Australian Securities and Investments Commission v Flugge (No 10)
[2015] VSC 690
•3 December 2015
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE | Not Restricted |
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2007 10077
IN THE MATTER OF AWB LIMITED (ACN 081 890 459)
BETWEEN:
| AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION | Plaintiff |
| v | |
| TREVOR JAMES FLUGGE | Defendant |
- AND -
S CI 2007 10081
IN THE MATTER OF AWB LIMITED (ACN 081 890 459)
BETWEEN:
| AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION | Plaintiff |
| v | |
| PETER ANTHONY GEARY | Defendant |
---
JUDGE: | ROBSON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23, 24, 25, 26 and 30 November 2015 | |
DATE OF RULING: | 3 December 2015 | |
CASE MAY BE CITED AS: | ASIC v Flugge & Geary (Ruling No 10) | |
MEDIUM NEUTRAL CITATION: | [2015] VSC 690 | First revision: 14 February 2019 |
---
EVIDENCE — Admissibility of solicitors’ notes under s 69 of the Evidence Act 2008 (Vic) (the Act) — Whether notes form part of a business record — Whether it can reasonably be supposed solicitors intended to assert various facts from their notes — Whether maker of the representation had personal knowledge of the asserted fact — Whether representation was made on the basis of information supplied under s 69(2)(b) of the Act — Whether such evidence is relevant under ss 55 and 58 of the Act — If relevant, whether evidence should be excluded under s 135 of the Act.
EVIDENCE — Admissibility of solicitors’ notes under s 64 of the Act.
EVIDENCE — Admissibility of solicitors’ notes and transcript of evidence from a related proceeding under s 63 of the Act — Admissibility of affidavit under s 63 of the Act — Whether party not available to give evidence pursuant to Pt 2, Cl 4(1)(f) in Dictionary to the Act — Whether all reasonable steps have been taken to secure attendance.
EVIDENCE — Admissibility of foreign language document under s 69 of the Act — Whether document is a business record — Whether evidence should be excluded under s 135 of the Act.
EVIDENCE & CIVIL PROCEDURE — Admissibility of documents related to claims not pleaded against a party.
EVIDENCE — Admissibility of extracts of the Cole Commission Inquiry report for a non-hearsay purpose under s 60 of the Act.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N J O’Bryan AM SC with Mr J P Moore QC, Mr C H Truong and Ms C E Klemis | Australian Securities and Investments Commission |
| For the Defendant in S CI 2007 10077 | Mr S K Dharmananda SC, with Mr R F R Pintos-Lopez | Corrs Chambers Westgarth |
| For the Defendant in S CI 2007 10081 | Mr I D Hill QC with Mr A Tragardh | Galbally Rolfe |
HIS HONOUR:
At the conclusion of leading oral evidence in the proceedings against Mr Flugge and Mr Geary, ASIC sought to tender 10 categories of documentary evidence. The tender was objected to by Mr Flugge and Mr Geary. As events transpired, the parties were able to reach agreement on three categories of documents.
After extensive argument over some five days of hearing, on 3 December 2015 I made my rulings on the seven outstanding categories. I now provide my reasons for the rulings. The ruling made appears at the conclusion of my reasons.
Category 1: ASIC tender of Zwier notes under s 69
ASIC seeks to tender notes of a conference made by Mr Zwier on 28 February 2005 under s 69 of the Evidence Act 2008 (Vic) (the Act). Mr Zwier was a member of the firm Arnold Bloch Leibler (ABL), which along with Blake Dawson and Minter Ellison were acting for AWB in relation to matters concerning AWB’s involvement in the United Nations’ (UN) Oil for Food programme (OFFP).
The notes were made during a conference of 28 February 2005, attended by Mr Zwier, his legal partner, Ms Thompson, Mr Jim Cooper, AWB’s general legal counsel, with Mr Flugge and Mr Quennell participating via telephone. Mr Quennell was from Blake Dawson.
Both Mr Zwier and Ms Thompson took notes of this meeting. Mr Zwier identified both his notes and Ms Thompson’s notes.
Under cross-examination by counsel for Mr Flugge, Mr Zwier agreed that in or around February 2005, ABL was engaged by AWB to conduct an investigation for the purpose of advising AWB about its involvement in the UNs’ OFFP. He was asked whether that was in part as a result of an enquiry that the UN was conducting at the time. He said he ‘thought it was connected to it, yes.’
ASIC contends that the notes were made prior to the UN Independent Inquiry Committee (‘IIC’ or ‘Volcker Inquiry’) inquiry into the trucking fees. ASIC contends that Mr Zwier’s notes are a business record.
The typed version of the notes (which Mr Zwier deposed was accurate) is as follows:[1]
[1]CB 7/4736-11.
ASIC seeks to lead this evidence that Mr Flugge knew of the payment of the trucking fee whilst he was chairman of AWB. Mr Flugge ceased his office as a director in March 2002 and was engaged by AWB thereafter, from time to time, as a consultant.
ASIC alleges that Mr Zwier’s notes are evidence of 11 asserted facts set out below in the table appearing at paragraph 29. ASIC seeks to tender the notes as business records under s 69 of the Act and in the alternative, s 64. I first deal with the submissions relating to s 69.
ASIC says that the evidence in Mr Zwier’s notes is relevant to prove Mr Flugge’s knowledge. If the statements were made by Mr Flugge, there is no record of Mr Flugge being asked how he acquired the knowledge.
Mr Flugge submits that the evidence is unintelligible and, as such, the evidence could not rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. Mr Flugge says that the notes are not admissible as, being unintelligible, the evidence is not relevant under s 55 of the Act.
Section 55 of the Act provides:
Relevant evidence
(1)The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.
(2)In particular, evidence is not taken to be irrelevant only because it relates only to—
(a) the credibility of a witness; or
(b) the admissibility of other evidence; or
(c) a failure to adduce evidence.
Mr Flugge also contends that there is no evidence to support the assertion that he made the statements as alleged.
Mr Flugge further submits that even if the evidence is admissible under s 69, I ought to refuse to admit the evidence because its probative value[2] was substantially outweighed by the danger that the evidence might be unfairly prejudicial or misleading or confusing under s 135 of the Act.
[2]Defined in Part 1 of the dictionary of the Act: ‘probative value of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue.’
Section 135 provides:
General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might–
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time; or
(d)unnecessarily demean the deceased in a criminal proceeding for a homicide offence.
The admission of hearsay evidence in business records
In Addenbrooke Pty Ltd v Duncan (No 5),[3] Foster J of the Federal Court of Australia considered whether certain representations contained in printouts of emails should be admitted into evidence as business records pursuant to s 69 of the Evidence Act 1995 (Cth). For all relevant purposes the provisions referred to below are the same as those in the Act.
[3][2014] FCA 625 (‘Addenbrooke’).
Before considering the application in question, Foster J set out the relevant legislation and discussed the relevant test to be applied in determining whether the emails were admissible. I set out this portion of Foster J’s judgment as follows:[4]
[4]Addenbrooke, [13]–[34].
THE RELEVANT PROVISIONS OF THE ACT [Evidence Act 1995 (Cth)]
Chapter 3 of the Act (which comprises s 55–s 139) contains the statutory rules which govern the admissibility of evidence in this Court.
Under the heading “Introductory Note”, the draftsman has set out a brief summary of Pt 3.1–Pt 3.11 of the Act. There is then set out a diagram which is designed to demonstrate how Ch 3 applies to particular evidence.
That diagram provides a guide through Ch 3. According to that diagram, the first ground for excluding evidence is that the evidence sought to be tendered is not relevant. Section 55 of the Act defines relevant evidence. Section 56 of the Act provides that, except as otherwise provided by the Act, evidence that is relevant in a proceeding is admissible in that proceeding and evidence that is not relevant in that proceeding is not admissible.
According to the diagram, the next exclusionary rule is the hearsay rule. That is, evidence which is relevant but which offends the hearsay rule is not admissible.
Part 3.2 of Ch 3 of the Act deals with the hearsay rule and the statutory exceptions to that rule.
As I have already mentioned, most of the objections taken to the contested documents are based upon the proposition that all of the previous representations sought to be proven by the tender of those documents are hearsay and thus not admissible.
The hearsay rule is found in s 59 of the Act which is in the following terms:
59 The hearsay rule—exclusion of hearsay evidence
(1) Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation.
(2) Such a fact is in this Part referred to as an asserted fact.
(2A) For the purposes of determining under subsection (1) whether it can reasonably be supposed that the person intended to assert a particular fact by the representation, the court may have regard to the circumstances in which the representation was made.
Note:Subsection (2A) was inserted as a response to the decision of the Supreme Court of NSW in R. v Hannes (2000) 158 FLR 359.
(3) Subsection (1) does not apply to evidence of a representation contained in a certificate or other document given or made under regulations made under an Act other than this Act to the extent to which the regulations provide that the certificate or other document has evidentiary effect.
Note:Specific exceptions to the hearsay rule are as follows:
• evidence relevant for a non hearsay purpose (section 60);
• first hand hearsay:
–civil proceedings, if the maker of the representation is unavailable (section 63) or available (section 64);
–criminal proceedings, if the maker of the representation is unavailable (section 65) or available (section 66);
• contemporaneous statements about a person’s health etc. (section 66A);
• business records (section 69);
• tags and labels (section 70);
• electronic communications (section 71);
• Aboriginal and Torres Strait Islander traditional laws and customs (section 72);
• marriage, family history or family relationships (section 73);
• public or general rights (section 74);
• use of evidence in interlocutory proceedings (section 75);
• admissions (section 81);
• representations about employment or authority (subsection 87(2));
• exceptions to the rule excluding evidence of judgments and convictions (subsection 92(3));
• character of and expert opinion about accused persons (sections 110 and 111).
Other provisions of this Act, or of other laws, may operate as further exceptions.
Examples:
(1) D is the defendant in a sexual assault trial. W has made a statement to the police that X told W that X had seen D leave a night club with the victim shortly before the sexual assault is alleged to have occurred. Unless an exception to the hearsay rule applies, evidence of what X told W cannot be given at the trial.
(2) P had told W that the handbrake on W’s car did not work. Unless an exception to the hearsay rule applies, evidence of that statement cannot be given by P, W or anyone else to prove that the handbrake was defective.
(3) W had bought a video cassette recorder and written down its serial number on a document. Unless an exception to the hearsay rule applies, the document is inadmissible to prove that a video cassette recorder later found in D’s possession was the video cassette recorder bought by W.
Section 60 of the Act provides for an exception to the hearsay rule where the tender of the evidence is for a non-hearsay purpose.
All of the previous representations sought to be tendered in the present case by the tender of the contested documents are hearsay and are, for that reason, not admissible unless the plaintiff can engage one or more of the exceptions to the hearsay rule provided for in Pt 3.2 of the Act. As a fallback position, Senior Counsel for the plaintiff submitted that, at the very least, the previous representations in contest ought to be admitted for a non-hearsay purpose (as to which see s 60 of the Act). However, the real value of the evidence is not so restricted. For this reason, unless the plaintiff can bring the evidence of the previous representations contained in the contested documents within one of the exceptions to the hearsay rule, the evidence of those representations will be inadmissible (except for a non-hearsay purpose). I pause to observe that it is only the previous representations made in the emails (category (a) referred to at [5] above) which could conceivably be admitted into evidence for a non-hearsay purpose. Admitting into evidence the representations made in all of the other documents for a non-hearsay purpose would be of no value in the case. None of those representations has any relevance if admitted only for a non-hearsay purpose.
