Federal Court of Australia

Yammine v Lantrak Holdings Pty Ltd [2022] FCA 179

ORDERS

THE COURT ORDERS THAT:

1.    The applicants have leave to file and serve a subpoena to produce documents to Mr Antonino Trimboli, such subpoena to be returnable before the Registrar on 23 February 2022.

2.    The applicants provide the respondents with a draft Court Book index by 14 February 2022 which is to include:

(a)    the current pleadings; and

(b)    all other documents, in chronological order, which any party expects to tender in evidence (however, the parties retain the right to tender documents not in the Court Book).

3.    The respondents notify the applicants of any objections or proposed additions to the draft Court Book index by 18 February 2022.

4.    The applicants provide the associate to Justice Rares with a Court Book in both hardcopy and electronic copy (which is to be in chronological order, double sided copied, consecutively numbered, contain only one clear copy of any document (unless another copy is necessary) and not to contain any tabs) by 23 February 2022.

5.    The applicants file and serve an outline of opening submissions (not to exceed 10 pages) by 24 February 2022.

6.    The respondents file and serve an outline of opening submissions (not to exceed 10 pages) by 3 March 2022.

7.    The parties file, by 3 March 2022:

(a)    a joint list of authorities; and

(b)    a chronology, which is to be marked-up in a manner which identifies each party’s position to the extent that there is any disagreement.

8.    The claim for leave to file an expert report in the applicants’ interlocutory application filed on 3 February 2022 be dismissed.

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

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

RARES J:

1    On 5 March 2021, I set this matter down for hearing for seven days commencing on 7 March 2022. The applicants, Norman Yammine and NJA Pty Ltd as trustee of the NJA family trust (the Yammine parties) alleged that the respondents, Gary Liemant and Lantrak Holdings Pty Ltd (LiemantCo) (the Liemant parties) entered into a collateral contract when the Yammine parties agreed to sell their 50% share in the Lantrak NSW business to the Liemant parties, the holder of the other 50%. The parties had exchanged outlines of evidence beforehand, and subsequently gave discovery as to matters relevant to the issues identified in the outlines.

2    The Yammine parties alleged that the principals of the parties, Mr Yammine and Mr Liemant, made an oral collateral contract. The statement of claim alleges that:

(a)    pursuant to a non-binding heads of agreement dated 27 September 2018 between NJA and LiemantCo, LiemantCo would buy NJA’s shares and other assets used in the Lantrak NSW business for a net price payable to Mr Yammine’s interests of $35 million;

(b)    on 12 November 2018, in order to accommodate LiemantCo’s financial circumstances at the time, the parties entered into an enforceable agreement in which LiemantCo agreed to purchase NJA’s shares for $13 million (the 12 November agreement), rather than $35 million;

(c)    shortly before and or at the same time as they made the 12 November agreement, Mr Yammine and Mr Liemant entered into an oral collateral contract that provided, in consideration of the Yammine interests going ahead with the $13 million sale in the 12 November agreement, the Liemant parties would honour the previous sale price of $35 million in the heads of agreement, in consideration of which Mr Yammine caused NJA and his interests to proceed with the sale.

3    The applicants’ solicitor, Faddy Zouky, said that on 16 September 2021, he briefed Joseph Hayes of Wexted Advisors as a financial expert to consider the profitability of the Lantrak NSW business. Mr Zouky stated that, only on 10 November 2021, he became aware from correspondence that, because of staff turnover in his firm (Zouki Lawyers), no one had downloaded any of the documents that the Liemant parties’ solicitors, Arnold Bloch Liebler (ABL), had sent in May 2021.

4    On 16 December 2021, Zouki Lawyers wrote to ABL, indicating, for the first time, an intention to file an expert report as to profitability of Lantrak NSW. Zouki Lawyers indicated that the Yammine parties proposed to file and serve their expert evidence by 14 January 2022, and suggested giving the Liemant parties until 14 February 2022 to respond.

5    On 18 January 2022, Zouki Lawyers served Mr Hayes’ report. That report involves a complex and somewhat unusual analysis as to profitability as at the time of the Lantrak NSW business acquisition in late 2018, based on financial reports of the Lantrak NSW business as at 30 June 2018 and 30 September 2018, and subsequent accounting documents.

