Background
The underlying corporate litigation concerned funds transferred through companies in Hong Kong and Singapore to Green Estate Australia Pty Ltd. Claims against Yuqing Hu and two development companies sought more than $19 million, excluding interest, and the setting aside of a shareholding agreement involving interests in land-holding companies allegedly worth between $70 million and $100 million.
During the eighth day of trial, an objection under s 138 of the Evidence Act 1995 (NSW) arose concerning screenshots that a witness had extracted from a former employer’s computer system. The primary judge questioned whether the access was unlawful and whether the appellants’ lawyers might be implicated by seeking to tender the material. After obtaining advice, the appellants’ counsel withdrew and their solicitors foreshadowed seeking leave to withdraw. The judge declined to adjourn the trial for weeks or months, indicating that only a short adjournment—effectively three business days—would be available for replacement lawyers to prepare.
The Court’s Holding
The Court of Appeal granted leave and allowed the appeal. Although appellate courts rarely intervene in discretionary procedural rulings, the Court held that the primary judge’s discretion miscarried under the principles in House v R. His reasons reflected a misunderstanding of s 138 and, in the unusual circumstances, the refusal of a longer adjournment was manifestly unreasonable or plainly unjust.
Section 138 permits a court to admit improperly or illegally obtained evidence when the desirability of admission outweighs the undesirability of admitting evidence obtained in that way. A lawyer does not become implicated in the original impropriety or illegality merely by asking the court to exercise that discretion, absent personal involvement in obtaining the evidence. The respondents had made no allegation of wrongdoing by the appellants’ lawyers, and the primary judge’s proposed solution—simply withholding the evidence—did not resolve the apparent conflict his comments had created.
Given the case’s complexity, eight completed trial days, six volumes of court materials, 26 affidavits and extensive cross-examination transcripts, three business days could not reasonably enable replacement lawyers to prepare. The Court remitted the adjournment application to the primary judge for reconsideration and ordered that the appeal costs be costs in the cause below.
Key Takeaways
- Lawyers do not become tainted by earlier impropriety or illegality merely because they seek admission of evidence under s 138 of the Evidence Act.
- Case-management efficiency under s 56 of the Civil Procedure Act must be balanced against procedural fairness and a party’s reasonable opportunity to present its case.
- A refusal to adjourn may be overturned where the judge applies a mistaken principle or allows insufficient time for replacement lawyers to prepare for a complex, advanced trial.
Why It Matters
The decision clarifies that s 138 expressly contemplates advocacy for the admission of improperly or illegally obtained evidence and does not, without more, expose the advocating lawyers to professional or criminal responsibility. Trial judges should not investigate or comment on alleged misconduct by legal representatives when no party has raised such an allegation.
It also illustrates the exceptional circumstances in which an appellate court will disturb an interlocutory adjournment decision. Even substantial cost, delay and pressure on court resources cannot justify a timetable that deprives a party of a realistic opportunity to obtain representation and prepare its case.