Traderight (NSW) Pty Ltd (ACN 108 880 968) & Ors v Bank Of Queensland Limited (ACN 009 656 740) (No 12) and 15 related matters

EX TEMPORE Judgment

1. [1]

   Before me is an application by the Bank of Queensland (the Bank) to require Ms Chen to attend for cross-examination. Ms Chen is the wife of the second plaintiff, Mr Yun Xu, in the LJH Group proceedings and has filed an affidavit in those proceedings.

2. [2]

   Before dealing with the application itself, it is necessary to say something about the circumstances in which the application is made.

3. [3]

   These proceedings concern 10 groups of plaintiffs who have brought claims against the Bank arising out of franchise agreements that were entered into by the corporate plaintiffs of each group and the Bank, under which the corporate plaintiffs each operated a branch of the Bank in New South Wales as franchisee.

4. [4]

   LJH Group, the first plaintiff in the LJH Group proceedings, entered into an agreement on 10 March 2007 to operate a franchise at Hurstville. Mr Xu was one of two directors of the LJH Group.

5. [5]

   Ms Chen swore an affidavit in support of the plaintiffs' case. That affidavit is said to be relevant to the question of damages. Ms Chen gives evidence of the number of hours of unpaid work she did in connection with the Hurstville branch. She also gives some evidence of the stress her husband was under while LJH Group operated the Hurstville branch. The first type of evidence is relevant to a claim LJH Group makes for unpaid work undertaken by Ms Chen. The second type of evidence is said to be relevant to a claim for general damages made by Mr Xu.

6. [6]

   In accordance with what is normal practice in the division and this case, the plaintiffs in the LJH Group matter read all their evidence-in-chief and in reply and I dealt with all objections to that evidence before any of the witnesses were cross-examined. Consequently, at the beginning of LJH Group's case, the plaintiffs read Ms Chen's affidavit and I ruled on objections to it.

7. [7]

   Following that, Mr Xu was cross-examined. During the course of his cross-examination he gave evidence concerning a business he conducted which involved buying computer goods for cash and reselling them on eBay. Mr Xu has pleaded guilty to criminal charges in connection with that business, although the precise nature of his plea remains unclear. Mr Xu also gave evidence that he bought used postage stamps on eBay and used those stamps to post the computer goods he sold. I issued a number of certificates under s 128 of the Evidence Act 1995 (NSW) in respect of the evidence Mr Xu gave. Mr Xu also gave evidence in cross-examination concerning the extent to which his wife was involved in the business. It was following that evidence that the plaintiffs announced that they no longer proposed to call Ms Chen.

8. [8]

   The Bank submits that that course is not open to the plaintiffs because Ms Chen's affidavit has already been read. In support of that submission, they rely on a number of decisions, including In Re Quartz Hill Gold Mining Co. Ex Parte Young (1882) 21 Ch D 642, Bothranch Pty Ltd v Monitronix Ltd (1989) 15 ACLR 35 at 53 - 55 and Varma v Varma [2010] NSWSC 786, particularly at [337] - [343]. Mr Couper QC, who appeared for the Bank Parties, submits that those decisions establish the proposition that once a party has relied on an affidavit, that party must make the deponent available for cross-examination. Some of the earlier cases proceed on the basis that a party relies on an affidavit when it is filed. Mr Couper accepts that that is no longer the position. However, in his submission a party must be taken to have relied on an affidavit when the affidavit is read and the court rules on objections to it, as was the case, for example, in Varma.

9. [9]

   That submission does not sit easily with Uniform Civil Procedure Rule 2005 (NSW) (UCPR) r 35.2. That rule provides: (1) A party may, by written notice served on the party serving or proposing to use an affidavit, require the attendance for cross-examination of the person by whom the affidavit has been made. (2) Such notice is to be given a reasonable time before the time at which the person is required to attend for cross-examination. (3) If reasonable notice of such a requirement has been given in respect of an affidavit, and the deponent does not attend for examination, the affidavit may not be used unless the deponent is dead or unless the court orders otherwise. (4) If a person making an affidavit is cross-examined, the party using the affidavit may re-examine the person.

10. [10]

    In Mr Couper's submission, however, UCPR r 35.2 does not apply in the circumstances of this case. In his submission, that rule is concerned with a different question - namely, the giving of notice requiring a witness to attend for cross-examination. It cannot apply in this case because the affidavit has already been used.

11. [11]

    I do not accept that submission. In my opinion, sub-rule (3) applies in this case. Notice has been given for Ms Chen to attend for cross-examination and she has not attended. In my opinion, sub-rule (3) sets out the consequences of that non-attendance. It is difficult to see to what issue sub-rule (3) is addressed, if not to a situation in which a party indicates an intention to rely on an affidavit but then fails to produce the deponent for cross-examination.

12. [12]

    Two things should be observed about sub-rule (3). First, it speaks in terms of the affidavit being "used". It does not, for example, make the operation of the rule dependent on whether the affidavit has been filed or formally read. Second, the types of use with which the sub-rule is concerned are uses that are sought to be made of the affidavit after the deponent fails to attend for examination at the time expected. That follows from the structure of the sub-rule. The sub-rule contemplates a situation in which the deponent has failed to attend and then describes the consequences - namely, the inability to use the affidavit unless one of the exceptions identified in the sub-rule is satisfied. The most obvious use of an affidavit in this sense is to ask the court to have regard to its contents in determining the issues to which the affidavit is said to be relevant.

13. [13]

    On this interpretation, no significance attaches to the fact that an affidavit has been filed or, indeed, formally read. Rather, what UCPR r 35.2 says is that an affidavit cannot be used - that is, the court cannot have regard to it in determining the questions to which it is said to be relevant - unless the deponent has been made available for examination or one of the exceptions applies.

14. [14]

    This result seems to me to be consistent with the practice of the court. Nothing now turns on whether an affidavit has been filed. The practice of formally reading affidavits and dealing with objections at the beginning of a hearing is often adopted as an administrative convenience, rather than as an application of the rights of the parties in relation to the conduct of the trial. It would be unfortunate if that administrative convenience were to have a substantive effect on the rights and obligations of the parties so far as the calling of evidence was concerned.

15. [15]

    I appreciate that Ward J reached a different conclusion in Varma. However, it appears that her Honour's attention was not drawn to UCPR r 35.2. Had it been, her Honour may well have reached a different conclusion.

16. [16]

    In my opinion, the consequence of what has happened is that the plaintiffs cannot use the affidavit of Ms Chen in the proceedings. However, it is not a consequence of what has happened that Ms Chen should be required to attend for cross-examination.