ACK Pty Ltd v Mercy Human Services Limited [No 2]
[2025] WASC 431
•8 OCTOBER 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ACK PTY LTD -v- MERCY HUMAN SERVICES LIMITED [No 2] [2025] WASC 431
CORAM: GETHING J
HEARD: 3 OCTOBER 2025
DELIVERED : 8 OCTOBER 2025
FILE NO/S: CIV 2620 of 2019
BETWEEN: ACK PTY LTD
First Plaintiff
JEFFREY MARKOFF
Second Plaintiff
AND
MERCY HUMAN SERVICES LIMITED
First Defendant
MERCYCARE LIMITED
Second Defendant
Catchwords:
Evidence - Whether document is a business record - Admissibility of a statement of a deceased person - Discretion to reject evidence
Legislation:
Evidence Act 1903 (WA) s 79C
Result:
Statement admissible and not rejected on discretionary grounds
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr J P Moore KC, Dr R A Collins & Mr A Hanna |
| Second Plaintiff | : | Mr J P Moore KC, Dr R A Collins & Mr A Hanna |
| First Defendant | : | P E Cahill SC & A L Spencer |
| Second Defendant | : | P E Cahill SC & A L Spencer |
Solicitors:
| First Plaintiff | : | King & Collins |
| Second Plaintiff | : | King & Collins |
| First Defendant | : | HWL Ebsworth Lawyers |
| Second Defendant | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Albrighton v Royal Prince Albert Hospital [1980] 2 NSWLR 542
Cavill v The State of Western Australia [2008] WASCA 108
Commissioner of Australian Federal Police v Li [No 2] [2018] WASC 359
Donohue v Director of Public Prosecutions (WA) (2011) 215 A Crim R 1
Feltafield Pty Ltd v Heidelberg Graphic Equipment (1995) 56 FCR 481
Greenaway v The State of Western Australia [2022] WASCA 166
McKay v Commissioner of Main Roads (No 2) [2010] WASC 153
Rhodes v De Castro [No 2] [2023] WASC 93
Shmee Pty Ltd v Bresam Investments Pty Ltd [2008] VSC 291
Soia v Bennett [No 4] [2012] WASC 292
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 23] [2023] WASC 380
Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40
GETHING J:
Introduction
In 2016 Mercy Human Services Limited (Mercy) acquired Belrose Care, a business comprising four residential aged care facilities. The vendor of Belrose Care was Ack Pty Ltd (ACK). The agreement was entered into on 1 July 2016 and was styled as a Sale and Purchase of Business Agreement (SPA). The obligations of Mercy under the SPA were guaranteed by its parent company, MercyCare Limited (MercyCare). I will refer to MercyCare and Mercy collectively as the Mercy Parties. An associated Land Contract was entered into contemporaneously by ACK, Jeffrey Markoff, and the Mercy Parties to, amongst other things, convey the ownership of the land on which the business of Belrose Care was carried out. Mr Markoff was, and still is, a director of ACK.
After payment of an initial deposit, upon Completion (being 27 September 2016) a certain price was payable by Mercy to ACK. Mercy then became the owner of the business that was Belrose Care, as well as the assets of the business. Mercy also became the registered proprietor of the associated land.
The SPA then provided for the payment of a Deferred Payment. Broadly speaking, the entitlement to, and calculation of, the Deferred Payment depended on the difference between the total amount of refundable deposits (referred to as Bonds) paid by residents held by Mercy two years after Completion (that is on 27 September 2018) and at Completion. Mercy's potential liability for such a payment under this provision was limited to between $1 million and $6 million.
It is not in issue that that the total amount of the Bonds as at 27 September 2018 was less than that at Completion and so no Deferred Payment was paid to ACK.
In the present action, ACK and Mr Markoff contend that Mercy breached terms of the SPA which, in effect, required Mercy to prioritise the admission of residents who provided a Bond over concessional residents. They also contend that Mercy made representations to the same effect. ACK is first plaintiff and Mr Markoff is second plaintiff (collectively the ACK Parties). Mercy is the first defendant and MercyCare is the second defendant.
