Bangladesh Islamic Centre of NSW Inc v Elzamtar

1. [1]

   BASTEN JA: I agree with Macfarlan JA.

2. [2]

   MACFARLAN JA: The respondent is a builder by trade and a longstanding member of the congregation of a mosque operated by the appellant. In proceedings commenced in the District Court but subsequently transferred to the Equity Division of the Supreme Court because of the presence in them of equitable issues, the respondent sued for the repayment of certain loans that he had allegedly made to the appellant and for reimbursement of costs he had allegedly incurred at the request of the appellant in relation to the renovation of the mosque.

3. [3]

   Following delivery of a judgment on 31 August 2020 ([2020] NSWSC 1161), Parker J directed the entry of judgment in favour of the respondent in the sum of $314,055, reflecting the respondent’s partial success on both of his claims.

4. [4]

   In its Amended Notice of Appeal (leave for the filing of which is granted) the appellant challenges that part of his Honour’s judgment concerned with the reimbursement of expenditure. It does so on three grounds, only one of which is now pressed. That ground is in the following terms:

5. [5]

   In its Amended Notice of Motion the appellant seeks leave to adduce and rely on one further affidavit in addition to the above list, an “affidavit of Samir Karnib sworn on 19 July 2021”. At the hearing in this Court the appellant indicated that it no longer relied on Mr Safwan’s affidavit.

6. [6]

   For the reasons that appear below, the Court should decline to receive that additional evidence and the appeal should be dismissed with costs.

The pleadings in the Court below

1. [7]

   The respondent’s Statement of Claim filed in the District Court on 25 July 2014 (“SOC”) was superseded by an Amended Statement of Claim filed on 31 May 2018 (the “ASOC”). As the ASOC introduced claims for equitable relief, the case was transferred to the Equity Division of the Supreme Court of New South Wales. The ASOC first claimed the repayment of certain loans made by the respondent to the appellant. That claim is not in issue on appeal.

2. [8]

   The ASOC then alleged that “in or around 2003” the appellant retained the respondent to “manage and coordinate” certain renovations to the mosque, and to incur the costs of these works on behalf of the appellant. It then alleged that the appellant agreed that the costs of materials and labour, and the like, paid by the respondent would be reimbursed to him by the appellant. The respondent sought relief in the ASOC on a number of bases, including debt, equitable compensation and “a declaration of a constructive trust/or equitable charge equivalent to the detriment suffered”. The ASOC annexed a three-page schedule of expenses incurred, totalling $232,219.65, of which the respondent acknowledged that $43,438 had already been reimbursed to him (the “ASOC Schedule”). The expenses were described as having been incurred between 19 February 2003 and 5 November 2007.

3. [9]

   In its Defence, the appellant admitted that there had been an arrangement similar to that alleged by the respondent. It did not however admit the quantum of the expenses allegedly incurred and said that it put the respondent to “strict proof” of them.

4. [10]

   The Defence also alleged that the respondent’s claim was statute-barred, as the expenses had been incurred, if at all, more than six years prior to the commencement of proceedings.

5. [11]

   The ASOC was superseded by a Further Amended Statement of Claim filed on 29 May 2020 (“FASOC”) which did not change the substance of the claim so far as presently relevant. No further Defence was filed but the Defence to the ASOC appears to have been treated as applicable to the FASOC.

The respondent’s evidence

1. [12]

   In opening the case at first instance on behalf of the respondent, Mr Ahmad of counsel referred to the terms of an affidavit of the respondent which he subsequently formally read. That affidavit exhibited a bundle of documents (the “Documents Bundle”) relevant to the expenses that the respondent alleged he had incurred, although only a limited number of these (totalling $2,494) were receipts as distinct from invoices or other documents. The affidavit continued:

2. [13]

   The schedule which he annexed (the “Expenditure List”) was different from the ASOC Schedule (see [8] above). It was headed: “All work completed from 2003-2009 is authorised by Abdul Mumim Bhuiyan (project manager\president) and Fakhr Eldin Shudry (president)”. It listed categories of building materials and labour-related expenses over two pages without giving details of them. The total of the categories was stated to be $216,090.

3. [14]

   The following statement then appeared in the Expenditure List:

4. [15]

   The Expenditure List was signed or initialled on both pages, seemingly by Mr Bhuiyan and Mr Shudry.

