Today the Court of Appeal upheld an appeal brought by a liquidator in the decision of Peter Hillig in his capacity as liquidator of ACN 092 745 330 Pty Ltd (in Liquidation) & Anor v Battaglia & Ors [1]. Gleeson JA provided the primary judgment.
Case at trial
The case at trial concerned payments (amounting to about $1.1 million) made by a Company to an employee (Mr Battaglia), his wife and their family trust. The Company was then placed into liquidation. The liquidator commenced proceedings against Mr Battaglia alleging that he had breached statutory duties owed by him to the Company under sections 181 and 182 of the Corporations Act 2001 and that the Company payments were unreasonable director-related transactions under section 588FDA of the Corporations Act2001.
The primary judge dismissed the claims with costs. The decision at first instance attracted considerable attention because in issue was whether Mr Battaglia was a director or officer at the relevant times.
Appeal
The appeal raised interesting legal issues. In particular, the circumstances in which a party can adduce further evidence on appeal (in accordance with s.75A(7) and (8) Supreme Court Act). Adducing evidence on appeal is exceptional and rarely permitted.
The evidence sought to be adduced on appeal was first produced in the proceedings below in response to a notice to produce concerning costs after the primary judgment was delivered. It included correspondence between Mr Battaglia and the ATO relevant to certain of the Company payments. It was contended that the documents contained previous representations or admissions made by Mr Battaglia about the Company payments which were contrary to the evidence he gave at trial which the trial judge had accepted.
The evidence was accepted. In so doing, Gleeson JA articulated a threefold legal test for when evidence on appeal can be adduced having regard to “special grounds” although noting that it was not possible to formulate a “universal test” (at [86]).
There must be “special grounds” (s.75A(8) Supreme Court Act). First, the evidence could not have been obtained by reasonable diligence for use at trial. Second, the evidence is credible. Third, the evidence is such that there is a high degree of probability that there would be a different result.
The evidence intended to be adduced was considered to be highly probative because it directly contradicted Mr Battaglia’s evidence on trial.
The Court ordered a re-trial on all issues in accordance with the power contained in s 75A(10) of the Supreme Court Act and qualified by UCPR r 51.53(1), which limits the Court’s ability to order a re-trial unless some substantial wrong or miscarriage has occurred.
A copy of the judgment is available here:
[1] [2018] NSWCA 67,per Gleeson JA, Leeming JA and Emmett AJA.