The issue arising for determination
The matter is currently before me in trial. An issue of admissibility has arisen which requires a determination.
The ACK Parties seek to tender a handwritten note made by a Margaret Draper (Draper Note). At the time the Draper Note was made, Ms Draper was the Director of Nursing at Tanby Hall, one of the Belrose Case facilities acquired.[1]
[1] ts 727 (Markoff).
The issue of admissibility arises because Ms Draper died on 14 July 2024.
The ACK Parties contend that the Draper Note is admissible pursuant to Evidence Act 1906 (WA) (EA) s 79C(1)(a) (statement by a qualified person) and/ or s 79C(2a) (business record). The Mercy Parties contend that the Draper Note is not a business record and, in any event, its admission should be rejected on discretionary grounds.
Counsel for the ACK Parties filed submissions dated 24 September, 26 September and 30 September 2025. Counsel for the Mercy Parties filed submissions dated 25 September 2025. Both parties filed affidavits on the issue which I will refer to below.
Draper Note
The Draper Note is on Belrose notepaper. It reads:
Meeting at Mercy Care 21.9.2016
Margaret Ingleton said that when Mercy Care takes over 40% of admissions will be concessional.
Maintenance personal Gary stipulated that no more risk taking was to occur. He is available 24/7 for emergency problems. Also indicated that if something was to break more than 5 times then don't fix. Get a new one.
I asked Margaret Ingleton who to call for information on bonds suggesting Nicholas and she replied that I must run all questions past her.
[signature]
Margaret Draper
Ms Ingleton was the director of aged residential care for Mercy at the time. At the time of making this decision, Ms Ingleton had given evidence.
Mr Markoff gave evidence that the Draper Note was written in his presence on 21 September 2016.[2] It was prepared at his request.[3] He said that the last time he spoke to Ms Draper was two or three years ago, and she was angry towards him about having had to write the Draper Note.[4]
[2] ts 583 (Markoff).
[3] ts 714 (Markoff).
[4] ts 773 - 773 (Markoff).
Counsel for the ACK Parties read and relied on an affidavit sworn by Brandie Johnstone, a legal practitioner employed by their lawyers. Ms Johnstone's evidence is to the effect that Ms Draper was contacted by the lawyers for the ACK Parties in September 2020 in essence to proof her. The issue of whether to file a witness outline for Ms Draper was considered in April 2021 and then in May 2022. There was an issue with confidentiality as Ms Draper had gone on to be employed by Mercy after the sale, so subpoenaing her was considered. In February 2023 the lawyers for the ACK Parties decided not to file a witness outline for Mr Draper. This was on the basis of instructions from Mr Markoff to the effect that his relationship with Ms Draper had broken down. This decision was revisited in April 2024. By that time, Mr Markoff was aware that Ms Draper was ill, suffering from mental health issues, and for this and other personal reasons known to Mr Markoff, a decision was made not to contract her so as not to exacerbate her condition. So no witness outline was filed in accordance with the court's timetable. As I have mentioned, she died on 14 July 2024. In May 2025, the Mercy Parties filed a witness outline for Ms Ingleton which referred to the 21 September 2016 meeting, the subject of the Draper Note.
Counsel for the Mercy Parties read and relied on an affidavit affirmed by Thomas Millar on 30 September 2025. Mr Millar is a legal practitioner employed by the lawyers for the Mercy Parties. Mr Millar deposes that the Draper Note was included in the index to the bundle of documents which the ACK Parties proposed to tender at the trial of the action received by him on 26 June 2025. It was one of nearly 3,000 documents. It was described as 'File Note of Meeting at Mercy Care on 21 September 2016 (undated)', that is, with no reference to Mr Draper being the author. Mr Miller also gives evidence to the effect that the Mercy Parties, and their lawyers, only became aware that Ms Draper had died on 22 September 2025.