The exception to the hearsay rule relied upon by Senior Counsel for the plaintiff is the exception provided for in s 69 of the Act (the business records exception).
Section 69 of the Act provides:
69 Exception: business records
(1) This section applies to a document that:
(a) either:
(i) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or
(ii) at any time was or formed part of such a record; and
(b) contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business.
(2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made:
(a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or
(b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.
(3) Subsection (2) does not apply if the representation:
(a) was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding; or
(b) was made in connection with an investigation relating or leading to a criminal proceeding.
(4) If:
(a) the occurrence of an event of a particular kind is in question; and
(b) in the course of a business, a system has been followed of making and keeping a record of the occurrence of all events of that kind;
the hearsay rule does not apply to evidence that tends to prove that there is no record kept, in accordance with that system, of the occurrence of the event.
(5) For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person’s knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact).
Note 1:Sections 48, 49, 50, 146, 147 and subsection 150(1) are relevant to the mode of proof, and authentication, of business records.
Note 2:Section 182 gives this section a wider application in relation to Commonwealth records.
Section 71, which addresses certain formal matters is also relevant.
When engaged, the business records exception to the hearsay rule will allow into evidence a previous representation made in a document if:
(a) The document forms or, at any time, formed, part of the records of a business (s 69(1)(a));
(b) The relevant previous representation was made or recorded in the document in the course of, or for the purposes of, the business (s 69(1)(b));
(c) By the relevant previous representation a person asserted one or more facts (s 59 and s 69(2));
(d) The person who made the relevant previous representation had, or might reasonably be supposed to have had, personal knowledge of the fact or facts asserted by the representation (s 69(2)(a) and s 69(5));
(e) Or, alternatively to (d), the person who made the relevant previous representation made the representation upon the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the fact or facts asserted by the representation (s 69(2)(b) and s 69(5));
(f) For the purposes of s 69(1) and s 69(2), a person is taken (ie should be presumed) to have had personal knowledge of a fact if the person’s knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation by a person about the fact) (s 69(5)); and
(g) For the purpose of deciding whether s 69 is engaged in relation to a previous representation made in a document, the Court is entitled to examine the document and to draw any reasonable inferences from it as well as from other matters from which inferences may properly be drawn (such as evidence in the case, including other documents which have already been admitted into evidence or which will be admitted into evidence without objection) (s 183).
In order properly to apply s 69 of the Act and on the assumption that the evidence is relevant, the Court must:
(a) Determine whether the document forms or, at any time, formed, part of the record of a business and otherwise satisfies s 69(1);
(b) Identify the relevant previous representation contained in the particular document which is sought to be tendered (this is usually done by Counsel for the tendering party specifically identifying the previous representation or representations the subject of the tender);
(c) Identify the fact or facts which it can reasonably be supposed that the maker of the representation intended to assert by making that representation. In order to determine what fact or facts were intended to be asserted, the Court may have regard to the circumstances in which the representation was made;
(d) Determine whether that person had the requisite personal knowledge of the fact or facts asserted by the representation or was acting upon the basis of information given to him or her by someone who had the requisite personal knowledge; and
(e) Determine (if it is relevant to do so and if the point is raised by the objecting party) whether the representation should be excluded because s 69(3) is engaged or by reason of the exercise of the Court’s discretion under s 135 or s 169 of the Act.
In light of certain submissions made on behalf of Mr Duncan, s 76 and s 78 of the Act are also relevant. Those sections are in the following terms:
76 The opinion rule
(1) Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.
(2) Subsection (1) does not apply to evidence of an opinion contained in a certificate or other document given or made under regulations made under an Act other than this Act to the extent to which the regulations provide that the certificate or other document has evidentiary effect.
Note: Specific exceptions to the opinion rule are as follows:
•summaries of voluminous or complex documents (subsection 50(3));
•evidence relevant otherwise than as opinion evidence (section 77);
•lay opinion (section 78);
•Aboriginal and Torres Strait Islander traditional laws and customs (section 78A);
•expert opinion (section 79);
•admissions (section 81);
•exceptions to the rule excluding evidence of judgments and convictions (subsection 92(3));
•character of and expert opinion about accused persons (sections 110 and 111).
Other provisions of this Act, or of other laws, may operate as further exceptions.
Examples:
(1) P sues D, her doctor, for the negligent performance of a surgical operation. Unless an exception to the opinion rule applies, P’s neighbour, W, who had the same operation, cannot give evidence of his opinion that D had not performed the operation as well as his own.
(2) P considers that electrical work that D, an electrician, has done for her is unsatisfactory. Unless an exception to the opinion rule applies, P cannot give evidence of her opinion that D does not have the necessary skills to do electrical work.
…
78 Exception: lay opinions
The opinion rule does not apply to evidence of an opinion expressed by a person if:
(a) the opinion is based on what the person saw, heard or otherwise perceived about a matter or event; and
(b) evidence of the opinion is necessary to obtain an adequate account or understanding of the person’s perception of the matter or event.
Part 3.11 of Ch 3 of the Act addresses discretionary and mandatory exclusions. Included within Pt 3.11 is s 135. Section 135 provides:
135 General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time.
Part 4.6 Div 1 governs requests to produce documents or call witnesses. Section 166 of the Act defines request for the purposes of that Division. Section 167 provides:
167 Requests may be made about certain matters
A party may make a reasonable request to another party for the purpose of determining a question that relates to:
(a) a previous representation; or
(b) evidence of a conviction of a person for an offence; or
(c) the authenticity, identity or admissibility of a document or thing.
Section 168(1) provides that a request made pursuant to s 166 must be made within 21 days of the tendering party’s giving notice of its intention to adduce the evidence of the relevant previous representations. The Court can dispense with this particular requirement (see s 168(2)).
Section 169 of the Act is in the following terms:
169 Failure or refusal to comply with requests
(1) If the party has, without reasonable cause, failed or refused to comply with a request, the court may, on application, make one or more of the following orders:
(a) an order directing the party to comply with the request;
(b) an order that the party produce a specified document or thing, or call as a witness a specified person, as mentioned in section 166;
(c) an order that the evidence in relation to which the request was made is not to be admitted in evidence;
(d) such order with respect to adjournment or costs as is just.
(2) If the party had, within a reasonable time after receiving the request, informed the other party that it refuses to comply with the request, any application under subsection (1) by the other party must be made within a reasonable time after being so informed.
(3) The court may, on application, direct that evidence in relation to which a request was made is not to be admitted in evidence if an order made by it under paragraph (1)(a) or (b) is not complied with.
(4) Without limiting the circumstances that may constitute reasonable cause for a party to fail to comply with a request, it is reasonable cause to fail to comply with a request if:
(a) the document or thing to be produced is not available to the party; or
(b) the existence and contents of the document are not in issue in the proceeding in which evidence of the document is proposed to be adduced; or
(c) the person to be called as a witness is not available.
(5) Without limiting the matters that the court may take into account in relation to the exercise of a power under subsection (1), it is to take into account:
(a) the importance in the proceeding of the evidence in relation to which the request was made; and
(b) whether there is likely to be a dispute about the matter to which the evidence relates; and
(c) whether there is a reasonable doubt as to the authenticity or accuracy of the evidence that is, or the document the contents of which are, sought to be proved; and
(d) whether there is a reasonable doubt as to the authenticity of the document or thing that is sought to be tendered; and
(e) if the request relates to evidence of a previous representation— whether there is a reasonable doubt as to the accuracy of the representation or of the evidence on which it was based; and
(f) in the case of a request referred to in paragraph (g) of the definition of request in section 166—whether another person is available to give evidence about the conviction or the facts that were in issue in the proceeding in which the conviction was obtained; and
(g) whether compliance with the request would involve undue expense or delay or would not be reasonably practicable; and
(h)the nature of the proceeding.
Note: Clause 5 of Part 2 of the Dictionary is about the availability of documents and things, and clause 4 of Part 2 of the Dictionary is about the availability of persons.
Chapter 5 of the Act deals with various miscellaneous matters. Included within Ch 5 is s 183 which is in the following terms:
183 Inferences
If a question arises about the application of a provision of this Act in relation to a document or thing, the court may:
(a) examine the document or thing; and
(b) draw any reasonable inferences from it as well as from other matters from which inferences may properly be drawn.
Note:Section 182 gives this section a wider application in relation to Commonwealth records and certain Commonwealth documents.
In Pt 1 of the Dictionary, the following definitions are relevant:
asserted fact is defined in section 59.
59 The hearsay rule—exclusion of hearsay evidence
(1) Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation.
(2) Such a fact is in this Part referred to as an asserted fact.
…
hearsay rule means subsection 59(1).
…
previous representation means a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.
representation includes:
(a)an express or implied representation (whether oral or in writing); or
(b) a representation to be inferred from conduct; or
(c)a representation not intended by its maker to be communicated to or seen by another person; or
(d) a representation that for any reason is not communicated.
Clauses 1, 6, 8 and 9 of Pt 2 of the Dictionary are also relevant. Those clauses are in the following terms:
1 References to businesses
(1) A reference in this Act to a business includes a reference to the following:
(a) a profession, calling, occupation, trade or undertaking;
(b) an activity engaged in or carried on by the Crown in any of its capacities;
(c) an activity engaged in or carried on by the government of a foreign country;
(d) an activity engaged in or carried on by a person holding office or exercising power under or because of the Constitution, an Australian law or a law of a foreign country, being an activity engaged in or carried on in the performance of the functions of the office or in the exercise of the power (otherwise than in a private capacity);
(e) the proceedings of an Australian Parliament, a House of an Australian Parliament, a committee of such a House or a committee of an Australian Parliament;
(f) the proceedings of a legislature of a foreign country, including a House or committee (however described) of such a legislature.
(2) A reference in this Act to a business also includes a reference to:
(a) a business that is not engaged in or carried on for profit; or
(b) a business engaged in or carried on outside Australia.
…
6 Representations in documents
For the purposes of this Act, a representation contained in a document is taken to have been made by a person if:
(a) the document was written, made or otherwise produced by the person;
(b) the representation was recognised by the person as his or her representation by signing, initialling or otherwise marking the document.
…
8 References to documents
A reference in this Act to a document includes a reference to:
(a) any part of the document; or
(b) any copy, reproduction or duplicate of the document or of any part of the document; or
(c) any part of such a copy, reproduction or duplicate.
…
9 References to laws
(1) A reference in this Act to a law of the Commonwealth, a State, a Territory or a foreign country is a reference to a law (whether written or unwritten) of or in force in that place.
(2) A reference in this Act to an Australian law is a reference to an Australian law (whether written or unwritten) of or in force in Australia.
In addition to the sections referred to by Foster J, reference should also be made to s 58 of the Act that also deals with relevance. Section 58 states as follows:
Inferences as to relevance
(1)If a question arises as to the relevance of a document or thing, the court may examine it and may draw any reasonable inference from it, including an inference as to its authenticity or identity.
(2)Subsection (1) does not limit the matters from which inferences may properly be drawn.
