FEDERAL COURT OF AUSTRALIA

Capic v Ford Motor Company of Australia Limited (Late Evidence) [2020] FCA 1117

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant is granted leave to rely on the affidavit of David Marston dated 27 June 2020.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1    The Applicant applies for leave to rely upon an affidavit of Mr David Marston affirmed on 27 June 2020 which is opposed by Ford. Mr Marston is a motor mechanic. On 23 April 2018 he was retained by the Applicant’s former solicitors to undertake certain work in relation to her vehicle, a 2012 Ford Focus Sport LW MKII. His retainer followed orders made by this Court on 17 November 2017 that the Applicant make her car available to Ford for inspection. The parties agreed that this would take place over five days. The first four days comprised the period Tuesday 24 April 2018 to Friday 27 April 2018 and the fifth was Saturday 19 May 2018. At the inspections during the week, Ford had retained Mr Rowan Carter to inspect the vehicle on its behalf. Mr Carter is a mechanical engineer with experience in the modification, repair and servicing of motor vehicles. The inspection on Saturday 19 May 2018 involved a valuer rather than Mr Carter.

2    The Applicant’s former solicitors retained Mr Marston to inspect the car both before and after the inspections with Ford. More importantly, they also retained him to attend during Ford’s inspections. He was specifically instructed to observe how Mr Carter inspected the vehicle, to note the tests Mr Carter ran upon it, to proffer his views – if any – on the suitability of Mr Carter’s methodology and tests and to bring to the solicitors’ attention any other matter which he thought might impact on those issues.

3    Consistently with his retainer, Mr Marston inspected the vehicle prior to the first inspection by Ford and he observed Mr Carter carry out his inspection from 24 April 2018 to 26 April 2018 (as events transpired, 27 April 2018 was not needed by Mr Carter). Mr Marston inspected the vehicle after Mr Carter’s inspection. He then attended the second inspection with the valuer and afterwards inspected the vehicle. Although they were not required by his written retainer, Mr Marston did two further things which he was requested by the Applicant’s solicitors to do. First, he attended the service of the vehicle on 24 and 25 May 2018 (which took place at Jefferson Ford) and he inspected the vehicle one more time on 25 May 2018.

4    On each of these occasions, Mr Marston kept notes. These notes run to 25 pages. They are now attached to his affidavit. The Applicant’s solicitor, Mr Pagent, also recently prepared a typewritten version of the notes and Mr Marston attached these to his affidavit as well.

5    In due course, Mr Carter prepared a report of his inspection which was dated 16 May 2018. In that report Mr Carter refers to the fact that Mr Marston was present during the inspection (from 24 to 26 April 2018) and that only he, Mr Carter, drove the vehicle. The two travelled together in the Applicant’s vehicle more than 140 km through suburban and inner city Melbourne and also in freeway conditions. The vehicle was also put on a hoist and inspected. Mr Carter’s ultimate conclusion in his first report was that the ‘operation and performance of the Applicant’s vehicle is acceptable and there are no mechanical issues with the engine or the transmission.’

6    This report was sent to the Applicant on 26 April 2019. Upon its service, there was an issue between the parties as to whether the Applicant’s vehicle was suffering from the defects which she alleges. The Fourth Further Amended Statement of Claim alleges at §6AC that the Applicant’s vehicle displayed a number of difficulties associated with its transmission and at §6E it is alleged that those problems persisted even after it was repaired. In its defence to §6AC Ford did not admit that the vehicle exhibited the difficulties alleged and denied that the fitting of the DPS6 transmission could, in any event, constitute a defect. It made a similar non-admission in relation to the allegation that the defects persisted. In fact, this issue had been live on the pleadings since the Amended Statement of Claim and the defence filed to it on 27 July 2016.

7    Mr Carter’s evidence that there was nothing wrong with the Applicant’s vehicle therefore went to an issue which the pleadings had already foreshadowed. This issue was whether there was anything wrong with the Applicant’s car. In a class action involving the allegation that over 70,000 vehicles contained a defective transmission which caused a range of driving difficulties, the fact that Mr Carter gave expert evidence on inspection that there was nothing wrong with the vehicle belonging to the class’s lead applicant was a significant piece of evidence.

8    That issue, of course, pre-dated Mr Carter’s report, however. It existed from the time that Ford’s defence to the Amended Statement of Claim was first filed on 27 July 2016. Once that defence was filed the Applicant was obliged to prove that her vehicle suffered from the problems alleged to exist (at §6AC) and to prove that it continued to suffer from those defects even after it was repaired (at §6E). The Applicant has given evidence about these problems and their persistence in several of her affidavits.