Counsel for the Mercy Parties also read and relied on an affidavit affirmed by Ronan Devahasdin on 26 September 2025. Mr Devahasdin is a legal practitioner employed by the lawyers for the Mercy Parties. He deposes that:
(a)he sent an email to the lawyers for the ACK Parties on 17 September 2025 objecting to the admission of the Draper Note which had been referred to in the written opening submissions filed on behalf of the ACK Parties on 1 September 2025; and
(b)on 21 September 2025, at 8:10pm, he received a draft supplementary witness outline of Mr Markoff which addressed the circumstances in which the Draper Note was created.
I regard the evidence as to the procedural history which I have set out at [14] to [16] as of no relevance to the exercise of the discretion to reject the admission of the Draper Note. It has no bearing on either the probative value or prejudicial effect of the admission of the statements in the Draper Note. The evidence as to the procedural history is relevant to the issue of whether, in the circumstances, the Mercy Parties have been denied procedural fairness. In my view, they have not. There were on notice from the date on which the action was commenced in 2019 that the 21 September 2016 meeting was in issue and that its (or its former) employee Ms Draper attended it.
It is instructive at this point in the analysis to refer to the relevance of the Draper Note to the issues in dispute. As mentioned, the ACK Parties contend that Mercy breached the terms of the SPA relating to the Deferred Payment. A central part of their argument is an allegation that Mercy departed from the policy of ACK to prioritise and pursue bonded residents over concessional residents in favour of a policy of increasing the proportion of concessional residents. This in turn had the effect of reducing the amount of Bonds to below the level at which the Deferred Payment clause was activated. In that context, in the most recent version of the statement of claim filed 4 September 2025, the ACK Parties plead:
19.At a meeting of, among others, the management staff of Mercy held six days prior to Completion, on 21 September 2016, Mercy's Director of Residential Care, Margaret Ingleton, informed all present that:
(a)she was responsible for reviewing the admission of future residents into the Business Facilities; and
(b)when Mercy took over the Business Facilities, 40% of future residents admitted would be Concessional Residents.
Particulars
The attendees at the meeting included Margaret Draper and Nicholas Shao.
An allegation to the same effect was in the statement of claim filed with the writ on 11 September 2019 (par 17).
Evidence Act
The relevant portions of EA s 79C are as follows:
79C. Documentary evidence, admissibility of
(1)Subject to subsection (2), in any proceedings where direct oral evidence of a fact or opinion would be admissible, any statement in a document and tending to establish the fact or opinion shall, on production of the document, be admissible as evidence of that fact or opinion if the statement -
(a)was made by a qualified person….
(2)Where a statement referred to in subsection (1) is made by a qualified person or reproduces or is derived from information in a statement made by a qualified person, that person must be called as a witness unless…-
(a)he is dead; or
…
(2a)Notwithstanding subsections (1) and (2), in any proceedings where direct oral evidence of a fact or opinion would be admissible, any statement in a document and tending to establish the fact or opinion shall, on production of the document, be admissible as evidence of that fact or opinion if -
(a)the statement is, or directly or indirectly reproduces, or is derived from, a business record; and
(b)the court is satisfied that the business record is a genuine business record.
(2b)Where a statement referred to in subsection (2a) is made by a qualified person that person shall not be called as a witness unless the court orders otherwise.
(3)This section makes a statement admissible notwithstanding -
(a)the rules against hearsay; or
(b)the rules against secondary evidence of the contents of a document; or
(c)that the person who made the statement or the person who made a statement from which the information in the statement is reproduced or derived is a witness in the proceedings, whether or not he gives evidence consistent or inconsistent with the statement; or
(d)that the statement is in such a form that it would not be admissible if given as oral evidence,
but does not make admissible a statement which is otherwise inadmissible.
…
(5)For the purposes of this section a court may -
(a)for the purpose of deciding whether or not a statement is admissible as evidence, draw any reasonable inference from the form of contents of the document in which the statement is contained, or from any other circumstances.
…
(6)For the purposes of this section a court may, in its discretion, reject a statement notwithstanding that the requirements of this section are satisfied with respect thereto, if the court is of the opinion that the probative value of the statement is outweighed by the consideration that its admission or the determination of its admissibility -
(a)may necessitate undue consumption of time; or
(b)may create undue prejudice, confuse the issues …
Is the Draper Statement admissible pursuant to EA s 79C(1)(a)?