It is useful to set out once again the five elements of the test mentioned above, which I will refer to as the S 69 Test, that must be applied to determine whether hearsay evidence contained in a business record is admissible under s 69 as evidence to prove an asserted fact:[5]
In order properly to apply s 69 of the Act and on the assumption that the evidence is relevant, the Court must:
(a) Determine whether the document forms or, at any time, formed, part of the record of a business and otherwise satisfies s 69(1);
(b) Identify the relevant previous representation contained in the particular document which is sought to be tendered (this is usually done by Counsel for the tendering party specifically identifying the previous representation or representations the subject of the tender);
(c) Identify the fact or facts which it can reasonably be supposed that the maker of the representation intended to assert by making that representation. In order to determine what fact or facts were intended to be asserted, the Court may have regard to the circumstances in which the representation was made;
(d) Determine whether that person had the requisite personal knowledge of the fact or facts asserted by the representation or was acting upon the basis of information given to him or her by someone who had the requisite personal knowledge; and
(e) Determine (if it is relevant to do so and if the point is raised by the objecting party) whether the representation should be excluded because s 69(3) is engaged or by reason of the exercise of the Court’s discretion under s 135 or s 169 of the Act.
[5]Addenbrooke, [26].
It is also informative to see how Foster J dealt with the facts in one of the matters before him. It concerned the identification of the fact sought to be proved by the previous representation said to be contained in an email.
The text of the email was as follows:
Dad,
Nothing more to report other than, I sent off the draft agreements, and they are coming in to meet me and Richard at 10am.
Will update afterwards.
Foster J said:[6]
The facts intended to be asserted by the representations made in the first email (the email from James McGuigan to John McGuigan) were:
(i) At a time reasonably proximate to 7.00 pm on 2 June 2009, James McGuigan sent draft agreements to someone. Having regard to the documents to which I have already referred at [41] above, I infer that those draft agreements were drafts of the Cascade Coal landowners’ letter and the Cascade Coal equity letter. Having regard to the same documents mentioned at [41] above, I infer that the drafts of those documents were sent to Moses Obeid, Gardner Brook, Richard Poole and Greg Jones. The same drafts may have been sent to other persons.
(ii) The persons to whom the draft agreements were sent planned to meet with James McGuigan and Richard (Richard Poole) at 10.00 am on a day in the immediate future, probably the next day (3 June 2009).
[6]Addenbrooke, [42].
In finding the facts intended to be asserted, Foster J had regard to other documents in evidence. In substance, his Honour was able to flesh out what it could reasonably be supposed that James McGuigan intended to represent by the email.
Applying these principles to Mr Zwier’s notes
Turning to Mr Zwier’s notes.
ASIC submits that the notes were taken in the course of the business of ABL and thus constitutes an exception to the hearsay rule. There was no real issue that the notes were business records within the meaning of s 69 of the Act.
I accept that Mr Zwier’s notes are a business record. The notes are part of the records kept by ABL in course of its business as solicitors. The S 69 Test (a) is satisfied.
It was noted that the parties agree that the s 69(3) exception does not apply.
ASIC contends that it can reasonably be supposed that by his previous representations as contained in his notes, Mr Zwier intended to assert by his note the following facts:
FACT ASSERTED 1. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘Trucking was part of the contract we had with the Grains Board.’
2. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘I knew about trucking when we were working with Iraqis. It was fairly common to have arrangements to move grain. It was part of the deal. The Grains Board had no money to ship grain we paid.’
3. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘AWB paid the trucking company on behalf of IGB. Why would I look at it?’
4. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘Ronly was a group out of the UK that acted as an agent for AWB. Ronly was brought in to make payments for AWB.’
5. Alternatively to 1
During a discussion between Mr Zwier, Mr Cooper, Mr Quennell and Mr Flugge on 28 February 2005, one of the participants to that discussion said words to the following effect:
‘Trucking was part of the contract we had with the Grains Board.’
6. Alternatively to 2
During a discussion between Mr Zwier, Mr Cooper, Mr Quennell and Mr Flugge on 28 February 2005, one of the participants to that discussion said words to the following effect:
‘I knew about trucking when we were working with Iraqis. It was fairly common to have arrangements to move grain. It was part of the deal. The Grains Board had no money to ship grain we paid.’
7. Alternatively to 3
During a discussion between Mr Zwier, Mr Cooper, Mr Quennell and Mr Flugge on 28 February 2005, one of the participants to that discussion said words to the following effect:
‘AWB paid the trucking company on behalf of IGB. Why would I look at it?’
8. Alternatively to 4
During a discussion between Mr Zwier, Mr Cooper, Mr Quennell and Mr Flugge on 28 February 2005, one of the participants to that discussion said words to the following effect:
‘Ronly was a group out of the UK that acted as an agent for AWB. Ronly was brought in to make payments for AWB.’
9. AWB paid money to the IGB. 10. AWB paid the trucking company on behalf of IGB. 11. Ronly acted as an agent for AWB in making payments. Asserted fact 1
ASIC identified asserted fact 1 as a previous representation of Mr Zwier’s that Mr Flugge said the following statement, or words to that effect:
During a conversation with Mr Flugge on 28 February 2005 Mr Flugge stated words to the following effect:
‘Trucking was part of the contract we had with the Grains Board.’
Pursuant to element (c) of the S 69 Test, the next question I must answer is whether it can reasonably be supposed that the maker of the previous representation, Mr Zwier, intended to assert, by making the previous representation, that during a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the effect of asserted fact 1.
In answering that question I am entitled to have regard to the circumstances in which the representation was made.
On the face of the notes it is not possible to find that Mr Zwier was intending to assert that the statement was made by Mr Flugge. If one has regard to the surrounding circumstances, as described by Mr Zwier in his evidence, it is not possible to find that Mr Zwier was intending to assert that Mr Flugge made the relevant statement.
Mr Zwier deposed in his affidavit of 10 February 2015 that in or about February 2005, ABL was engaged by AWB to advise AWB in relation to matters concerning AWB’s involvement in the UN’s OFFP.[7]
[7]Exhibit MFI P34.
On or about 28 February 2005, Ms Thompson, Mr Quennell, Mr Cooper and Mr Zwier participated in a teleconference with Mr Flugge, the former chairman of AWB.
Mr Zwier was taken to his notes from the February meeting.[8] He agreed that the reason for preparing the notes was for his own use.[9] Mr Zwier was asked whether he would agree that he did not prepare the notes as a record of a conversation; being a record of what was said during the conversation or by whom. Mr Zwier said that he ‘absolutely agreed with that.’[10]
[8]Transcript of hearing, ASIC v Flugge & Geary, (18 November 2015) T1977-1988.
[9]Transcript of hearing, ASIC v Flugge & Geary, (18 November 2015), T1981, L10.
[10]Transcript of hearing, ASIC v Flugge & Geary, (18 November 2015), T1981, L17-19.
The transcript of the cross-examination of Mr Zwier records as follows:[11]
[11]Transcript of hearing, ASIC v Flugge & Geary, (18 November 2015), T1982, L2-15.
Q:You would agree, Mr Zwier, would you not, that by looking at the note, it’s not possible to tell who was speaking by reference to the note?
A:I agree with that.
Q:Given that it was an interview with Mr Flugge and to the extent that it may record some words spoken by Mr Flugge, you could not form a view as to whether it was his view at the time or at the time when he was chairman?
A:I agree. I probably wouldn’t describe it as a formal interview, I would just say it was note of a conversation.
Q:So you would agree that it’s difficult to decipher what was actually said on that call by reference to your notes?
A:From the notes it is difficult to decipher what was actually said during the course of that discussion.
ASIC relied on the fact that the notes refer to ‘Went to New York in 2000 – complained about Alia …’ ASIC says that the evidence shows that Mr Flugge went to New York in 2000 and that therefore this information most likely came from him.
This evidence does not establish that Mr Zwier identified Mr Flugge as the person who said the matters recorded in the note, nor does the note.
In my opinion, ASIC has not satisfied me that it can reasonably be supposed that Mr Zwier intended to assert by the previous representations contained in his notes that Mr Flugge made the statement alleged in asserted fact 1.
Accordingly, the previous representations in the note relied on by ASIC are not admissible under s 69 to prove asserted fact 1.
Asserted facts 2, 3 and 4
The same reasoning applies to each of asserted facts 2, 3, and 4, as applied to asserted fact 1.
Thus the previous representations contained in Mr Zwier’s notes are not admissible to prove asserted facts 2, 3 and 4 under s 69.
Asserted facts 5, 6, 7 and 8
As to the asserted facts, 5, 6, 7 and 8 each asserts that one or other of the participants said words as alleged. I will deal with each asserted fact in turn.
Asserted fact 5
ASIC relies on the previous representation contained in the note and states that Mr Zwier intended to assert by the previous representation that one or other of the participants said words during the conference to the effect:
‘Trucking was part of the contract with the Grains Board.’
Applying the test in (c) of the S 69 Test, can it be reasonably supposed that Mr Zwier intended to assert by the previous representation relied on by ASIC, that one or other of the participants said words during the conference to the effect of asserted fact 5.
As indicated above, in answering this question, I am entitled to have regard to the circumstances in which the representation was made.
Having regard to the evidence led in the trial that trucking fees were included in wheat sale contracts after June 2009, the subject matter of the conference, and who was present; in my opinion, it can be reasonably supposed that Mr Zwier intended to assert by the previous representation that one or other of the participants said words to the effect of asserted fact 5.
Applying (d) of the S 69 Test, the next issue is whether s 69(2) is satisfied: did Mr Zwier have, or might he reasonably be supposed to have had, personal knowledge of the asserted fact, being that somebody at the conference said words to the effect asserted, during the conference?
The relevant test for personal knowledge is provided in s 69(5), as copied above. Mr Zwier is taken to have had personal knowledge of the asserted fact if Mr Zwier’s knowledge of the fact was or might reasonably be supposed to have been based on what Mr Zwier saw, heard, or otherwise perceived (other than a previous representation made by a person about the fact).
I find that Mr Zwier had personal knowledge of the asserted fact, as he was present at the conference and it might reasonably be supposed that he made a note of what someone said at the conference.
Accordingly, the previous representation relied on by ASIC contained in Mr Zwier’s notes are admissible under s 69 as evidence of asserted fact 5.
Asserted fact 6
Can it be reasonably supposed that Mr Zwier intended to assert by the previous representations contained in his notes that one or other of the participants said words to the effect:
‘I knew about trucking when we were working with Iraqis. It was fairly common to have arrangements to move grain. It was part of the deal. The Grains Board had no money to ship grain we paid’?
In my opinion, it can be reasonably supposed that Mr Zwier intended to do so.
Mr Zwier has personal knowledge of the asserted fact, as he was present and presumably heard what was said and took a note of it.
The previous representation contained in Mr Zwier’s notes are admissible as evidence of asserted fact 6.
Asserted fact 7
Can it be reasonably supposed that Mr Zwier intended to assert by the previous representation contained in his notes that one or other of the participants said words to the effect:
‘AWB paid the trucking company on behalf of IGB. Why would I look at it’?
In my opinion, it can be reasonably supposed that Mr Zwier intended to do so.
Mr Zwier has personal knowledge of the asserted fact, as he was present and presumably heard what was said and took a note of it.
The previous representations contained in Mr Zwier’s notes are admissible under s 69 as evidence of asserted fact 7.
Asserted fact 8
Can it be reasonably supposed that Mr Zwier intended to assert by his notes the fact that one or other of the participants said words to the effect:
‘Ronly was a group out of the UK that acted as an agent for AWB. Ronly was brought in to make payments for AWB’?
In my opinion, it can be reasonably supposed that Mr Zwier intended to assert that fact by the representation, for the reasons discussed above.
