Case: Jianshe Southern Pty Ltd v Get Motor Cycles Pty Ltd (formerly Turnbull Cooktown Pty Ltd) (No 3) [2007] FCA 1078
Outcome: cited
In my view, on the basis of the evidence before me and the submissions of the parties, there is reason to believe that the applicant is unable to pay the costs of the respondents if they are successful in their defence. I take this view for the following reasons: &#8226; As I noted earlier, there is no dispute that the costs of the respondents are as calculated by Mr Graham. &#8226; As I also noted earlier, there is no dispute as to the reason for the failure of the applicant to complete the relevant contracts, the low paid-up capital of the applicant, the failure of the applicant to date to meet the costs order of Siopis J, the substantial securities given to financial services providers over both real and personal property of the applicant, the absence of real property in Queensland, and the fact that what seems to be the primary assets of the applicant are held by the applicant on trust for an entity which appears to have no interest in this litigation. &#8226; No evidence has been produced by the applicant as to the value of assets, if any, held by the applicant in its own right or on trust for any entity which has an interest in this litigation, including the SDA Tarameo Unit Trust. &#8226; Even assuming that the Canning Road Development would be available to satisfy an order for security for costs, at present, there is no satisfactory evidence before the Court as to the value of that property. In my view, to accept the evidence in the "Executive Summary Valuation" annexed to Mr Hosgood's affidavit would unfairly prejudice the respondents. I uphold the objection of Mr Piggott as to the admissibility of both para 4 and annexure JOH-01 of Mr Hosgood's affidavit. In particular, I note: o As a general proposition, evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed: s 76(1) Evidence Act 1995 (Cth). An exception to the rule in s 76(1) is where a person has specialised knowledge based on the person's training, study or experience, in which case evidence of an opinion of that person that is wholly or substantially based on that knowledge is admissible: s 79 Evidence Act o In this case no evidence has been produced as to whether Hegney Property Valuations, or the person at that firm who prepared the "Executive Summary Valuation", possessed specialised knowledge within the meaning of s 79 Evidence Act so as to render admissible the "Executive Summary Valuation" and its contents. o Even if the "Executive Summary Valuation" was prepared by a person with specialised knowledge within the meaning of s 79 Evidence Act , the disclaimers in the document are such that not only is it clear that the document was not prepared with a view to it being relied on by the applicant in litigation, it appears that the author of the document specifically disqualified the document from such use. The Court has a general discretion to exclude evidence under s 135 Evidence Act where its probative value is substantially outweighed by the danger that it might be unfairly prejudicial to a party, or be misleading or confusing, or cause or result in undue waste of time. The fact that the "Executive Summary Valuation" is relied upon by the applicant as evidence, in circumstances where the person who prepared the report did not appear to appreciate that the document would be the subject of such use, in my view strongly militates in favour of its exclusion as evidence under s 135: cf Campbell J in United Rural Enterprises Pty Ltd v Lopmand Pty Ltd [2003] NSWSC 870 at [15] . o Finally, I note that the "Executive Summary Valuation" does not comply with the Guidelines for Expert Witnesses in Proceedings in the Federal Court of Australia issued 6 June 2007, or its predecessor the Guidelines for Expert Witnesses in Proceedings in the Federal Court of Australia issued 11 April 2007. While I note that the guidelines are not intended to address all aspects of an expert witness's duties, they are clearly intended to assist expert witnesses prepare reports which avoid the criticism that the expert lacks objectivity. In this case, it is clear that no consideration has been given by the person who prepared the document as to Guidelines, or their duty to the Court. 42 In any event, in relation to this Deed of Guarantee, I am further disinclined to exercise my discretion in favour of the applicant where this Court has previously indicated that a personal guarantee given in satisfaction for security for costs is acceptable in only exceptional circumstances: Sunstate Orchards Pty Ltd v Citrus Queensland Pty Ltd [2006] FCAFC 93 , cf Jianshe Southern Pty Ltd v Get Motor Cycles Pty Ltd (formerly Turnbull Cooktown Pty Ltd) (No 3) [2007] FCA 1078 at [30] - [31] . The applicant has demonstrated no circumstances in this case justifying the acceptance of a personal guarantee as distinct from a cash payment or a bank guarantee. Additional points