The phrase 'qualified person' is relevantly defined in E s 79B in the following terms:
qualified person, in relation to a statement, means a person who -
(a)had, at the time of making of the statement, or may reasonably be supposed to have had at that time, personal knowledge of the matters dealt with by the statement …
Counsel for the Mercy Parties did not take issue with the conclusion that Ms Draper had, at the time of making of the statement, or may reasonably been supposed to have had at that time, personal knowledge of the matters dealt with by the statement. That concession is properly made. It is a reasonable inference from the contents of the Draper Note.
Likewise, with one caveat, counsel for the Mercy Parties accepted that, had Ms Draper been alive, she could have given direct oral evidence about the factual issues set out in the Draper Note. The caveat is that the ACK Parties did not file a statement of intended evidence from Ms Draper. However, as a matter of law, Ms Draper could, had she been alive and called, have given direct oral evidence about the factual issues set out in the Draper Note.
The effect is that the Draper Note is admissible pursuant to EA s 79C(1)(a), subject to the exercise of the discretion to reject in EA s 79C(6).
Is the Draper Note admissible pursuant to EA s 79C(2a)?
The phrase 'business record' is also defined in EA s 79B, as follows, along with the associated definition of 'business':
business means any business, occupation, trade or calling and includes the business of any governmental body or instrumentality and of any local government;
business record means a book of account or other document prepared or used in the ordinary course of a business for the purpose of recording any matter relating to the business;
It is not in issue that Belrose Care was a 'business' so defined.
The principles in relation to what constitutes a 'business record' may be summarised in the following propositions:
(a)the business records legislation is remedial legislation intended to remove the difficulty or, in some instances, impossibility of proving certain business facts by admitting a material which in common experience is likely to be accurate, and should be construed liberally and not pedantically;[5]
(b)adopting a liberal and non-pedantic construction of the words, the notion of 'recording any matter relating to the business' is qualitatively different from the notion of making a 'record' relating to the business - in its more expansive sense, the reference to recording embodies broadly the preservation of things in writing as knowledge or information, rather than the notion of the written preservation for some more formal, internal or official process;[6]
(c)on the other hand, in construing the definition of a 'business record' it is relevant to take account of the statutory consequence of a document being a business record which is that the document will be admissible as evidence of the truth of its contents and that will be so notwithstanding the document is second hand hearsay;[7]
(d)s 79C(2a) makes 'statements' in a document admissible and does not make the document itself admissible - so existence of an admissible statement in a document therefore does not make the balance of the document admissible, if it is otherwise inadmissible;[8] and
(e)the preparation or use of the document must have been for the purpose of recording any matter relating to the business, though it need not be the sole or even the dominant purpose; it is enough that it is a substantial purpose.[9]
[5] Cavill v The State of Western Australia [2008] WASCA 108 [208] (Miller JA) (Cavill); Donohoe v Director of Public Prosecutions(WA) [2011] WASCA 239; (2011) 215 A Crim R 1 [126] (Buss JA) (Donohoe).
[6] Rhodes v De Castro [No 2] [2023] WASC 93 [40] (Solomon J) (Rhodes).
[7] McKay v Commissioner of Main Roads[No 2] [2010] WASC 153 [33] (Beech J) (McKay).
[8] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 23] [2023] WASC 380 [11] (Smith J) (Wright); Donohoe [125] (Buss JA).
[9] Wright [14]; Rhodes [28] ‑ [30] (Solomon J).
In considering whether a document was prepared or used in the 'ordinary course' of the business, the observations of Hope JA in Allbrighton v Royal Prince Albert Hospital as to the equivalent provisions in the NSW legislation are an important starting point:[10]
… Pt IIC, of which s 14CE is the core, has extended the common law rules of evidence in a way which is of great importance in the search for truth. Any significant organization in our society must depend for its efficient carrying on upon proper records made by persons who have no interest other than to record as accurately as possible matters relating to the business with which they are concerned. In the every-day carrying on of the activities of the business, people would look to, and depend upon, those records, and use them on the basis that they are most probably accurate.
