances where it would shut out the Defendants from making relevant inquiries. The balance of the affidavit may be read, subject to the specific objections as to its admissibility. ********** 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 January 2016