5. [16]

   In cross-examination the respondent gave the following further evidence concerning the Expenditure List:

6. [17]

   No further witnesses were called by either party.

The hearing before Parker J

1. [18]

   In the course of his opening, Mr A Ahmad indicated that his client wished to rely on the Expenditure List as a confirmation for the purposes of s 54 of the Limitation Act 1969 (NSW). Parker J indicated that that was a matter capable of taking the appellant by surprise and that it ought to have been pleaded. Mr Ahmad accepted this and soon after indicated that he would be seeking to file a reply relying on the signatures on behalf of the appellant which appeared on the Expenditure List.

2. [19]

   Counsel for the appellant, Mr I Chatterjee, opposed the grant of leave to file a reply, initially, on the basis that it would give rise to “factual issues that would’ve required a response from the defendant”. The following interchange then occurred:

3. [20]

   His Honour indicated that he would permit the reply to be filed, stating:

4. [21]

   The appellant did not at that time or subsequently seek an adjournment to consider whether any further evidence should be called.

The judgment at first instance

1. [22]

   The primary judge referred at the outset of his judgment to the appellant’s defence that the reimbursement of expenditure claim was statute-barred and to the respondent’s response that that defence was defeated by the respondent’s entitlement to equitable relief. His Honour then referred to the respondent’s further answer contained in his Reply, which relied on the Expenditure List as a confirmation under s 54 of the Limitation Act. His Honour noted that the application for leave to file the Reply had been opposed but that he had “granted it because I considered that it did not raise any factual issues not already raised by Mr Elzamtar’s statement of claim”. His Honour further noted that the respondent was the only witness called to give evidence at the hearing and that he was unable to speak or write fluently in English, with the result that he gave evidence through an interpreter.

2. [23]

   His Honour stated that the respondent was taken in cross-examination to only five invoices (four of which were in the Documents Bundle and one which was separately annexed to the respondent’s affidavit) and noted that there were a number of “curiosities” about those five invoices, not all of which were the subject of cross-examination.

3. [24]

   His Honour then referred to the respondent’s affidavit evidence concerning the Expenditure List and stated that “there was no dispute about the validity of the signatures” on the document, counsel for the appellant not having cross-examined in relation to that document at all. His Honour noted that one of the signatories, Mr Shudry, was present in court during the respondent’s evidence but had not been called to give evidence.

4. [25]

   His Honour then referred to the way in which the respondent sought to rely upon the Expenditure List as follows:

5. [26]

   His Honour then considered the invoices and other such documents said to support the respondent’s claim but found that “standing alone”, they were “not very persuasive” and that, as well, he did not consider the respondent to be “a particularly reliable witness on issues of detail or chronology”. His Honour concluded as follows:

6. [27]

   His Honour also found that the Expenditure List operated as a confirmation or acknowledgment which meant that the time during which the limitation period had run before the date of confirmation did not count in the reckoning of the limitation period for the cause of action (this not including any action in which the limitation period had already expired); resulting in the respondent’s claim in the main not being statute-barred. From the amount of $216,090 in the Expenditure List, his Honour deducted $43,438 for payments already made by the appellant to the respondent, giving a net recovery for the respondent of $172,652. No allowance was made in respect of some of the debts which had become statute-barred as the payments were treated as repaying them, they being the oldest debts.

The application to adduce further evidence on appeal

1. [28]

   As indicated earlier, this application and the consequences that are said to flow from it are the only bases upon which the judgment at first instance is challenged. The following three affidavits are sought to be read on appeal.

2. [29]

   Mr Hadid attaches what purports to be an invoice directed to the appellant from someone with Mr Hadid’s first name and mobile telephone number for the supply of an “All new Microphone and speaker system” to the appellant’s mosque for $14,000. It says that payment of the invoice was made by the respondent. The invoice is dated 24 August 2008 although Mr Hadid refers to it as dated 11 August 2008. He denies any knowledge of it or of the respondent, saying that at the date of the invoice he was a taxi driver and did not supply anything to the appellant.

3. [30]

   There is a similar, although not identical, invoice dated 11 August 2007 included in the Documents Bundle. As well, the ASOC Schedule includes an item dated 25 June 2014 for $11,600 said to relate to “Abu Abdullah” and to “Various sound equipment”, in addition to an item dated 15 September 2014 referable to the same person for $3,750 for “Microphones”.