[10] Albrighton v Royal Prince Albert Hospital [1980] 2 NSWLR 542, 548 - 549 (Hope JA with whom Reynolds and Hutley JJA agreed) (Allbrighton).
Counsel for the ACK Parties referred to the decision in Soia v Bennett [No 4].[11] In that case, the document sought to be admitted as a business record was a letter of resignation by three former employees of a company by the name of Internet Tuition College Pty ltd (ITC). It contained a list of 49 dates over an 8 month period describing various events that have alleged to have occurred relation to the relationship between the employees and the plaintiff, Mr Soia. Only one of the three employees gave evidence at the trial. The defendant, Mr Bennett who was a director of ITC, sought to have the document admitted as a business record. Commissioner Sleight accepted that the letter was a business record, saying:[12]
In this case, MFI 73 was prepared at the request of Mr Bennett, who was a director of ITC. Evidence was given during the trial that Mr Bennett was the director responsible for most of the administrative functions of ITC including dealing with staff issues such as payment of wages etc. In my view, the letter produced was a document used in the ordinary course of business for the purposes of recording a matter relating to the business.
[11] Soia v Bennett [No 4] [2012] WASC 292 (Soia).
[12] Soia [19].
However, the Commissioner went on to reject the tender of the document in the exercise of the discretion, concluding that 'the probative value of the statements contained in the letter are outweighed by the consideration that their admission may create undue prejudice'.[13] As to the reasons for doing so, the Commissioner applied the principles set out by Beech J in McKay[14] (referred to below) and observed:[15]
In this matter, I take into account the following matters:
(i)The letter of 9 October 2000 contains a very detailed account of incidents between Mr Soia and the staff which was prepared largely from the detailed notes of Mr Andrew Posa. To allow the letter to be admitted as evidence of the matters contained in the letter without Mr Andrew Posa being called and subjected to cross‑examination is potentially unfair to the plaintiffs. The unavailability of Mr Andrew Posa for cross‑examination is a relevant consideration (see Tobias v Allen [1957] VR 221, 225). The extent that counsel for the plaintiffs might have cross‑examined Mr Andrew Posa is difficult to assess. Although Mr Emery was not cross‑examined about his evidence concerning the behaviour of Mr Soia and his relationship with staff, this does not mean that counsel appearing for the plaintiffs would not have cross‑examined Mr Andrew Posa about the detailed recording of incidents that is contained in the letter of 9 October 2000.
(ii)Further, the probative value of the contents of the document is reduced by the fact that the primary author, Mr Andrew Posa is not available for questioning and his notes have not been produced.
(iii)Further, although the defendant called Mr Emery, a joint signatory to the letter, his evidence‑in‑chief as contained in his witness statement did not seek to address with particularity the contents of the letter of 9 October 2000. Rather, he gave evidence of a more general description concerning Mr Soia's behaviour and his relationship with the staff. During the trial I made an oral ruling that Mr Emery could not be asked whether the contents of the letter was correct and thus simply adopt its content, but he could be asked questions taking him through the alleged incidents and asking him to give his evidence in relation to each such incident. This was not done
(iv)Further, I take into account that excluding of the contents of the letter dated 9 October 2000 has not prevented the defendant from adducing further evidence of the behaviour of Mr Soia and his relationship with the staff. As I have mentioned, Mr Emery covered this issue in his evidence‑in‑chief. Further, the defendant also called Ms Rosalinde Miles, who was employed as a casual typist at ITC, and was able to give evidence about her observations concerning Mr Soia's behaviour and relationship with the staff. Further, the defendant did not call Mr Mark Posa, who had provided a witness statement.
(v)Finally, the defendant called Mr Emery, one of the persons who was a signatory to the letter, without seeking an order from the court to do so pursuant to s 79C(2b). This subsection provides that a qualified person who makes a statement in a business record shall not be called as a witness unless the court orders otherwise. This section appears to be based upon the rationale that, if the person is called, the factual material contained in the document should be the subject of oral evidence rather than the document.
[13] Soia [28].
[14] McKay [73] –[78] (Beech J).
[15] Soia [27].