Mr Zwier had personal knowledge of the fact as he was present, and it might reasonably be supposed that he made a note of what someone said at the conference.
The notes are admissible as evidence of asserted fact 8.
ASIC tender of Mr Zwier notes as evidence of asserted facts 9, 10 and 11
ASIC referred to asserted facts 9, 10 and 11 as underlying facts.
Asserted fact 9
Can it be reasonably supposed that Mr Zwier intended to assert by his notes the fact that AWB paid money to the IGB?
In my opinion, it cannot be reasonably supposed that Mr Zwier intended to assert that fact.
The representations contained in the notes do not disclose that they are notes of what somebody said, rather they represent that questions, or merely comments, were made by Mr Zwier of his opinions or conclusions.
Bearing in mind the circumstances in which the note was made, where Mr Zwier was taking instructions, and taking into account Mr Zwier’s evidence, which did not establish that the notes were of statements made by somebody at the conference, I am not satisfied that it could be reasonably supposed that Mr Zwier intended to assert, by his notes, the fact that AWB paid money to IGB. There is reference to money being paid to Alia, but not to the IGB.
If I am wrong, and it could be reasonably supposed that Mr Zwier, by his note, did intend to assert the fact that AWB paid money to IGB, then I must apply the test in s 69(2), set out above as (d) of the S 69 Test.
Section 69(2) prescribes the limits of the hearsay exception in relation to business records. The representation has to be made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the fact.
In Lancaster v R,[12] the Court of Appeal (Nettle and Redlich JJA and Almond AJA) said in relation to the requirement under s 69(2)(b):[13]
Fourthly, while there does not appear to be any direct authority on the meaning of ‘directly or indirectly’ in the context of s 69(2), the are cases which plainly assumed that ‘directly or indirectly’ embraces degrees of remoteness beyond second-hand hearsay, and no case which we have been able to find in which the contrary has been suggested. It is enough to render the document admissible that it may be concluded that the representation was made by or on the basis of information supplied by someone who had personal knowledge of the fact within one of the alternative descriptions in s 69(2). So long as the nature and context of the recorded representation permits that inference to be drawn, the supplier of the information need not be identified.
[12](2014) 44 VR 820 (‘Lancaster v R’).
[13]Lancaster v R, 831–832 [27].
Accordingly, even though it is not necessary for ASIC to identify the supplier of the information, ASIC has to satisfy me that the ultimate source of the asserted fact was a person who had personal knowledge of this asserted fact.
Under s 69, Mr Zwier does not need personal knowledge of the asserted fact. It is sufficient if the representation was made on the basis of information, directly or indirectly, supplied by a person who had, or might reasonably be supposed to have had, personal knowledge of the asserted fact.
Mr Zwier did not have personal knowledge of that fact. As to 69(2)(b), the relevant question is, assuming that Mr Zwier intended to assert the fact that AWB paid money to IGB, was it on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact?
I am not able to infer from the notes, and the circumstances in which the representation contained in the note was made (assuming it was made), the basis of the information on which Mr Zwier made the representation. I am unable to infer the source of the information that was the basis of the representation (assuming contrary to my finding that it was made). Thus I am unable to draw the necessary inference from the nature and context of the recorded information to apply the test in s 69(2).
If I was able to infer the source of the information that provided the basis for Mr Zwier’s representation, I may be able to infer whether or not the information was directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact (even though the ultimate source of the information need not be identified).
Accordingly, I find that the notes are not admissible as evidence of asserted fact 9.
Asserted facts 10 and 11
Can it be reasonably supposed that Mr Zwier intended to assert by his notes the fact that AWB paid the trucking company on behalf of IGB (asserted fact 10); and the fact that Ronly acted as an agent for AWB in making payments (asserted fact 11)?
The same reasoning applies to asserted facts 10 and 11 as applied to asserted fact 9.
Accordingly, I find that the notes are not admissible as evidence of asserted facts 10 and 11.
Section 135
The next question to ask is whether any admissible evidence should in any event be excluded under (d) of the S 69 Test.
As noted above, it is not argued that s 69(3) applies; however, it is submitted on behalf of Mr Flugge that the courts discretion in s 135 of the Act is enlivened to exclude the notes.
Should the notes, which are admitted as evidence of asserted facts 5, 6, 7 and 8, be excluded under s 135?
Mr Flugge contends that admission of the notes would be unfairly prejudicial and are misleading or confusing. The admitted evidence has probative value. I do not consider that the probative value is substantially outweighed by any prejudice to Mr Flugge.
I find that my discretion to exclude the evidence under s 135 of the Act is not enlivened.
Category 1: Ms Thompson’s notes tendered under s 69
The parties agree that Ms Thompson is unavailable to give evidence within the meaning of s 63 of the Act. ASIC applies under s 63 and s 69 to admit her notes as evidence.
Section 63 provides:
(1)This section applies in a civil proceeding if a person who made a previous representation is not available to give evidence about an asserted fact.
(2)The hearsay rule does not apply to—
(a)evidence of the representation that is given by a person who saw, heard or otherwise perceived the representation being made; or
(b)a document so far as it contains the representation, or another representation to which it is reasonably necessary to refer in order to understand the representation.
Notes
1Section 67 imposes notice requirements relating to this subsection.
2Clause 4 of Part 2 of the Dictionary is about the availability of persons.
Section 69 is set out above paragraph 18.
Ms Thompson’s handwritten notes are as follows:
ASIC seeks to tender Ms Thompson’s notes under s 69 as evidence of the following asserted facts:
FACT ASSERTED 1. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘Trucking was part of the contract we had with the Grains Board and the UN were aware of it.’
2. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘I knew about trucking when we were working with Iraqis. It was fairly common to have transport arrangements to move grain. It was part of the deal. Grains board had no money to ship grain. We paid.’
3. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘It was the Grains Board’s money. It wasn’t our money. Why would we investigate?’
4. During a conversation with Mr Flugge on 28 February 2005, Mr Flugge stated words to the following effect:
‘One group we dealt with at one stage was Ronly. Ronly was the agent for us. I was told that they were making payments to Alia.’
5. Alternatively to 1
During a discussion with Mr Zwier, Quennell, Cooper, Ms Thompson and Mr Flugge on 28 February 2005, one of the participants to that discussion, said words to the following effect:
‘Trucking was part of the contract we had with the Grains Board and the UN were aware of it.’
6. Alternatively to 2
During a discussion with Mr Zwier, Quennell, Cooper, Ms Thompson and Mr Flugge on 28 February 2005, one of the participants to that discussion, said words to the following effect:
‘I knew about trucking when we were working with Iraqis. It was fairly common to have transport arrangements to move grain. It was part of the deal. Grains board had no money to ship grain. We paid.’
7. Alternatively to 3
During a discussion with Mr Zwier, Quennell, Cooper, Ms Thompson and Mr Flugge on 28 February 2005, one of the participants to that discussion, said words to the following effect:
‘It was the Grains Board’s money. It wasn’t our money. Why would we investigate?’
8. Alternatively to 4
During a discussion with Mr Zwier, Quennell, Cooper, Ms Thompson and Mr Flugge on 28 February 2005, one of the participants to that discussion, said words to the following effect:
‘One group we dealt with at one stage was Ronly. Ronly was the agent for us. I was told that they were making payments to Alia.’
9. AWB paid money to the IGB. 10. The money AWB paid to the IGB was not AWB’s money. 11. Ronly acted as agent for AWB. Ronly made payments to Alia on behalf of AWB. Asserted facts 1 to 4
Asserted facts 1 to 4 all relate to things submitted to have been said by Mr Flugge. Can it be reasonably be supposed that Ms Thompson was intending to assert the facts alleged in 1 to 4?
In the absence of Ms Thompson’s oral evidence, I can only look at the notes, the evidence of Mr Zwier, the surrounding circumstances, and take into account the inferences I am permitted to draw under the Act. Ms Thompson does not record in her notes that Mr Flugge said these things. Mr Zwier was not asked about Ms Thompson’s notes.
I am not satisfied that it can be reasonably supposed that Ms Thompson was intending to assert facts 1 to 4.
Asserted facts 5 to 8
I am satisfied that it can be reasonably supposed that Ms Thompson was intending by her notes, to assert the facts alleged in 5 to 8.
As discussed above in relation to Mr Zwier’s notes, Ms Thompson had personal knowledge, as she was present in the conference and it might be reasonably supposed that she took notes of what was said.
The notes are admissible as evidence of asserted facts 5 to 8.
Asserted facts 9 to 11
These facts are described as underlying facts.
In the case of asserted facts 9 to 11, Ms Thompson does not have personal knowledge of the facts, and it is not clear that Ms Thompson made the representation on the basis of information supplied pursuant to s 69(2)(b).
Does the note, as a business record, contain a representation by another person who is able to satisfy s 69(2)? I discuss each of asserted facts 9, 10 and 11 in turn.
Asserted fact 9: AWB paid money to the IGB
I find that the business record does not make a representation that could reasonably be supposed to assert the asserted fact.
If the business record does make such a representation, I find that section 69(2)(a) does not apply.
As for s 69(2)(b), I am not satisfied that the representation made by Ms Thompson in the business record was based on information supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact. The note does not identify the person that supplied the information.
I have to be satisfied on the balance of probabilities that the representations were made by someone on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.
The ultimate source of the information must be someone who had personal knowledge of the asserted fact, that is somebody whose personal knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact).
So far I have heard no evidence that any person saw, heard or otherwise perceived that AWB paid money to the IGB. So far the evidence has suggested that payments were made to Alia. It is then suggested that Alia paid some money to Iraqi instrumentalities.
I reject the tender of the document as evidence of asserted fact 9.
Asserted fact 10: The money that AWB paid to the IGB was not AWB’s money
ASIC has not referred me to any evidence led to date that supports this asserted fact. The evidence suggests AWB may have paid its own money to Alia for which it was reimbursed from the Escrow Account.
I reject the tender of the document as evidence of asserted fact 10.
Asserted fact 11: Ronly acted as agent for AWB; Ronly made payments to Alia on behalf of AWB
There is evidence to support this asserted fact. I am satisfied that the ultimate source of this asserted fact is someone who had personal knowledge of the asserted fact.
The notes are clear and legible; the probative value of the evidence is not substantially outweighed by the danger that it might be unfairly prejudicial to admit the evidence as they could rationally affect consideration of a fact in issue.
I will admit the notes as evidence of asserted fact 11.
Category 2: ASIC tender of Mr Quennell’s notes as evidence of asserted facts in table under s 69[14]
[14]Exhibit MFI P41.
The typed version of Mr Quennell’s notes is as follows:
ASIC seeks to tender Mr Quennell’s notes as evidence of the following asserted facts.
FACT ASSERTED
1. During a conversation with Mr Flugge on 30 April 2004, Mr Flugge stated words to the following effect:
‘Effectively we paid money back to IGB then they did inland transport- we paid it back through Ronly, they paid Alia Transport.’
2. During a conversation with Mr Flugge on 30 April 2004, Mr Flugge said words to the following effect:
‘I can recall talking to Mark Emons. There was some discussion about transport.’
3. During a conversation with Mr Flugge on 30 April 2004, Mr Flugge said words to the following effect:
‘I recall this payment would be made through Ronly.’
4. During a conversation with Mr Flugge on 30 April 2004, Mr Flugge said words to the following effect:
‘IGB had no money. The needed money for infrastructure to be built. They needed a source of income to do that.’