4. [31]

   The primary judge noted that there was another copy of the invoice, this dated 24 August 2008, separately annexed to the respondent’s affidavit. His Honour found the respondent’s evidence concerning the two invoices “confusing at best”, saying that there was no evidence to suggest that a second system was ever purchased and that because only the 2007 invoice was in the respondent’s pleaded claim, the cross-examination on this topic “ultimately only went to his general reliability and credit”. The Expenditure List contains an amount of $14,000 for “All new microphone and speaker system” but neither the date of supply nor the name of the supplier is given (as is the case with all items in that list).

5. [32]

   Mr Chehab is a director of Australian Timbers (NSW) Pty Ltd. He says that he was shown, first, an invoice of 19 November 2006 for $4,800 and, secondly, a delivery docket numbered 7101 stating a price of $6,000 and purporting to have been generated by his company on 15 April 2005. He says that he checked the company books and ascertained that “my company has never charged or received any monies in relation to the said invoice and said delivery docket”. He continues:

6. [33]

   Whilst included in the Documents Bundle exhibited to the respondent’s affidavit, neither the invoice nor the delivery docket, disputed by Mr Chehab, are reflected in any specific entry in the Expenditure List, the entries in that list simply being of categories of expenditure and amounts. There are two items in the Expenditure List (totalling $31,000) which conceivably could have embraced supplies by Australian Timbers (NSW) Pty Ltd. There was no cross-examination of the respondent about either the invoice or the delivery docket.

7. [34]

   Mr Karnib is a solicitor employed by the appellant’s solicitors. He says that he received a call on 24 June 2021 from Dr Rashid Rasheed, a representative of the appellant, who “raised concerns as to the legitimacy” of two invoices from Hanson Construction Materials Pty Ltd (“Hanson”) forming part of the respondent’s exhibit to his affidavit (the Documents Bundle). Mr Karnib annexes the two contested Documents Bundle invoices (the “DB invoices”) and two “original tax invoices” produced by Hanson (the “Hanson invoices”).

8. [35]

   The first DB invoice he annexes has a delivery number 42558815 which is the same as the document number on the first Hanson invoice (also annexed). The formatting of the two documents is different but there are some similarities between them. The first DB invoice states in handwriting a total price of $2,339.20 for 13.6m³ of concrete whereas the first Hanson invoice states a price of $582.12 for 3.60m³. The delivery dates are the same on each document, as are the names of the customer to whom the invoices are directed (“Triple V Concrete Pty Ltd”). The addresses of that customer are different but that may be because one address may be the customer’s office and the other may be the site of work being done by the customer. The words “Concrete Returned” appear on the first DB invoice but not on the first Hanson invoice. That statement appears from the terms of the invoice not to be an assertion that concrete was returned in relation to the subject transaction but a statement that if concrete was returned, disposal fees would apply.

9. [36]

   The second Hanson invoice has the same delivery or document number as the second DB invoice. The second DB invoice records in what may be printing an order of 5.4m³ of concrete but in handwriting a figure of 32m³ with a price of $5,280. The second Hanson invoice states a quantity of 5.40 m³ and a price of $870.98.

10. [37]

    There are two items in the Expenditure List referring to concrete but, as with all other items in that document, no details of the dates of supply or names of supplier are given.

Principles concerning further evidence on appeal

1. [38]

   This Court’s power to receive further evidence on appeal is stated in s 75A of the Supreme Court Act 1970 (NSW) as follows:

2. [39]

   For many years regard has been had in considering whether to exercise this power to the statement of Clarke JA (with whom Sheller JA agreed) in Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 as follows:

3. [40]

   In Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 this Court considered Clarke JA’s observations and Bell P (with Bathurst CJ and Basten JA agreeing) at [174] made the following further observations about the Court’s power to admit further evidence under s 75A(7) and (8):

DISPOSITION OF THE APPEAL

1. [41]

   Whilst acknowledging the above quoted observations of Bell P in Searle, it is nevertheless convenient to consider the appellant’s application to adduce further evidence on appeal, first and principally, by reference to Clarke JA’s criteria in Akins.

Whether the evidence could have been obtained with reasonable diligence for use at the trial

1. [42]

   Nothing in the three affidavits sought to be read suggests that the evidence in them would not have been obtainable by the appellant through the exercise of reasonable diligence prior to the hearing before Parker J in June 2020. The affidavits refer to and annex documents dating back twelve years or more in time, without suggesting that either the documents or the evidence about them was not available many years prior to 2020.