Counsel for the ACK Parties also referred to the decision in Feltafield Pty Ltd v Heidelberg Graphic Equipment.[16] That decision concerned the application of the business records rules in the broadly equivalent provisions of the Evidence Act 1898 (NSW) and the Evidence Act 1905 (C'th). The document in issue were notes of a meeting made by a manager of the third defendant which were attached to his witness statement. Beazley J found that the notes were business records:[17]
Counsel for the respondent alleged that the notes comprised a 'one-off' record which were not part of a system of notetaking within a business. He submitted that their 'one-off' nature deprived them of the essential character of a business record.
Typically, a business brings many records into existence. Some of those records, indeed it may be most, are likely to be part of the systematic record keeping of the business - the keeping of postage books, stock records or accounting records are classic examples. However, the phrase 'record of a business' in s 14B [Evidence Act 1898 (NSW)] of the is a descriptive term and is not confined to any particular category of document. This was recognised in Atra v Farmers & Graziers Co-op Co Ltd (1986) 5 NSWLR 281 where Wood J stated at 288 that:
' … the term 'record of a business' denotes documents which truly might be regarded as the internal records kept by or for that company in respect of its business such as its books of account, ledgers, employment records, stock records, postage books, its own correspondence, internal memoranda, and so on.'
Counsel for the applicant conceded that the notes were properly described as an internal memorandum of a business. In my opinion a record brought into existence once only in a business, is not deprived of the quality of a 'record of a business' merely because the typical example of a business record is one which is part of systematic record keeping of a business involving more than a single document. In this case, the notes were brought into existence in respect of a matter relating to the affairs of the Jack group of companies. by an employee of the group, during the course of a meeting which related to the operation of a piece of machinery used in the business. In my opinion, the notes are a record of a business and fall within the provisions of s 7B of the Evidence Act (Cth).
The note in issue (to the extent admitted) is set out at the conclusion of the decision. It contains in detail statements made by participants at the meeting.
[16] Feltafield Pty Ltd v Heidelberg Graphic Equipment (1995) 56 FCR 481 (Feltafield).
[17] Feltafield (483) - (484).
The issue of a one-off document was also considered by the Court of Appeal in Zerjavic v Chevron Australia Pty Ltd. [18] The document in issue was a letter from Sonic Health to the District Court. The letter contained answers to some questions set out by the appellant in the subpoena. The Court of Appeal did not disturb the find of the trial judge that the document was not a business record, observing:[19]
The appellant's submissions went no further than to contend that the Sonic Health letter was relevant stating that it was a letter of 'significant importance'… There was no attempt to explain how, given that the statement relied on plainly offended the rule against hearsay, the letter was a business record and thus admissible in accordance with the exception in s 79C(2a) of the Evidence Act. There was no proper basis for contending that the letter was a business record within the definition set out in s 79B of the Evidence Act. The letter was a one-off piece of correspondence sent to the District Court in answer to a subpoena rather than a document prepared or used in the ordinary course of business for the purpose of recording any matter relating to the business. The primary judge was correct to reject the tender of the Sonic Health letter on the basis that it was not a business record.
Those observations are apposite to the present case.
[18] Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40 (Zerjavic).
[19] Zerjavic [146].
In my view, the Draper Note was not prepared in the 'ordinary' course of the business of Belrose. It is not a document of the type described by Hope JA in Allbrighton, being 'proper records made by persons who have no interest other than to record as accurately as possible matters relating to the business with which they are concerned'.[20] Nor can it be described as 'material which in common experience is likely to be accurate'.[21] It may be contrasted to the formal minutes of the 21 September 2016 meeting (which are also in evidence). It may further be contrasted to a file note made by Ms Draper, at or after the meeting, for her own benefit recording everything discussed at the meeting (of the kind made by the witness in Feltafield). It was a bespoke or one-off document, prepared at the specific request of Mr Markoff. It is a reasonable inference from the contents of the Draper Note, in the context of the evidence which I have heard to date in this trial, that it was requested, and thus prepared, intending to be used by Mr Markoff in the adversarial context of a potential claim of exactly the kind that has been made. There is no other reasonable inference as to why it was prepared. There is nothing 'ordinary' about the circumstances in which it was prepared.
