SHEN v OSSYANIN [2018] NZHC 3385

SHEN v OSSYANIN [2018] NZHC 3385 [18 December 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2015-404-00855[2018] NZHC 3385BETWEEN ZHAOWU SHENPlaintiffAND ANDREY YURIEVICH OSSYANIN ANDTATYANA OSSYANINAFirst DefendantHARRINGTON PROPERTYINSPECTIONS LIMITEDSecond DefendantHearing: 3 – 7, 11 – 12, 14 September and 17 December 2018Counsel: A Sharp and C Huang for the PlaintiffR J Macdonald and M Cherrington for First DefendantRuling: 18 December 2018RULING OF WHATA JThis judgment was delivered by me on 18 December 2018 at 3.00 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate: .Solicitors: Jesse & Associates, AucklandMBC Law Limited, Auckland[1] Mr Ossyanin seeks permission to offer further evidence and to:(a) call Andreus Mitalaukis;(b) recall himself; and(c) recall Anton Naoumov.[2] The application in relation to Mr Mitalaukis is not opposed, subject to the Courtbeing satisfied that he was timeously appraised of the date of the hearing and stepswere taken timeously to secure his attendance at the hearing and, further, that anywasted costs occasioned by a further hearing are borne by Mr Ossyanin.[3] The plaintiff, however, opposes the balance of the application as it relates tothe production of "contemporaneous records of invoices and payments".Background[4] This case is essentially about whether Mr Ossyanin misrepresented to Mr Shenthat the house sold by him to Mr Shen did not 'leak'. One of the key factual issues iswhether, at a meeting on 1 November 2013, Mr Shen asked Mr Ossyanin the followingquestion: "Does the house leak?" Mr Ossyanin says that question was never asked.He also says that, in fact, issues about potential leaks were addressed at an inspectionon 27 October 2013. The plaintiff says no inspection took place on that date.The new evidence[5] The new evidence is to address whether or not a meeting took place with theplaintiff, Mr Shen, his real estate agent, Ms Chen, and Mr Harrington, his inspector,on 27 October 2013. Mr Ossyanin seeks to produce contemporaneous records ofinvoices and payments in respect of transaction services provided on 17 October 2013,27 October 2013, and 1 November 2013. Mr Ossyanin, in particular, now wishes toproduce an invoice in respect of services provided by Mr Naoumov, his interpreter,which purports to record his attendance at a meeting on 27 October 2013 with abuilding inspector. Mr Ossyanin says that this evidence corroborates his version ofevents.Reason for lateness[6] Mr Ossyanin submits that he did not recall having received the invoices fromMr Naoumov until after the close of the hearing. Having reviewed them, theysupported his version of events and now he seeks leave to adduce them.The plaintiff's opposition[7] The plaintiff opposes the making of the order in relation to Mr Ossyanin andMr Naoumov, for the following reasons:(a) The issue whether or not the plaintiff and/or his witness were aware ofor attended a meeting on 27 October 2013 at 3 Wairangi Street, HerneBay, was clear from not only their viva voce evidence (and their cross-examination) from the first day of the hearing through to the third dayof the hearing, but also from the diary note of Mr Harrington discoveredprior to the hearing as part of ongoing discovery obligations.(b) There were no facts before the Court to either support this applicationor raise an inference that the need for the relief claimed arose out ofsome failure on the part of counsel to note the significance of thisevidence sought to be led. This matter, which arises directly from thefirst defendants' failure to make discovery and produce the documents,they now seek to introduce.(c) There is no explanation for the reasons for failing to have producedthese documents, as required by discovery, or to provide the evidenceconcerning the documents during the testimony of Messrs Ossyaninand Naoumov. Both of these persons gave evidence, in the main, onthe fifth day of hearing.(d) Had Mr Ossyanin exercised due diligence, these documents, ifavailable prior to the hearing, must have been available for discoveryand producing.(e) The plaintiff would be prejudiced by the introduction of thesedocuments which, if before the Court, should have been put to theplaintiff and his witnesses.