5. Alternative to 1
During a discussion with Mr Flugge, Mr Cooper and Mr Quennell on 30 April 2004, one of those persons stated words to the following effect:
‘Effectively we paid money back to IGB then they did inland transport- we paid it back through Ronly, they paid Alia Transport.’
6. Alternative to 2
During a discussion with Mr Flugge, Mr Cooper and Mr Quennell on 30 April 2004, one of those persons stated words to the following effect:
‘I can recall talking to Mark Emons. There was some discussion about transport.’
7. Alternative to 3
During a discussion with Mr Flugge, Mr Cooper and Mr Quennell on 30 April 2004, one of those persons stated words to the following effect:
‘I recall this payment would be made through Ronly.’
8. Alternative to 4
During a discussion with Mr Flugge, Mr Cooper and Mr Quennell on 30 April 2004, one of those persons stated words to the following effect:
‘IGB had no money. The needed money for infrastructure to be built. They needed a source of income to do that.’
9. AWB paid money back to IGB through Ronly, who paid Alia.
Asserted facts 1 to 4
Can it be reasonably supposed that Mr Quennell intended to assert the fact that Mr Flugge said each of the statements alleged in 1 to 4?
Asserted fact 1: During a conversation with Mr Flugge on 30 April 2014, Mr Flugge stated words to the following effect:
Effectively we paid money back to IGB then they did inland transport – we paid it back through Ronly, they paid Alia Transport.
The notes are of an interview with Mr Flugge alone.
On inspecting the note I draw the inference, and I am satisfied that, it contains a note of Mr Quennell’s representation of statements made by Mr Flugge.
Mr Quennell had personal knowledge of the representation as, I infer, he took down notes of what Mr Flugge said during the 30 April 2014 conversation.
The same observations may be made about asserted facts 2, 3 and 4.
I find that the notes are admissible as evidence of asserted facts 1 to 4.
There is no need to deal with the alternate asserted facts 5 to 8.
Asserted fact 9
The asserted fact is said to be an underlying fact.
The representation is either by Mr Quennell, in which case the basis of the information would be what Mr Flugge said, relying on s 69(2)(b).
Alternatively, the representation could be that of Mr Flugge as recorded in the note.
Can it be reasonably supposed that Mr Flugge had personal knowledge of the asserted fact? The evidence does not suggest that Mr Flugge had knowledge that AWB paid money back to IGB through Ronly, who paid Alia.
Was the representation made by Mr Flugge on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact?
I refer again to the Court of Appeal (Nettle and Redlich JJA and Almond AJA) decision in Lancaster v R,[15] and the passage at [27] quoted above at paragraph 72.
[15](2014) 44 VR 820.
ASIC has to satisfy me that the ultimate source of this fact was a person who had personal knowledge of this asserted fact.
ASIC refers to the evidence of Mr Whitwell. When Mr Whitwell was asked about the Iron Filings claim he said that he understood moneys were to be paid to Alia and then Alia would pay the Iraqi Water transport.[16] Mr Whitwell did not give evidence that moneys paid to Ronly were paid to Alia. Subsequently, Mr Whitwell gave evidence that he understood the inland transport fee to be the process by which AWB paid for trucking in Iraq. He said the payment went from ‘us to Alia transport in Jordan and then from Alia transport to the Iraqis.’[17] Mr Whitwell does not mention Ronly.
[16]Transcript of hearing, ASIC v Flugge & Geary, (November 10 2015) T1559.
[17]Transcript of hearing, ASIC v Flugge & Geary, (November 10 2015) T1562, L9–11.
Apart from this evidence, ASIC did not direct me to any evidence that establishes that anybody at AWB had personal knowledge of the asserted fact when money was paid to Ronly by AWB, that is somebody whose personal knowledge of the fact was, or might reasonably be supposed to have been, based on what the person saw, heard, or otherwise perceived (other than a previous representation made by a person about the asserted fact).
Mr Whitwell commenced employment in July 2002. Mr Flugge had ceased to be chairman at this stage.
I am not satisfied that the ultimate source of this statement, if made by Mr Flugge, was a person with personal knowledge of the alleged fact.
I find that the notes may not be tendered as evidence of the asserted underlying fact 9.
Should the evidence be excluded under s 135?
The notes are probative of evidence of the knowledge of material facts pleaded against Mr Flugge. They have significant probative value. The prejudice to Mr Flugge is the inability to cross-examine Mr Quennell.
As I have said earlier, under s 135 of the Act, the Court’s discretion is enlivened if relevantly, the probative value of the evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party; be misleading or confusing; or cause or result in undue waste of time.
The probative value of a piece of evidence is the extent to which it could rationally affect the assessment of the probability of the existence of a fact in issue.[18]
[18]Part 1 of the Dictionary of the Act.
Accepting that there is prejudice to Mr Flugge, I find that it does not substantially outweigh the probative value of the evidence.
I find that my discretion to exclude the evidence has not been enlivened.
Category 2: ASIC tender of Mr Zwier’s notes under s 64
ASIC seeks to tender Mr Zwier’s notes under the s 64 exception to the hearsay rule, that as applicable where the maker of the note is available to give evidence.
Section 64 of the Act provides:
Exception—civil proceedings if maker available
(1)This section applies in a civil proceeding if a person who made a previous representation is available to give evidence about an asserted fact.
(2) The hearsay rule does not apply to—
(a)evidence of the representation that is given by a person who saw, heard or otherwise perceived the representation being made; or
(b)a document so far as it contains the representation, or another representation to which it is reasonably necessary to refer in order to understand the representation—
if it would cause undue expense or undue delay, or would not be reasonably practicable, to call the person who made the representation to give evidence.
Note: Section 67 imposes notice requirements relating to this subsection. Section 68 is about objections to notices that relate to this subsection.
(3)If the person who made the representation has been or is to be called to give evidence, the hearsay rule does not apply to evidence of the representation that is given by—
(a) that person; or
(b) a person who saw, heard or otherwise perceived the representation being made.
(4)A document containing a representation to which subsection (3) applies must not be tendered before the conclusion of the examination in chief of the person who made the representation, unless the court gives leave.
Note:Clause 4 of Part 2 of the Dictionary is about the availability of persons.
I assume that ASIC seeks to tender the notes as evidence of the same asserted facts that are alleged in respect of the s 69 tender, as listed in the table appearing at paragraph 29.
The notes have been admitted as evidence of asserted facts 5 to 8 under s 69. It is therefore not necessary to consider s 64 in relation to asserted facts 5 to 8.
As to asserted facts 1 to 4, and 9 to 11; the same reasoning applies as with s 69. In each case the relevant question is can it reasonably be supposed that Mr Zwier intended to assert the asserted facts. For reasons given earlier, I am not satisfied that he did.
Asserted facts 1 to 4 and 9 to 11 are not admissible under s 64.
Category 2: ASIC tender of Ms Thompson notes as evidence of table of asserted facts under s 63
Under s 63, the facts asserted are as follows:
FACT ASSERTED 1. During a conversation with Ms Thompson, Mr Zwier, Mr Quennell and Mr Cooper on 28 February 2005, Mr Flugge stated words to the effect of:
‘Trucking was part of the contract we had with the grains board, and the UN were aware of it.’
2. During the conversation, Mr Flugge stated that he was aware of the UN resolutions. 3. During the conversation, Mr Flugge stated words to the effect that he became aware of the dollars after the fact, and wouldn’t have gotten into the detail. 4. During a conversation with Mr Flugge on 28 February 2005 Mr Flugge stated words to the following effect:
‘I knew about trucking when we were working with Iraqis. It was fairly common to have transport arrangements to move grain. It was part of the deal. Grains board had no money to ship grain. We paid.’
5. During the conversation, Mr Flugge stated words to the effect of:
‘It was grains board money, not our money – why would we investigate?’
6. During the conversation, Mr Flugge was asked what he knew about the trucking company at the time. 7. During the conversation, Mr Flugge stated words to the effect of:
‘Ronly were an agent for us’
And that he was aware of this because he had been told that they were making payments to Alia.
8. During the conversation, Mr Flugge stated words to the effect of:
‘No-one at AWB was suspected of being on the take.’
9. During the conversation, Mr Flugge stated that he didn’t discuss trucking or the Canadian complaint with the United Nations. 10. During the conversation, Mr Quennell referred to a meeting with Alistair Nicholas, following which Mr Flugge stated words to the effect of:
‘I do now recall the meeting. I remember meeting people from the Canadian Wheat Board, and Austrade people talking about it.’
Asserted facts 1 to 5 and 7 to 9
These asserted facts all involve statements allegedly made by Mr Flugge. For the reasons given above when dealing with the tender of Ms Thomson’s notes under s 69, I am not satisfied that Ms Thompson was intending to assert facts 1 to 5 and 7 to 9.
Asserted fact 6
Can it be reasonably be supposed that Ms Thomson was intending to assert that during the conversation, Mr Flugge was asked what he knew about the trucking company at the time?
The document does not suggest, nor is there any other evidence to support that contention.
Asserted fact 6 is inadmissible under s 63.
Asserted fact 10
During the conversation, Mr Quennell referred to a meeting with Alistair Nicholas, following which Mr Flugge stated words to the effect of ‘I do now recall the meeting. I remember meeting people from the Canadian Wheat Board, and Austrade people talking about it.’
Can it be reasonably be supposed that Ms Thomson was intending to assert this fact in her notes?
In my opinion, Ms Thomson was, as indicated at the foot of the second page and the top of the third page of her notes.
Asserted fact 10 is admissible under s 63.
Category 3: ASIC tender of Mr Quennell’s notes as evidence of underlying fact under s 63
ASIC seeks to tender the transcript of Mr Quennell’s evidence at the Cole Royal Commission under s 63 of the Act, as a person who made the previous representation who is not available to give evidence of the asserted fact. To enliven s 63, ASIC must satisfy me that that Mr Quennell is not available to give evidence of the asserted facts.
Has ASIC satisfied me that Mr Quennell is not available to give evidence?
Clause 4 of the Dictionary to the Act provides:
Unavailability of persons
(1)For the purposes of this Act, a person is taken not to be available to give evidence about a fact if—
(a) the person is dead; or
(b)the person is, for any reason other than the application of section 16 (Competence and compellability—judges and jurors), not competent to give the evidence; or
(c)the person is mentally or physically unable to give the evidence and it is not reasonably practicable to overcome that inability; or
(d)it would be unlawful for the person to give the evidence; or
(e)a provision of this Act prohibits the evidence being given; or
(f)all reasonable steps have been taken, by the party seeking to prove the person is not available, to find the person or secure his or her attendance, but without success; or
(g)all reasonable steps have been taken, by the party seeking to prove the person is not available, to compel the person to give the evidence, but without success.
(2)In all other cases the person is taken to be available to give evidence about the fact.
Mr Quennell is an Australian citizen who at the time of the trial was residing in Singapore.[19] ASIC says that it has made enquiries with the Department of Immigration and Boarder Protection regarding Mr Quennell’s movements into or out of Australia and obtained passenger cards for Mr Quennell.
[19]This is discussed further in ASIC v Flugge & Geary (Ruling No 5) [2015] VSC 665.
On 29 April 2014, Mr Pangboune, a representative of ASIC, attended the Brighton East address recorded on the passenger cards and was informed that Mr Quennell had just returned to Singapore.