9    Although it was open to the Applicant to lead, in addition her own evidence, evidence from Mr Marston in chief that the vehicle did exhibit problems, she did not seek to do so (I discuss his evidence in more detail shortly). Once Mr Carter’s report of 16 May 2018 was served, however, there was the forensic possibility that the Court might prefer the evidence of Mr Carter that the car had no problems to the Applicant’s evidence that it did. It is arguable that Mr Carter’s evidence gave rise to an entitlement in the Applicant to lead further evidence in reply that the problems with the vehicle were still manifest.

10    The Applicant’s evidence in reply was due by 13 March 2020. The Applicant did not seek to lead in reply any evidence from Mr Marston responding to Mr Carter’s evidence. That is not to say that the Applicant did not seek to rebut Mr Carter’s view for it is true, as Mr Pike SC for the Applicant submitted, that she also filed evidence from Dr Greiner, an engineering expert who, I am told, will be critical of Mr Carter’s methods.

11    The Applicant now seeks to file an affidavit of Mr Marston. This affidavit does four things:

    It explains the history of his interactions with the vehicle;

    It attaches his notes of all of the inspections, including Mr Pagent’s typewritten transcript;

    It annotates those notes in cases where his memory has been refreshed by them; and

    It gives some evidence of his interactions with the Applicant’s former solicitors.

12    Mr Marston’s notes cover each of his inspections and also the time he spent with Mr Carter. Some of the notes of Mr Marston’s time with Mr Carter may suggest that there were some issues with the vehicle. Further, the notes he took of the inspection he carried out on his own on 25 May 2018 do suggest that there were difficulties with the transmission. For example, at p 49 of his present affidavit the typewritten notes record for that day:

However on road test vehicle displayed:

erratic gear change

lost power from standing start

hunting between gears

lag from take off

vehicle held acceleration when foot taken off throttle at 60kms

when vehicle cold hard to select gear.

13    Once Mr Marston had done what he was asked to do, he sent an email to the Applicant’s former solicitors on 25 July 2018. In this email, amongst other things, he said this:

To confirm the vehicle had been correctly repaired I had to carry out an extended road test. During the test I personally noted some vehicle abnormalities which Ms Capic had advised us of, but I had previously not personally experienced. I wonder if this is relevant and possibly merits a quick conversation.

14    There was no evidence before me as to what response this email solicited but it may be inferred that Mr Marston was not asked to prepare an affidavit based on his observations. It is fair to say that from 25 July 2018 the Applicant’s former solicitors had been made aware that Mr Marston could give evidence which could assist the Applicant’s case that her car suffered from the defects.

15    There was a change of solicitors on 18 October 2018. During argument it was accepted that the new solicitors had also been in possession of the email of 25 July 2018 from around the time it was sent. Again, it may be inferred that they too were on notice that Mr Marston could give evidence which assisted the Applicant’s case that her car suffered from the defects.

16    Mr Marston’s evidence has two potential relevancies. First, in relation to the inspection of the vehicle he did on 25 May 2018 it is evidence that as at that date the Applicant’s car exhibited the defects. That evidence is relevant to the issue of whether the vehicle does exhibit the defects. This evidence may be characterised both as being in chief but also as being in reply to Mr Carter’s evidence that the vehicle did not exhibit the defects. Secondly, insofar as Mr Marston’s notes deal with his observations of Mr Carter’s inspection on 24 to 26 April 2018, this evidence may be relevant to whether Mr Carter’s evidence should be accepted. As such it too is evidence in reply.

17    The solicitor for the Applicant, Mr Pagent, gave evidence on the present application as to why it was now sought to put on this evidence from Mr Marston. He said that attention has been focussed on Mr Marston because of two recent events. The first of these was an opening written submission by Ford that Mr Carter’s evidence was that there was nothing wrong with the vehicle, that Mr Marston had been present whilst Mr Carter carried out his inspection, that Mr Marston was not being called and that, in that circumstance, an inference ought to be drawn that his evidence would not have assisted the Applicant’s case, that is to say, a Jones v Dunkel (1959) 101 CLR 298 inference.

18    The second was the cross-examination of the Applicant herself during which evidence was elicited from her to the effect that she knew Mr Marston had been present during Mr Carter’s inspection and that she thought he might have prepared a report although she did not really know. That led to a call by Ford for any such report which eventually dislodged Mr Marston’s email of 25 July 2018 to the Applicant’s former solicitors. Shortly afterwards Mr Marston’s affidavit of 27 June 2020 tumbled out too.