6    Jonathan Milner, the Liemant parties’ solicitor, made an affidavit on 4 February 2022. Mr Milner said that ABL had retained a forensic accounting expert, Dawna Wright, managing director of FTI Consulting, to provide a preliminary view as to the amount of time required in order for her to be able to respond to Mr Hayes’ report. Mr Milner does not explain when ABL first retained Ms Wright or sought the information. But, she informed him that she would not have sufficient time in the period prior to the commencement of the hearing on 7 March 2022 to undertake her own analysis of the financial position of the Lantrak NSW business as at 30 June 2018 and 30 September 2018. But, doing the best she can and in the absence of the documents that Mr Hayes listed in his report over 15 pages which he had before him, it would take her four weeks to provide only an analysis of the methodological techniques he had applied.

The Yammine parties’ submissions

7    The Yammine parties acknowledged that they have made this application late in the piece and that their prior failure to address the issue of profitability that they now seek to raise is entirely a matter within their own camp. They also accepted that, if their application is granted, it will be likely to cause prejudice to the Liemant parties. They suggested that if Ms Wright needed more time to prepare her report, it might be able to be filed either during the course of the hearing, or that further dates could be set aside later beyond the seven days set aside for the current listing, in which the expert evidence could be taken and final submissions made.

Consideration

8    I am not satisfied that it is appropriate to grant the Yammine parties leave to rely on Mr Hayes’ report, or to interrupt the parties’ preparation for the hearing by allowing it to be used at this late stage of the proceeding. Mr Zouky’s explanation does not address why, as soon as his firm briefed Mr Hayes, he did not indicate to ABL that he was contemplating relying on expert accounting evidence or, in particular, the issue to which it would be addressed. Nor did Zouki Lawyers’ letter of 16 December 2021, when proposing that I make orders to provide for the filing of expert evidence, identify how that question would be approached beyond stating that it would concern “expert accounting evidence as to the profitability of Lantrak NSW”.

9    If I allowed the Yammine parties to rely on Mr Hayes’ report, the trial would not finish in the time allotted and there would need to be further dates set aside, and further court time taken to deal with it. Moreover, the Liemant parties will have to deal with Mr Hayes’ complex accounting report that seeks to raise a new issue at a very late stage in the preparation of this matter for hearing. Nor does Mr Zouky’s affidavit explain why, first, that obvious issue as to profitability of the Lantrak NSW business, if it were relevant, was not raised at any time reasonably proximate to the service of Mr Liemant’s outline of evidence dated 28 January 2021, or, secondly, only in September 2021, did it occur to Mr Zouky to engage an expert at all.

10    As Gilmour, Perram and Beach JJ said in Tamaya Resources Ltd (ACN 071 349 249) (in liq) v Deloitte Touche Tohmatsu (ABN 74 490 121 060) (a firm) (2016) 332 ALR 199 at 225–226, [149]–[158], a proper explanation is required where a party seeks to raise, at a late stage, a matter that requires either amendment of pleadings or a substantial change in the structure of a case, in accordance with the principles identified by the High Court earlier in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. In Tamaya 332 ALR at 226 [159], the Full Court said that, even assuming negligence by a party’s lawyer, such conduct of litigation does not attract indulgence from the court, as it might previously have done in different times.

11    If Mr Hayes’ evidence were allowed to be relied on at this late stage, it would cause significant disruption to the preparation of the hearing and its orderly conduct. It would almost certainly necessitate either an adjournment of the hearing or the need to allocate further time to complete it, in circumstances where the Yammine parties have been aware since soon after they received Mr Liemant’s outline of evidence early in 2021, that the issue of profitability, to which the proposed evidence is directed, was relevant. That issue needed to be investigated, if at all, then, and not in the leisurely and somewhat opaque way that Mr Zouky has sought, but failed fully, to explain.

Conclusion

12    For these reasons, I refuse to grant the relief sought in the interlocutory application dated 2 February 2022 for the Yammine parties to file and rely on Mr Hayes’ expert report.

Associate:

Dated:    4 March 2022