In July 2015 a subpoena in each of the proceedings was issued by the Court and a request from the Prothonotary to the Attorney General of Singapore was made to effect service of the subpoenas.
On 19 August 2015, Mr Lockett telephoned Mr Quennell; during the course of the conversation Mr Quennell informed Mr Lockett that because AWB was a former client, Mr Quennell did not consider it appropriate to give evidence in these proceedings unless compelled to do so.
Later on 19 August 2015, Mr Lockett emailed the subpoenas to Mr Quennell, including a covering letter in which ASIC stated that it would pay Mr Quennell’s reasonable costs of compliance with the subpoena including reasonable travel and accommodation expenses.
On 16 September 2015, Mr Lockett again spoke with Mr Quennell via telephone and noted Mr Quennell had been made aware of the subpoenas. Mr Quennell expressed no view as to whether he had a preference to give evidence via video link or in person.
By emails sent 18 September 2015 and 16 October 2015, Mr Quennell expressed his view that he had not been properly served with the subpoenas, in circumstances where personal service had not been effected, and leave of the court had not been obtained for substituted service.
On 26 October 2015, ASIC was informed that Singapore was ‘unable to accede to the request for substituted service as it does not fall within the scope of Order 65 Rule 2 of the Rules of the Court [of Singapore].’ ASIC filed and served an application for leave to serve further subpoenas out of Australia. On 16 November 2015 this Court refused that application.
ASIC contends that the failure of ASIC to take steps to examine Mr Quennell in Singapore are not relevant to the inquiry of whether ASIC has taken all reasonable steps to secure Mr Quennell’s attendance before this Court without success.[20]
[20](2009) 258 ALR 598, 604 [25] (‘Tim Barr’).
ASIC submits that what is meant be attendance in clause 4 of Part 2 was considered by Barrett J in Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd,[21] where his Honour said that the relevant steps to consider where only those steps that will or might cause the person to be physically present in court or attend by video link. Barrett J said that steps to cause the person to attend for examination under the Evidence on Commission Act1995 (NSW) were not steps relevant to securing the persons attendance before the court.
[21]Tim Barr, [25].
Mr Flugge contends that not all reasonable steps have been taken to secure Mr Quennell’s attendance. Mr Flugge submits that in the absence of satisfactory proof that ASIC has taken ‘all reasonable steps’ to ‘secure’ or ‘compel’ Mr Quennell’s attendance, Mr Quennell is taken to be available.[22]
[22]Clause 4(2) in Part 2 of the Dictionary of the Act.
Mr Flugge says that the question of what is sufficient to discharge the requirement to show reasonable steps were taken, will be affected by the nature and extent of the steps taken and timing of the events amounting to attempts to secure or compel attendance.[23]
[23]R v Tran [2003] ACTSC 53; Quintan v BW Rose Pty Ltd [2008] NSWSC 1012, [14].
Mr Flugge relies on Mindshare Communications Ltd v Orleans Investments Pty Ltd,[24] where the defendant sought to establish that all reasonable steps had been taken to secure the attendance of a witness who lived in Hong Kong. The witness had been contacted by the defendant, but had remained unresponsive.
[24][2007] NSWSC 976 (‘Mindshare’).
Hamilton J held that if a witness simply refuses to answer requests to obtain evidence, then the witness is taken not to be available to give evidence within the meaning of (the current) clause (g).
The plaintiff submitted that not all reasonable steps had been taken as an application could have been made under the Hong Kong Evidence Ordinance that provided that a Hong Kong court had power to make such provision for obtaining evidence in Hong Kong as may appear to the Court to be appropriate for the purpose of giving effect to a request to obtain evidence for a foreign court and that and such order may require a person specified therein to take such steps as the Court considers appropriate for that purpose of (the current) clause (g).
The trial judge accepted that if it were clear that the witness would attend and give the evidence sought in Hong Kong, if the Hong Kong procedure was engaged in, then such an application would be encompassed with the concept of reasonable efforts. However, as the witness had refused to co-operate and the Court had concerns about the quality of his recollection of past events, that cast doubt on whether any useful evidence would or could be given through securing the witness’ attendance in Hong Kong.
His Honour held that in those circumstances it would not be reasonable for the defendants to be required to go to the trouble and expense of making the application in Hong Kong and perhaps attending in Hong Kong, when it was most doubtful whether the witness would give the evidence in any useful form, if that procedure were pursued.
Accordingly, his Honour was satisfied that all reasonable steps had been taken to secure the witness’ attendance but without success.
Justice Barrett did not refer to Mindshare in Tim Barr.
Mr Flugge also relies on R v Tran,[25] where Gray J of the Supreme Court of the Australian Capital Territory considered whether all reasonable steps had been taken to secure attendance of a witness. There, the prosecution intended to call a witness but failed to serve the witness with a subpoena.
[25][2003] ACTSC 53.
His Honour said that in view of the witness subsequently indicating his unwillingness to give evidence it may have been prudent, in hindsight, to have served the witness with a subpoena. His Honour said that, however, was not the test. The question was whether any reasonable steps were left to be taken. Gray J said that ‘on that basis what might have been said to be a failure to take a step which is said to be a reasonable step will not mean that all reasonable steps have not been taken if the opportunity for taking the step has passed.’[26]
[26][2003] ACTSC 53, [19].
In my opinion, the test laid down by his Honour was the relevant test for the facts that he was presented with. I do not consider that his Honour purported to say that in all cases when considering whether the person seeking to avail itself of s 63, the Court may only consider steps that could be taken at the time of the application to rely on s 63.
The test formulated by his Honour should be read in the wider context of the reasons and the circumstances of the case. In particular, his Honour appears to have confined his assessment of whether ‘all reasonable steps had been taken’ to the submissions put to him that he should consider the failure of the police to issue a subpoena when the trial date was fixed.
Although doubting the wisdom of the police’s failure to make any attempts at service his Honour said ‘however, it was not put that to approach the matter in the way that it had been approached was unreasonable.’[27] I read Gray J’s subsequent remarks including the test above as a response to the submission that the failure at a particular date (the date the trial was fixed) is sufficient alone to constitute a failure to take all reasonable steps under the section. In this light, the test is not only prospective, so that no failure to take a reasonable step in the past is relevant. Rather the point is that the assessment of ‘all reasonable steps’ (as those words themselves suggest) should be cumulative and not focused on one single event in the past.
[27][2003] ACTSC 53.
2. In cases of that kind, the issue of authenticity will be for the tribunal of fact to determine. In cases heard by a judge alone, this will be the judge at the time that judgment is delivered and the facts found. In cases with a jury, it will be the jury.
3. The question of what evidence will be admitted is a question of law for the tribunal of law, which will be the Court.
4. Since authenticity is not a ground of admissibility under the Act, the issue of authenticity does not directly arise for the tribunal of law’s consideration at the level of objections to evidence.
5. What does arise for its consideration is the question of relevance under s 55. If the evidence is relevant it is admissible: s 56. It will be relevant under s 55 if the evidence is such that ‘if it were accepted, [it] could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue.’
6. The question of a document’s authenticity is relevant only to the tribunal of law’s consideration of relevance under s 55. It has no other role.
7. In that inquiry, the question for the tribunal of law is not whether the document is authentic but whether receipt of the document could, to paraphrase s 55, rationally affect the assessment of the probability of a fact.
8. If there is raised a question about the authenticity of a document (and assuming that, if authentic, it would otherwise be relevant to an issue) then there will be an issue in the proceedings about its authenticity. This will be a question for the tribunal of fact to resolve, if the document is admitted.
9. The question for the tribunal of law, by contrast, will be whether the document is relevant to a fact in issue under s 55. That is, the question will be whether the document can rationally affect the assessment of the probabilities of the fact, including its authenticity.
10. What materials may be examined in answering this question? The answer is provided by s 58:
58 Inferences as to relevance
(1) If a question arises as to the relevance of a document or thing, the court may examine it and may draw any reasonable inference from it, including an inference as to its authenticity or identity.
(2) Subsection (1) does not limit the matters from which inferences may properly be drawn.
11. The position then is clear. In answering the only question before the tribunal of law – relevance – the tribunal may examine the document to see what may be reasonably inferred from it (s 58(1)). It may also examine other material (s 58(2)).
12. The tribunal of law does not find that the document is authentic. It finds that there is, or there is not, a reasonable inference to that effect and hence that the document is, or is not, relevant. If there is a reasonable inference that the receipt of the document will rationally affect the probability of a finding of fact, then the matter may to go to the tribunal of fact which will then determine at the end of the trial whether the document is authentic and whether the fact is proved.
13. At no time does the tribunal of law determine that the document is or is not authentic because this is not a question for it. It may, however, determine that no reasonable inference to that effect is open and thereby conclude that it is not relevant. In a jury context, that will be similar to taking the question of authenticity away from the jury. Analytically, it will be the same where the tribunal of fact is a judge.
14. In deciding relevance (ie whether the tribunal of fact could reasonably infer that the document (otherwise relevant) was authentic), the tribunal of law is explicitly authorised by s 58(1) to ask what inferences as to authenticity are available from the document itself. That is what s 58(1) says.
The defendants said that the minute did not bear a logo or other indicia of Alia. ASIC says, and I accept, that one would not expect minutes of a meeting to contain a logo or other indicia.
Section 55 is set out above at paragraph 13.
In my opinion, the receipt of the document could, to paraphrase s 55, rationally affect the assessment of the probability of a fact in issue, that is whether Alia had agreed with Iraq State Company for Water Transport on how moneys received were to be dealt with.
Minutes were supplied by Mr Al Absi to the Cole Inquiry. Mr Al Absi was the general manager of the company.
ASIC submitted that Perram J’s decision has subsequently been followed on a number of occasions including by J Forrest J of this Court in Matthews v SPI Electricity Pty Ltd (Ruling No 35),[40] White J in ASIC v Activesuper Pty Ltd (in liq),[41] and Asden Developments Pty Ltd v Dinoris (No 2).[42]
[40][2014] VSC 59, [27] (‘Matthews’).
[41](2015) 105 ACSR 116, 135 [94].
[42](2015) 235 FCR 382, 384 [9].
ASIC says that in Matthews, J Forrest J found disputed business records to be exemplary of the case ‘in which a document — on its face — can be inferred to be authentic and relevant’ as per s 58 of the Act. He proceeded to outline inferences that could appropriately be drawn from the face of documents.[43]
[43]Matthews [2014] VSC 59, [32].
T Forrest J followed Matthews in Commissioner of the AFP v Zhang (Ruling No 2):[44]
Sections 58 and 183 vest the court with the power to draw inferences from documents as to the documents’ relevance and to the application of provisions of the Act respectively. The concepts of ‘relevance’ and ‘authenticity’ are closely entwined — s 58 reads to encapsulate authenticity as an aspect of relevance. With a view to the broad application of these sections, I am satisfied, as was J Forrest J in Matthews, that s 58 leaves open the possibility to infer the elements of s 69(2) from the face of documents alone.
[44][2015] VSC 437, [29].
ASIC submits that the law is therefore that, in order to establish relevance and admissibility of a document, all that is necessary is that there be ‘material from which its authenticity may reasonably be inferred.’[45] There is no separate requirement that the party tendering the document must establish its authenticity.
[45]ACCC v Air New Zealand (2012) 207 FCR 448, 469 [98].
ASIC says that the material from which authenticity may reasonably be inferred can include, and indeed be limited to, the document itself. Importantly, however, there are other means of providing the court with material from which authenticity may reasonably be inferred.