19    Mr Pagent said at §12 of his affidavit that ‘prior to receiving the Respondent’s written outline of opening submissions on 11 June 2020, the Respondent had not given any indication to the Applicant that it would seek to advance such an argument’. Of course, the argument in question was the suggestion that an inference might be drawn against the Applicant because of the failure to call Mr Marston.

20    I accept that Ford had never previously intimated that such an inference should be drawn. However, I do not think that it needed to do so. Mr Carter inspected the vehicle with Mr Marston and Mr Carter put on a report whose eventual conclusion was that there was nothing wrong with the vehicle. It was obvious that Ford would submit that the failure to call Mr Marston was forensically significant. I do not think the fact that Ford has ultimately made that submission provides a reasonable basis, on its own, now to call Mr Marston. If the making of the Jones v Dunkel submission were itself an unforeseeable event or some species of unreasonable conduct by Ford, then one might take a different view of the matter. But I do not think Ford’s submission was unforeseeable or unreasonable. Consequently, I do not accept that the making of this submission now affords a reasonable basis – without more – for calling Mr Marston.

21    The second explanation put forward was that the evidence went to support the credit of the Applicant which was said to be under attack. However, during argument on the present application Ford made clear that it was not going to submit that the Applicant’s credit was in any way affected by what she had said in relation to Mr Marston. That being so, I do not think that her cross-examination provides a basis for permitting her to rely upon Mr Marston’s affidavit.

22    That brings one to the heart of the matter. What is presently involved is an application to lead evidence in reply. That evidence was due on 13 March 2020. The trial has now commenced and the lay evidence is concluded. The Applicant requires therefore a grant of leave to rely upon the evidence. In cases where such an indulgence is sought it is incumbent upon the party seeking the indulgence to explain how the delay in its actions has come about. But a delay is a finite period of time and hence, like many things, has both a beginning and an end. Any explanation for the delay must generally wrestle with both of these ends, or at the very least acknowledge them. It must lay bare both why it is only now that the action is sought to be taken but also, and perhaps more importantly, why it was not taken when it should have been. Often the former will be reasonably obvious. Usually it is the latter which is of most discretionary significance. But both are important.

23    A party may have failed to have taken some step at an earlier time for a variety of reasons. For example, a deliberate decision may have been made for tactical reasons not to take the step. In such cases, it may be quite unattractive to the Court to permit a reversal of such a deliberate decision even where there is little prejudice to the opposing party in doing so. On the other hand, it may appear that the reason the step was not taken was because of an oversight within the camp of the party’s own legal advisers. Here the case for the indulgence may appear stronger even where there is prejudice to the opposing party. There may be other cases where it appears that the reason the action was not taken earlier is the result of some third party’s action in which case the case for a favourable exercise of the discretion may appear stronger still. The use of the word ‘stronger’, it should be noted, must not be understood as suggesting any outcome but as merely a mechanism of comparison.

24    The point of these observations for present purposes is a different one. In order correctly to exercise the discretion it is necessary for the Court to understand the reasons for the delay. The weighing exercise contemplated in the preceding paragraph cannot be carried out in the absence of an explanation for the delay. That is why it is generally accepted that a party seeking the favourable exercise of a timing-related discretion must put before the Court an explanation for the delay. Speaking in the context of a late amendment to pleadings the High Court stressed this in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 at 215 [103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. In the joint judgment their Honours observed that the party seeking the amendment was required ‘to bring the circumstances giving rise to the amendment to the court’s attention’. That principle has been repeatedly applied by the Full Court of this Court: see Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; 187 FCR 261 (‘Cement’) and Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; 332 ALR 199. That explanation will often be by affidavit from the party’s solicitor but as Cement at [51] itself shows it need not be and, in an appropriate case, it may be proffered by other means. For example, an explanation for delay may consist of counsel informing the Court that she was responsible for the earlier drafting of the pleading, had not thought of the point and realised it only recently. Whether that explanation will justify the grant of an amendment (or the use of late evidence &c.) will depend on the actual case but such a statement would be an explanation for present purposes.

25    In this case, the Applicant’s explanation for her delay in deploying Mr Marston’s evidence was given on affidavit by her solicitor, Mr Pagent. He explained fulsomely why the Applicant came to be putting on this evidence in reply only in late June 2020, one third of the way through the trial. But he gave no direct evidence of why Mr Marston’s affidavit was not put on by 13 March 2020. For the reasons I have given, evidence about the former without evidence about the latter does not constitute an explanation for delay for it is missing half the picture and, in fact, in this case, the more important half.