2. [43]

   The appellant raises two matters in an attempt to persuade the Court that Clarke JA’s first criterion should nevertheless be regarded as satisfied or should be disregarded.

3. [44]

   First, the appellant contends that it was taken by surprise by the primary judge’s grant of leave for the respondent to file the Reply in which the respondent relied upon the Expenditure List as a confirmation for the purposes of the Limitation Act. It says that “the amended claim by the plaintiff outflanked the defence without allowing the defence to reconsider what evidence it would call upon to respond to the new limb of attack”.

4. [45]

   The first answer to this is to point out, as the primary judge did when considering the application for leave to file the Reply, that such factual issues as the Reply might give rise to were already present in the proceedings. This was so because by the ASOC (and the FASOC) the respondent alleged that he incurred expenses of a type that entitled him to require the appellant to reimburse him and by its Defence the appellant did not admit that the respondent incurred those expenses (totalling $232,219.65) and put the plaintiff to “a strict proof” of them.

5. [46]

   When the respondent’s affidavit was read, and he gave oral evidence, there was thus a subsisting factual issue as to whether the respondent had incurred the alleged expenses. By his affidavit the respondent proffered evidence on that issue, in particular some testimonial evidence, the Document Bundle and the Expenditure List. Counsel for the appellant cross-examined the respondent, including about some of the invoices in the Documents Bundle.

6. [47]

   The primary judge did not find most of the respondent’s testimonial evidence or the Documents Bundle persuasive but did find that the Expenditure List and the evidence concerning it proved the respondent’s claim to the extent of the amount of $216,090 shown in the list. There is no reason to think that as a result of the filing of the Reply the hearing took any different course in relation to factual questions than it would otherwise have taken. The appellant was not prejudiced by its filing as it did not give rise to any factual issue that was not already present in the proceedings. Its filing therefore does not provide an excuse for the appellant not to have sought prior to the hearing to obtain evidence, such as the three affidavits it now seeks to rely on, to undermine the respondent’s claim for reimbursement.

7. [48]

   The second answer to the appellant’s argument is that it cannot now complain that the filing of the Reply in the course of the hearing deprived it of an opportunity to seek to obtain evidence to defeat the respondent’s claim when it was open to the appellant to raise prejudice of this type with the primary judge in opposition to a grant of leave to file the Reply, but it did not do so. Moreover, the appellant did not seek the opportunity to do so or, apparently, make any enquiries to obtain evidence to defeat the respondent’s expenditure claim in the two months that ensued before the primary judgment was delivered. Discovery of weighty material in that period would have provided a firm basis for an application to reopen and to vary a pre-hearing order precluding the appellant filing further evidence.

8. [49]

   The second matter relied on by the appellant in this context is the contention that the three affidavits which it seeks to read demonstrate that the respondent conducted a “false case” at first instance. Presumably the relevance of this to Clarke JA’s first criterion is that the appellant asserts that its new evidence is of such strength and seriousness that the first criterion should be put to one side in the circumstances of this case. For reasons that I give below in connection with Clarke JA’s second criterion the proposed new evidence is not of that strength and is not therefore a justification for disregarding Clarke JA’s first criterion in the circumstances of this case.

Whether there is a high degree of probability that the result below would have been different

1. [50]

   For a number of reasons, even if the Court concluded that the additional evidence indicated that as a matter of probability some of the invoices in the Documents Bundle did not evidence expenses that the respondent incurred, it cannot be further concluded that there is any significant prospect that the outcome at first instance would have been different if that evidence had been led at the hearing.

2. [51]

   First, the five invoices the subject of the three affidavits represent only a small proportion of the amount claimed in the FASOC ($32,419.20 out of $232,219.65 in the ASOC Schedule). Moreover, the primary judge ordered reimbursement of only a part of that claim ($172,652 against $232,219.65). As well, the evidence does not reveal whether the amounts of the five invoices formed part of the former sum or were simply in that part of the larger sum that was not awarded.