ASIC says that production of a document from an identified source might suffice to show that it was produced from the custody of the entity whose business it is, which would facilitate an inference that it was a business record of that entity. In Re Wollongong Coal Ltd the court said:[46]
production on subpoena from an identified source might suffice to show that it was produced from the custody of the entity whose business it is, which would facilitate an inference that it was a business record.
[46][2014] NSWSC 1952, [11] (Brereton J).
ASIC says that there is no need for author or keeper of document to be identified or give evidence. In ASIC v Rich, Austin J rejected a submission that the document was inadmissible because ‘ASIC had brought forward no one who was involved in the creation or keeping of the documents.’[47] Austin J said:[48]
the requirement to authenticate a document is not a requirement to produce a witness involved in the creation or keeping of the document. Other means of authentication may suffice.
[47](2005) 216 ALR 320, 350 [124].
[48]ASIC v Rich, 350–351 [124].
ASIC v Rich was decided prior to ACCC v Air New Zealand.[49] The references in Rich to ‘the requirement to authenticate a document’ should be understood by reference to the discussion of authenticity and relevance in ACCC v Air New Zealand— namely, that if authenticity is contested, the document will still be relevant as long as there is material from which its authenticity may reasonably be inferred.
[49]ACCC v Air New Zealand (2012) 207 FCR 448.
ASIC submits that there may be such material even if there is no evidence of the author of the business record. In ASIC v Rich, Austin J said:[50]
In Duke Group Ltd (in liq) v Arthur Young (1990) 55 SASR 11; 3 ACSR 420, Perry J held, with respect to the Evidence Act 1929 (SA), that it was unnecessary for the party tendering a business record to identify its author. Under s 69 what has to be shown is that the previous representation contained in the business record was made by, or on the basis of information directly or indirectly supplied by, “a person” falling within the description in s 69(2). Not only does the statutory provision extend beyond authors to other persons with knowledge, and permit representations to be made on the basis of information indirectly supplied; it is enough that the court is able to conclude, on the balance of probabilities, that the representations in the document were made by, or on the basis of information supplied by, someone (not necessarily identified) falling within one of the alternative descriptions in s 69(2). Thus, in Lee v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 305, Hely J (at [18]) held that s 69(2)(b) was satisfied, in the case of a note scanned into the defendant’s computer system, where neither the author of the note nor the person who provided the information noted were identified. It was enough that the unknown person providing the information (that is, information that a letter was at the Australia Post delivery centre) to the unknown person who recorded it, was from Australia Post. The Full Federal Court upheld Hely J’s decision.
[50]ASIC v Rich (2005) 216 ALR 320, 365 [197] (emphasis added).
Similarly, in Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Aust) Pty Ltd (No 4),[51] the applicant sought to tender an email during the cross-examination of a witness, where the witness was not the sender or a recipient of the email. In ruling that the document was admissible, Collier J summarised the relevant law as follows:[52]
It is clear that an email per se may be a “business record” for the purposes of ss 69 and 48(1)(e).
[51](2011) 194 FCR 479 (‘Aqua Marine’).
[52]Aqua Marine, 482 [10], [11].
The fact that the sender and recipient of an email are not witnesses in the proceedings does not disqualify the document as a business record.[53] An inference may be drawn that it is part of the business of a company for its employees to send and receive such emails.
[53]Aqua Marine, [11].
Again, in Lancaster v R the Court of Appeal held:[54]
It is enough to render the document admissible that it may be concluded that the representation was made by or on the basis of information supplied by someone who had personal knowledge of the fact within one of the alternative descriptions in s 69(2). So long as the nature and context of the recorded representation permits that inference to be drawn, the supplier of the information need not be identified.
[54]Lancaster v R, 832 [27].
ASIC submits that given these authorities, it is wrong to suggest, as paragraph 6 of the submissions on behalf of Mr Flugge dated 24 November 2015 appears to do, that the Court must ask and answer (or ‘examin[e]’), questions about the creation of the document, including:
(a) How the document came into existence?
(b) Who made it?
(c)Did the person who supposedly made the document have personal knowledge of the matters?
ASIC says that documents may readily be admitted as business records without any of those questions being capable of being answered.
In any event, the last question — (c) above — assumes, wrongly, that it must be shown that the maker of the document had personal knowledge of the matters set out. As ASIC submitted to the Court,[55] and contrary to the submissions made in opposition,[56] documents are admissible as business records if they are made on the basis of information supplied, directly or indirectly, by a person with personal knowledge. The maker need not have personal knowledge at all. And the document can be made on the basis of first, second, third or even tenth-hand hearsay, as long as it can reasonably be supposed that the ultimate provider of the information had personal knowledge.[57]
[55]Transcript of hearing, ASIC v Flugge & Geary, (24 November 2015) T2307, L21 – T2308, L16.
[56]Transcript of hearing, ASIC v Flugge & Geary, (24 November 2015) T2297, L24-25: ‘That’s second and third hand hearsay, it doesn’t go in, your Honour.’
[57]Lancaster v R, 831-832 [24]–[27].
In my opinion, the maker of the minutes may be reasonably supposed to intend to assert the asserted facts in the minutes.
Did the maker of the record have the requisite personal knowledge of the fact or facts asserted by the representation or was acting upon the basis of information given to him or her by someone who had the requisite personal knowledge? A reasonable inference is that the minutes of the meeting were taken by a person who was present at the meeting. On the other hand, Mr Al Absi in his affidavit does not say who prepared the minutes. He said he prepared the English translation of them.
The defendants did not suggest that the person who prepared the minutes did not have personal knowledge of the facts asserted or was not acting on the basis of information given to him or her by someone who had the requisite personal knowledge, apart from the challenge to the authenticity of the minutes.
Mr Geary submitted that the purported signature of Mr Al Absi did not appear to be genuine. Mr Geary submitted that it was significantly different from other signatures. No handwriting expert was called to support this contention. I was requested to make my own conclusion. I am not satisfied that the signature is not by Mr Al Absi.
As for s 135; the minutes do have significant probative value. The defendants have not lost the opportunity to cross-examine the maker of the minutes as the maker has not been called and need not be called. I am not satisfied that the prejudice to the defendants substantially outweighs the probative value of the evidence. I find that my discretion to exclude the evidence is not enlivened.
I find that the minutes are admissible as evidence of the asserted facts.
Category 6: Al Absi affidavit
ASIC seeks to tender an affidavit sworn by Mr Al Absi under s 63 of the Act. As discussed above in relation to Mr Quennell, ASIC bears the onus of establishing that all reasonable steps have been taken to secure Mr Al Absi’s attendance. ASIC had arranged with Mr Al Absi to give evidence by video link. ASIC had retained solicitors in Jordan, Khalifeh and Partners, to assist in the video link evidence proposed to be given by Mr Al Absi.
Mr McLeod and Mr Lockett gave evidence in support of the tender. The relevant evidence is referred to below.
ASIC submits that I should find that Mr Al Absi has received the emails or voice messages left for him requesting he give evidence and is refusing to respond, alternatively I should infer that Mr Al Absi is missing.
The defendants contend that that ASIC has not undertaken all reasonable steps to ‘find the person or secure his ... attendance.’[58] Counsel for Mr Flugge submits:[59]
The evidence from ASIC shows no attempt to get a private investigator, no attempt to get a personal address, no knowledge of the witness or his family even with respect to his own religion.
[58]Section 4(1)(f) in Part 2 of the Dictionary in the Act.
[59]Transcript of hearing, ASIC v Flugge & Geary, (11 November 2015) T2413, L6–9.
In response, ASIC submits that the relevant question is whether, in the particular circumstances of this case, reasonable steps were taken to find Mr Al Absi or secure his attendance at trial. Critically, those circumstances include the fact that, until mid-September 2015, Mr Al Absi was a co-operative witness, who gave every indication of making himself available to give evidence at the trial. He provided a signed statement to the Cole Royal Commission (which included an address), met with ASIC officers in person, swore a statutory declaration (which included another address), responded to numerous ASIC emails over several years sent to his work and private email addresses, and spoke with ASIC officers by telephone.
ASIC submits that in those circumstances, it would have been unreasonable for ASIC to engage a private investigator as there was no need.[60] Nor would it have been reasonable to ask Mr Al Absi about his family or his religion. In the circumstances, they were quite unnecessary steps to take. Indeed, asking such personal questions about a co-operative witness’s personal circumstances, including his religion, would have been quite inappropriate.
[60]Moreover, unlike a private litigant, law enforcement agencies including ASIC are not able to simply investigate (either directly or through a private investigator) in a foreign country. Such activities, if undertaken at all, must be undertaken pursuant to Australia's cooperation agreements with other jurisdictions. These are not matters that can be entered into lightly, and certainly not within the time available to ASIC following Mr Al Absi's failure to appear.
ASIC submits that in this respect, the relevant question is prospective. The Court asks whether there is any reasonable step still to be taken.[61]
[61]R v Tran.
ASIC also refers to Mindshare, discussed above, where Hamilton J held that if a witness simply refuses to answer, then the witness is taken not to be available to give evidence within the meaning of clause 4(g).
In Mindshare, counsel had suggested that the purpose of clause 4(g) was to deal with the situation where the attendance of a witness had been secured but it was impossible to obtain the evidence, for instance, because the witness declined to give it on the ground of privilege, or simply refused to give the evidence regardless of any consequences arising out of a contempt of court charge.
In my view, (g) is not relevant in the present case. The issue is whether all reasonable steps have been taken to find Mr Al Absi or to secure his attendance.
Mr Flugge and Mr Geary submissions
The defendants submit that all reasonable steps to find Mr Al Absi have not been taken.
Mr Al Absi was scheduled to give evidence on 18 November 2015. On 17 November 2015, Mr Lockett telephoned Ms Dina Issa, an associate of Khalifeh and Partners, and asked Ms Issa to contact Al-Riyadh Investment Group. Mr McLeod had told Mr Lockett that the Al-Riyadh Investment Group may have been Mr Al Absi’s current employer. Ms Issa was asked to search local directories and make any other inquiries she could to identify Mr Al Absi’s whereabouts.
A couple of hours later, Ms Issa reported back to Mr Lockett. She had been informed by the Al Riyadh Investment Group that Mr Al Absi no longer worked there and she was unable to locate any other contact details from local directories and searches.
No other steps have been taken to find Mr Al Absi. No investigator has been retained.
The document sought to be tendered by ASIC is exhibited to the affidavit of Mr Al Absi that ASIC has also sought to tender. ASIC seeks to tender Mr Al Absi’s affidavit under s 63, and the document is sought to be tendered under s 69 as a business record.
Mr Flugge had six points on whether all reasonable steps had been taken to secure Mr Al Absi’s attendance and on whether the evidence of Mr Al Absi’s affidavit should be excluded under s 135 as follows.
ASIC has not shown any attempt to engage a private investigator to locate Mr Al Absi. ASIC has not ascertained his family circumstances or his religion. ASIC said that Mr Al Absi is a significant witness and ASIC has only made a limited attempt to contact him. The solicitors appointed to assist with the video link were not instructed to contact Mr Al Absi before the video conference to ensure that Mr Al Absi attended.
ASIC has not availed themselves of the Foreign Evidence Act 1994 (Cth). Mr Flugge said that Mr Al Absi’s affidavit was not properly witnessed. Mr Flugge said that affidavit was affirmed and Mr McLeod did not ascertain whether Mr Al Absi was a Muslim.