(f) If the documents were permitted to be introduced, it would properlyrequire the plaintiff and Ms Chen to return from China to deal with suchevidence, which would create unjustifiable expense.Threshold test[8] The threshold for further evidence after closure of the case was recentlyaddressed by Duffy J in Jackson v Te Rangi. She observed:1[111] In Lindsay v Nobel Investments Ltd [2014] NZHC 799, AssociateJudge Osborne at [122] endorsed a passage from McGechan on Procedure(online looseleaf ed, Brookers) at [HR10.10.07], which draws from case lawpre-dating the Evidence Act. However, he then went on to say at [123]:There is a risk in this area of overlooking the principle, as articulatedby the Supreme Court that "resort is not to be had to the common lawwhen statute covers the ground": BNZ Investments Ltd vCommissioner of Inland Revenue [2008] 2 NZLR 709 at [71].This led Associate Judge Osborne to the view that:[125] The starting point under s 98 is therefore that the evidence isnot to be offered without my permission. Subsections (2) and (5) thenpermit discretionary departure from that starting point, but only whereunfairness cannot be remedied by an adjournment or a costs award.[126] That discretion must be exercised by reference to the purposesof the Evidence Act as contained in s 6, which relevantly provide:6 PurposeThe purpose of this Act is to help secure the just determinationof proceedings by—(a) providing for facts to be established by theapplication of logical rules; and1 Jackson v Te Rangi [2014] NZHC 2918, [2015] 2 NZLR 351.(c) promoting fairness to parties and witnesses; and(e) avoiding unjustifiable expense and delay; and[127] Here, for the most part, the Evidence Act covers the ground.While pre-Act case law may assist in highlighting matters that may berelevant to the exercise of the discretion, the provisions of the Actitself are the paramount consideration. [112] I agree with Associate Judge Osborne's approach. Though I note thatthe discretion in s 98 is broad; and the considerations expressed in s 98 andthe purpose in s 6 of the Evidence Act articulate general notions that alsounderlay the common law tests for admission of further evidence after a partyhas closed its case. So, when it comes to the application of the statutoryprovisions in a particular case, the common law principles for admission ofthis type of evidence still provide helpful guidance; particularly at a time whenthere is a paucity of case law under s 98.[113] A helpful summary of the relevant common law principles can befound in Equiticorp Industries Group Ltd (in stat man) v Hawkins [1996] 2NZLR 82 (HC) at 85:1 The discretion should be exercised sparingly once the cases on bothsides have closed and leave should only be given in exceptionalcircumstances;2 Only if the failure to call evidence at the proper time is adequatelyexplained should the discretion be exercised;3 The justice of the case must require the admission of the additionalevidence ;4 Leave will be refused if the evidence would have been availablehad due diligence been exercised;5 If the party is taken by surprise, leave will be more readily granted;and6 The distinction between a failure to tender evidence, and an electionnot to, can be important.I adopt this framework for present purposes.Assessment[9] I am satisfied that the application for leave to adduce further evidence shouldbe declined for the following reasons:(a) The documents now sought to be produced should have beendiscovered. No adequate reason has been provided for the failure todiscover these documents.(b) The documents are only indirectly relevant to the key issues at trial.Mr Ossyanin wants to adduce them because it corroborates his viewthat there had been a meeting prior to the key November meeting andcontradicts the plaintiff's account of what occurred. However, asMr Macdonald noted for Mr Ossyanin, these events took place somefive years ago. An exact memory of what occurred cannot be expected.Moreover, even if the earlier inspection happened, its probative valuein terms of the key issues in the case is limited, because it does not beardirectly on whether key statements were made in the Novembermeeting.(c) It would be unfair to the plaintiff to allow the evidence, becauseultimately key witnesses would need to be recalled at substantialexpense and inconvenience.(d) I also agree with the plaintiff that, to the extent relevant, the issue waswell before the Court from the first day of the hearing and it shouldhave been evident then to Mr Ossyanin that these documents might berelevant.[10] On that basis, the application to call Mr Mitalaukis is granted. The applicationin relation to the invoices is declined.