3. [52]

   Secondly, the basis upon which the primary judge made his decision must be kept in mind. His Honour did not take the ASOC Schedule and determine whether or not expenses listed in it were proved by documents in the Documents Bundle. He concluded the respondent’s case could not be made out in that way. Instead he concluded that because it was signed on behalf of the appellant the Expenditure List constituted an admission that the expenditures listed in it were incurred and were liable to be reimbursed. As earlier noted, the Expenditure List did not contain a detailed list of expenditures by date and supplier but gave figures in respect of categories. Whether the five invoices the subject of the appellant’s affidavits fell within any of those categories is not answered by the evidence. This is emphasised by the primary judge’s conclusion that the agreement reflected in the Expenditure List arose out of “some sort of review process which resulted in some items being accepted and others rejected” (see [26] above). In these circumstances, the impact of the further evidence, which the appellant contends effectively falsified the five invoices, is purely speculative.

4. [53]

   Thirdly, the prospect of the three affidavits having had any impact on the outcome at first instance if relied on there is further diminished when the content of the affidavits is considered. First, Mr Hadid’s affidavit raises a question as to the accuracy and reliability of the invoice for the “All new Microphone and speaker system” in the Documents Bundle but the position it presents is by no means clear because his evidence is given by reference to an annexed invoice dated 24 August 2008 which is not the date of that in the Documents Bundle (that being dated 11 August 2007) and in any event Mr Hadid refers in the body of his affidavit to an invoice of yet another date, 11 August 2008.

5. [54]

   More fundamentally, it is difficult to regard this evidence as impugning the reference in the Expenditure List to a new microphone and speakers system costing $14,000. It is unlikely that the appellant’s project manager and president, both of whom signed the Expenditure List, would not have been aware that (i) no new speaker system had been installed, or that (ii) a new speaker system had been donated, if either had been the case. Certainly neither of these people, nor anyone else, was called by the appellant to say that either was the position.

6. [55]

   Mr Chebab’s affidavit raises a question concerning the invoice and delivery docket issued by Australian Timbers in the Documents Bundle but that would only be the starting place of an inquiry about what the actual deliveries and costs were.

7. [56]

   Mr Karnib’s affidavit does not provide any direct evidence concerning what occurred as to the supply of concrete for the purposes of the mosque renovation and again is at best only the starting point for an inquiry about what happened on that topic.

8. [57]

   In these circumstances, far from demonstrating that there is a “high degree of probability” that, if the three affidavits were available at first instance, the outcome there would have been different, the possibility of a different result remains in the realm of conjecture, with the strong probability being that the affidavits themselves would not have made any difference. It follows that the appellant’s contention that the three affidavits demonstrate that the respondent conducted a “false case” at first instance must be rejected. The evidence did no more than raise questions about five items of expenditure which may or may not have been embraced within the amount that the primary judge found was to be reimbursed. The evidence fell far short of establishing the proposition the appellant proffered by reference to McCann v Parsons (1954) 93 CLR 418; [1954] HCA 70 at 426 that the respondent “put forward a false case and knew it”. If that proposition had been made good, the appellant’s absence of due diligence to discover the fraud may have been of little, if any, significance (see generally Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165; [2018] HCA 12 at [2]).

Whether the evidence is credible

1. [58]

   The important question for present purposes is what does the evidence on its face establish. Whether the evidence would prove “credible” if the issues it raised were investigated cannot be known. There is not however at this stage any basis for a positive conclusion that the evidence in the affidavits is credible and should be accepted.

CONCLUSION

1. [59]

   For the reasons given above, none of the three criteria stated by Clarke JA in Akins v National Bank has been established. Whilst what his Honour said did not amount to a “test” to be applied irrespective of the circumstances of particular cases, his observations remain a valuable guide to the exercise of the Court’s discretion to admit further evidence on appeal. As the evidence sought to be relied upon here was not of matters occurring after the hearing at first instance, s 75A(8) required “special grounds” to be shown. The appellant has not done this and, as its appeal is dependent upon admission of the further evidence, the appeal should be dismissed with costs.

2. [60]

   PAYNE JA: I have had the benefit of reading the decision of Macfarlan JA in draft. I agree with his Honour that the further evidence sought to be adduced by the appellant should be rejected. Paying full regard to the possible breadth of the circumstances in which further evidence on appeal may be adduced which was explained by Bell P in Searle, with which I respectfully agree, no special grounds within the meaning of ss 75A(8) of the Supreme Court Act warranting admission of that evidence have been shown. I agree with the orders proposed by Macfarlan JA.