[20] Allbrighton 548 - 549.
[21] Cavill [208].
Should the court reject the Draper Statement on discretionary grounds?
The nub of the concern expressed by counsel for the Mercy Parties is that the prejudice which the admission of the Draper Note would create would significantly outweigh its probative value.
In Greenaway v The State of Western Australia the Court of Appeal made the following observations as to the manner in which the discretion in EA s 79C(6) is to be applied:[22]
The formation of the opinion referred to in s 79C(6) is a condition for the existence of the discretion conferred by that subsection. Forming that opinion requires the court to take three steps in a jury trial where it is not suggested that the admission of the evidence or the determination of its admissibility may necessitate undue consumption of time. First, the court must assess the probative value of the statement sought to be admitted. Second, the court must identify whether the admission of the evidence may create undue prejudice, confuse the issues or mislead the jury. Third, it is necessary to assess whether the probative value of the evidence is outweighed by any undue prejudice, confusion of the issues or misleading effect which its admission may create.
This overall approach is apposite to a civil trial before a judge, though issue like confusion or misleading effect have a different weighting than in a trial before a jury.
[22] Greenaway v The State of Western Australia [2022] WASCA 166 [326] (judgment of the court) (Greenaway).
The principles relevant to the exercise of discretion under s 79C(6) are well settled. They were helpfully summarised by Beech J in McKay (references omitted):[23]
[23] McKay [72] - [78].
The principles relevant to the exercise of discretion under s 79C(6) are not in dispute.
The starting point is that it is a discretion to reject. Thus once the requirements of the section are otherwise satisfied, the prima facie position is that the statement is to be admitted. The discretion to reject only arises if the court forms the opinion that the probative value of the statement is outweighed by, relevantly, the consideration that its admission may necessitate undue consumption of time or may create undue prejudice.
In considering whether any undue prejudice exists, regard must be had to the interests of both parties to the proceedings…
Relevant 'undue prejudice' may be suffered by a party who is unable to cross‑examine a witness…
The prejudice suffered by the party who is seeking to tender the document, if that document is not admitted, must also be considered….
In this case, the prejudice to the plaintiffs in refusing to admit the report lies in the absence of the benefit of whatever probative value the report may have had. The extent of that prejudice must be considered taking account of whether, and to what extent, matters dealt with in the report can be the subject of cross‑examination of witnesses and submissions.
Other factors that may be relevant to the exercise of the discretion include:
(a)The extent to which the statement in the document is ambiguous and requires clarification or explanation…
(b)whether the statement was prepared by the tendering party's lawyers as a witness statement and was intended for use by them in an adversarial context…
(c)whether the statement seeks to provide evidence of a central issue in the case and
(d)whether the other party is or is not in a realistic position to controvert the proposed evidence by firsthand evidence of their own….
The discretionary factors identified by Beech J best considered in the context of the three questions identified by the Court of Appeal in Greenaway.
I begin with assessing the probative value of the statements in the Draper Note. These statements, in particular the first line, are evidence relevant to a central issue in the case, being the proof of the allegation which I have set out at [19], and so have probative value. I accept that the fact that the statements in the Draper Note go to an important part of the case of the ACK Parties demonstrates the prejudice that they would suffer if not permitted to tender the document.[24] However, it is difficult to characterise this prejudice as being significant. This is because, for two reasons, the probative value of the statements in the Draper Note is minimal.
[24] Commissioner of Australian Federal Police v Li [No 2] [2018] WASC 359 [44] (Archer J).
The first is that the Draper Note is not a business record; it was not a document prepared by a person who had no interest other than to record as accurately as possible matters relating to the business with which they are concerned. It is not material which in common experience is likely to be accurate. It does not have the inherent probative value of a document prepared in the ordinary course of a business when there is no suggestion of it being used in the resolution of a potential dispute. Rather, the Draper Note was prepared at the request of Mr Markoff. As mentioned, the other evidence before me leads me to readily infer that the Draper Note was intended for use by Mr Markoff in the adversarial context of a potential claim of exactly the kind that has been made.