26    Although Mr Pagent gave no direct evidence about it some of his evidence is capable of throwing light on the issue albeit indirectly. His evidence contains the following relevant integers:

    It was on Saturday 20 June 2020 that one of his employed solicitors drew his attention to Mr Marston’s email of 25 July 2018 (§20);

    On Sunday 21 June 2020 Mr Pagent spoke to Mr Marston. He had not spoken to him before (§21); and

    During that conversation Mr Marston told him he had taken notes and Mr Pagent asked him to see if he could find them. The following day they spoke again and subsequent to that conversation Mr Marston provided the notes at around 4 pm. These were then typed up the following day (§21).

27    It seems clear therefore that whilst Mr Pagent’s firm at all material times has had possession of Mr Marston’s email of 25 July 2018, it had never spoken to him, did not know he had produced notes and was not in possession of those notes. This evidence is inconsistent with an earlier deliberate decision by the solicitors not to call Mr Marston. A deliberate decision not to call him would necessarily have been a function of the evidence which it was anticipated he might give and there could have been no such anticipation if the man had not been spoken to and his notes not inspected. Further, such a deliberate decision would be inconsistent with the position which has now been taken. It follows that I should infer that the decision not to call Mr Marston was not a deliberate or tactical decision.

28    Next it is relevant to note that a lawyer who had read Mr Marston’s email of 25 July 2018 ought to have realised its significance and his obvious capacity to give useful evidence about one of the central issues in the Applicant’s case.

29    Finally, it is relevant to note that, of course, the email was not sent to them but to their predecessors. Plainly, those solicitors have provided their files to the current solicitors which is how I infer the email is in their possession.

30    In light of those matters, it seems that the most likely explanation on the balance of probabilities is twofold. First, the former solicitors failed to appreciate the email’s significance and did nothing about it. Secondly, the email was supplied to the new solicitors in the changeover. The new solicitors either did not review the whole of their predecessor’s files and did not see the email at all or, if they did inspect it, overlooked its significance. In either event, I am satisfied that it is only the recent trial events that have dislodged it from its resting place for the first time. As such I find that the reason Mr Marston’s affidavit was not filed as reply evidence in accordance with the reply timetable was because of a mistake within Mr Pagent’s firm. It would have been helpful if Mr Pagent had brought himself to say as much in his affidavit but the mere fact that he did not does not prevent me from finding that this is the explanation.

31    It is therefore necessary to weigh that explanation – attorney error – and the evidence’s significance (answer: potentially quite significant) against the prejudice suffered by Ford if it is now used. Mr Scerri QC for Ford submitted that if Mr Marston’s affidavit had been put on in March 2020 as it should have been it would have had to have been in proper form. By this he meant that instead of merely attaching his notes to his affidavit Mr Marston would have had to have given an account of his inspections. Because of the course which had instead been taken, Mr Scerri submitted that Ford was prejudiced in the manner of its cross-examination. The point was illustrated by reference to that part of Mr Marston’s notes dealing with his inspection (without Mr Carter) of the vehicle on 25 May 2018 (it being recalled that it was during this inspection that Mr Marston noted difficulties with the vehicle). I have set that part of the notes out above at [12]. Mr Scerri submitted that it would be difficult to cross-examine Mr Marston about, for example, ‘erratic gear change’ since it was obscurely expressed. By contrast, if Mr Marston had put on an affidavit in proper form he would have given evidence of what he had done with the vehicle and how he came to the conclusion that it exhibited an erratic gear change.

32    I do not accept either of these arguments. I do not agree that it was inevitable, and it was certainly not necessary, for Mr Marston’s affidavit to be in any different form had it been filed by 13 March 2020. More importantly, I do not agree that any real prejudice is visited upon Ford because Mr Marston’s evidence takes the form of his notes. In ‘proper form’ I do not think his evidence would really be any different and certainly not different in any way which results in substantive prejudice to Ford. I should add for completeness that the cross-examination of Mr Marston will have no impact on the length or running of the trial.

33    Consequently, the balancing exercise called for is one in which a mistake about the handling of relevant evidence made within the camp of the Applicant’s solicitors is to be weighed against what appears to be no prejudice to Ford or to the trial overall. It seems clear in that circumstance I should permit the Applicant to use the affidavit of Mr Marston. It was for these reasons that on 2 July 2020 I granted leave to the Applicant to do so.

Associate:

Dated:    4 August 2020