When Beech J in McKay referred to 'whether the statement was prepared by the tendering party's lawyers as a witness statement and was intended for use by them in an adversarial context', his Honour cited the decision of Vickery J in Shmee Pty Ltd v Bresam Investments Pty Ltd, specifically the following passage:[25]
However, in the exercise of my discretion, I also cannot ignore the fact that the statement was prepared by the plaintiff's lawyers as a witness statement and was intended for use by them in the adversarial context of this hard fought litigation. Even though the legislation contemplates the admissibility of documents under s.55(4), which may not be completely impartial, this nevertheless may in the appropriate case be a factor in the rejection of the statement in the exercise of the discretion conferred by s.55(9). In this case the statement seeks to provide evidence of a central issue in the case. It contains nothing adverse to the parties seeking to admit the evidence, namely the plaintiffs, nor does it contain anything which on its face could assist the defendants. It is not only what is contained in the statement which must be considered in this case.
The concern expressed is magnified with the Draper Note. At least a witness statement would be prepared in accordance with the ethical obligations contained in the Legal Profession UniformLaw Australian Solicitors' Conduct Rules 2015 (WA) (r 24) and the Legal Profession Uniform Conduct (Barristers) Rules 2015 (WA) (rr 69 to 71). Mr Markoff was under no such ethical obligations.
[25] Shmee Pty Ltd v Bresam Investments Pty Ltd [2008] VSC 291 [21] (Vickery J).
The second reason is that the Mercy Parties will not have the opportunity to cross-examine Ms Draper. Mr Shao, who also attended the meeting referred to in the Draper Note, was the subject of extensive cross-examination by counsel for the Mercy Parties, including on an email which is said to be inconsistent with his testimony. Counsel for the ACK Parties also had the opportunity to cross-examine Ms Ingelton on her recollection of the meeting. Counsel for the Mercy Parties identified a number of issues that would have been addressed in cross-examination in relation to the first sentence in the Draper Note:
(a)the accuracy of what is recorded compared with what Ms Draper could have recalled, the minutes of the meeting and the (contrary) evidence of Ms Ingelton;
(b)the ambiguity of the first statement, including whether it was just in relation to the existing facility operated by Mercy, or in relation to one facility or over what time;
(c)how it was to be implemented.
In relation to the last sentence of the Draper Note, there could have been cross-examination on whether there was a discussion about which questions were to be directed to Ms Ingelton or whether the questions were also to be run past Mr Shao. These are all important issues in assessing the weight to be given to the statements in the Draper Note. I regard the statements in the Draper Note as at least requiring clarification or explanation.
In my view, the fact that the statements in the Draper Note cannot be tested by cross-examination makes it difficult for me to place any meaningful weight on them. This reflects the same concern as identified by Commissioner Sleight in Soia which I have quoted at [30].
I turn next to the issue of whether the admission of the Draper Note may create undue prejudice, it being accepted that the remainder of the exclusionary considerations in EA s 79C(6) do not apply. The corollary of my analysis that the Draper Statement is probative, but of minimal weight, means that it is difficult for the Mercy Parties to assert that they would be unduly prejudice by the admission of the statements in the Draper Note. Rather, the prejudicial effect of the admission of the statements in the Draper Note would also, axiomatically, be minimal. I add that Mercy Parties called Ms Ingelton, so were in a 'realistic position to controvert the proposed evidence by firsthand evidence of their own'.
The leaves the third issue, being to assess whether the probative value of the evidence is outweighed by any undue prejudice which its admission may create. My analysis so far is that the statements in the Draper Note have both minimal probative value and minimal prejudicial effect. That being so, there is no basis for me to conclude that the probative value of the evidence is outweighed by any undue prejudice which its admission may create, and I do not do so.
I am left with the position that the Mercy Parties have not moved me to exercise my discretion to reject the Draper Note. So I will not reject its admission. However, I reiterate that the statements it contains have minimal probative value.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OB
Associate to the Hon Justice Gething
8 OCTOBER 2025
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