ASIC proposed using Mr Al Absi’s affidavit in the Lindberg proceedings. ASIC was ordered to give discovery of anticipated witness statements to be used in those proceedings. Mr Flugge contends that ASIC had not observed the order. ASIC claimed the affidavit was privileged.
Mr Flugge says that the affidavit contained an address and that ASIC could have used that address to make private inquiries in Jordan.
Mr Flugge says that he wanted to cross examine Mr Al Absi on a telex sent by Mr Watson to Mr Al Absi of Alia, urging Mr Al Absi that any discussion of trucking fees should be sent only to Mr Watson or Mr Emons.
Mr Geary submits that I should not be satisfied that Mr Al Absi was uncooperative, as opposed to the messages just not getting through to Mr Al Absi.
The attempts after 17 November 2015 by Mr Lockett or Mr McLeod were ineffective. Inquiries should have been made in Jordan and not from Australia.
More importantly, the only inquiries made in Jordan were those briefly made on 17 November by Ms Issa over a couple of hours. Ms Issa did not give any details of the inquiries she had made. Ms Issa was not asked to persist with her investigation.
Mr Geary said that there had been no real attempts let alone all reasonable steps to secure the attendance of the witness.
Mr Geary pointed to the difference between the English expressions adopted in the affidavit and that in emails that Mr Al Absi had sent which showed that his English, while understandable, contained several grammatical and syntax mistakes.
Conclusion
The last contact that Mr Al Absi had with ASIC was on 18 September 2015, when he informed ASIC that he was ready to give his evidence by video link.
ASIC gave evidence of many phone calls, emails and Facebook messages to Mr Al Absi after 18 September 2015 to which Mr Al Absi failed to respond.
Nevertheless, despite its failure to prompt a response from Mr Al Absi since 18 September 2015, ASIC failed to arrange for someone to contact Mr Al Absi well before the hearing and failed to take any steps to ensure that Mr Al Absi attended the video link facility such as by picking him up and taking him to the facility.
ASIC should have realised that there was some risk of Mr Al Absi not appearing to give oral evidence in view of the suggestions made by Mr Flugge that Mr Al Absi was party to a side deal which netted Mr Emons, and perhaps Mr Watson, millions of dollars. On 23 July 2015, Mr McLeod informed Mr Al Absi that he was to be cross-examined.
ASIC did not suggest that it was unreasonable for someone to be retained in Jordan or to be sent from Australia to secure Mr Al Absi’s attendance. ASIC did not suggest that the expense would be unreasonable.
I am not satisfied in the circumstances that ASIC has taken ‘all reasonable steps’ to secure the attendance of Mr Al Absi at the video link facility.
If I am wrong, and Mr Al Absi’s affidavit is admissible under s 63, then the defendants submit that my discretion to exclude the evidence under s 135 is enlivened and that I should exercise my discretion to exclude the evidence.
The probative value of the evidence is not as significant as the affidavit might suggest. I am not satisfied that it contains the words of Mr Al Absi. The grammar and syntax is different to that used in his emails. On the limited evidence I have heard, I believe the affidavit was drafted for him.
The defendants would be denied the opportunity to cross examine Mr Al Absi about his arrangements with Mr Emons and Mr Watson.
Also, the evidence of Mr Edmunds Wilson is that he visited Alia in Jordan and was led to believe that Alia were carrying out the inland trucking of the wheat sold by AWB in Iraq. The defendants were denied the opportunity to put to Mr Al Absi that Alia misled AWB as to Alia’s role.
The cases discussed in earlier rulings given during the hearing of the subject proceedings in relation to s 135 of the Act,[62] suggest that such prejudice may be taken into account in the weight given to Mr Al Absi’s evidence.
[62]As discussed below, Mr Flugge relies on Matthews v SPI Electricity Pty Ltd (Ruling No 35) [2014] VSC 59.
In considering the prejudice that may be suffered, Mr Moore, on behalf of ASIC, submits that there ‘couldn’t possibly be … any prejudice, let alone a danger of unfair prejudice of such a degree as to substantially outweigh the probative value of the evidence.’ Mr Moore says that the document is question is one that ‘confirms what’s pretty plain already’, being that the deal Alia had with the Iraqis was for Alia to pass on to the Iraqis money received from AWB.[63]
[63]Transcript of hearing, ASIC v Flugge & Geary, (30 November 2015) T2540.
The failure of Mr Al Absi to attend, may also be relevant when considering any Jones v Dunkel issues.[64]
[64](1959) 101 CLR 298.
Despite the prejudice that the defendants may suffer, I am unable to find that it substantially outweighs the probative value of the evidence. I would not exclude the evidence under s 135.
In any event, I find the tender of the affidavit of Mr Al Absi is inadmissible under s 63 for the reasons given above.
Category 7: ‘A’ documents
The ‘A’ documents are documents relating to the Iron Filings claim and the Tigris transaction. These are relevant to the case pleaded against Mr Geary. ASIC also seeks to tender them in the case against Mr Flugge.
ASIC says that evidence of these transactions was relevant to ASIC establishing the failure of Mr Flugge to perform his duties under ss 180 and 181 of the Corporations Act 2001 (Cth). Secondly they are relevant evidence to ASIC establishing that the inland transport mechanism enabled moneys to be wrongly obtained from the escrow account and then misapplied. Thirdly, ASIC submits the transactions are evidence of the damage that AWB suffered through Mr Flugge’s failure to stop the misuse of the escrow account.
None of these allegations, however, are pleaded against Mr Flugge. The matters referred to were not evidence but material facts, which if relied on must be pleaded. Evidence is how the material facts are proved.
For example, if it is alleged that Mr Flugge’s failure to stop the misuse of the escrow account led to the Tigris transaction being entered into, those facts must be alleged. Mr Flugge must be able to plead to the allegations. Whether evidence is relevant or not must be measured against the pleadings.
ASIC failed to refer to any authority to support their proposition that non-pleaded material facts are merely evidence that may be relied on to prove pleaded material facts. The proposition merely has to be stated to expose its invalidity.
Williams Civil Procedure Victoria states:[65]
Pleadings serve the twofold purpose of giving notice and defining issues. They inform each party of the claim or defences of the other side which he must prepare to meet at trial and at the same time identify the questions in dispute. The plaintiff must in the statement of claim allege facts which in law would justify the court in awarding the plaintiff relief of remedy against the defendant.
[65]LexisNexis Butterworths, Civil Procedure: Victoria, vol I (at service 299), [13.01.05].
In Dare v Pulham, the High Court of Australia said:[66]
Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial; and they give a defendant an understanding of a plaintiff’s claim in aid of the defendant’s right to make a payment into court.
[66](1982) 148 CLR 658, 664 (citations omitted).
The pleadings have given Mr Flugge no notice that the Iron Filings or Tigris transactions were part of the case against him. Accordingly he has not had to prepare a defence to the Iron Filings claim and the Tigris claim. Further, the lack of pleadings prevent the relevance and admissibility of evidence relating to those issues to be determined.
Further, if I am wrong and the allegations concerning the Iron filings claim and the Tigris claim are not material facts, they would constitute particulars of harm or damage alleged to have been caused by Mr Flugge’s allege failure to put a stop to the misuse of the escrow account. No such particulars have been given, even though counsel for ASIC said that ASIC sought to rely on these transactions as part of the harm that ASIC alleges flowed from Mr Flugge’s alleged breaches of statutory duties.
I find that the category A documents are not admissible as evidence against Mr Flugge.
Category 8: Cole Commission Inquiry report extracts
ASIC seeks to tender certain portions of the Cole Commission Inquiry report for a non-hearsay purpose under s 60 of the Act.
ASIC claims against Flugge that revelation of AWB’s conduct of the sorts alleged in paragraphs 24 to 29 and 34 and referred to in the trip report was likely to cause damage and in fact caused substantial and enduring harm to AWB.
The plea assumes that ASIC establishes this conduct in the case against Mr Flugge and that the conduct so established in this case was revealed in the Cole Commission Inquiry report. I accept that the report is sought to be used for objective non-hearsay purposes.
Mr Flugge contends that the statement of claim does not allege, as a material fact, that the conduct alleged in the paragraphs referred to was in fact disclosed to the public by the Cole Commission Inquiry report.
There are references to the Cole Commission Inquiry report in the particulars but not the extracts as sought to be tendered by ASIC.
Mr Flugge says that ASIC has not identified which of the particular revelations referred to in the summary are captured by the pleading.
Mr Geary says that he admits that the conduct alleged caused substantial harm to AWB. The revelation plea is in [39] of the claim against Mr Geary. Mr Geary pleads: ‘Save that he admits revelation of the conduct alleged at paragraph 25 to 29, 35, 47 to 50 and 59 caused substantial harm to AWB, he denies paragraph 39.’ Mr Geary takes issue with the words ‘of the sort.’
The particulars of the revelation do not include the extract of the Cole report sought to be tendered.
Mr Geary submitted that the fact of the inquiry, and not what the Commissioner found, is relevant. That submission is borne out by the particulars. The particulars also refer to the fact that a report was issued, but not the content of the report.
In response ASIC says that it is not only the fact of the inquiry and that a report was released, but what was found at the inquiry is relevant. That is not what is pleaded.
I find that the Cole Commission Inquiry report extracts are not admissible.
Summary of Rulings
Category 1: Zwier notes s 69
Asserted facts 1 to 11
The notes are inadmissible as evidence of asserted facts 1 to 4.
The notes are admissible as evidence of asserted facts 5 to 8.
The notes are inadmissible as evidence of asserted facts 9 to 11.
Category 1: Thomson notes s 69
Asserted facts 1 to 11
The notes are inadmissible as evidence of asserted facts 1 to 4.
The notes are admissible as evidence of asserted facts 5 to 8.
The notes are inadmissible as evidence of asserted facts 9 to 11.
Category 2: Quennell notes s 69
Asserted facts 1 to 9
The notes are admissible as evidence of asserted facts 1 to 4.
There is no need to decide whether the notes are admissible under s 69 as evidence of asserted facts 5 to 8.
The notes are inadmissible as evidence of asserted fact 9.
Category 2: Zwier Notes s 64
Asserted facts 1 to 11
The notes are inadmissible as evidence of asserted facts 1 to 4 and 9 to 11.
As indicated above, the notes are admissible under s 69 of the asserted facts 5 to 8.
Category 2: Thomson Notes s 63
Asserted facts 1 to 10
The notes are inadmissible as evidence of asserted facts 1 to 10.
The notes are admissible as evidence of asserted fact 11.
Category 3: Quennell Notes s 63
Asserted facts 7 to 10.
The notes have already been ruled admissible as evidence of asserted facts 7 to 10 under s 69.
Category 3: Quennell transcript s 63
Asserted facts 1 to 6.
The transcript references are inadmissible as evidence of asserted facts 1 to 6.
Category 4: Trewhitt documents
The parties have agreed on the admission of the Trewhitt documents subject to the defendants reserving the right to make submissions as to relevance, weight and probative value.
Category 5: Alia documents s 69
The minutes are admissible as evidence of the asserted facts.
Category 6: Alia affidavit
The affidavit is inadmissible under s 63.
Category 7: ‘A’ documents
The category A documents are inadmissible in the case against Mr Flugge.
Category 8: Cole Commission Inquiry report extracts s 60
The extracts from the Cole Commission Inquiry report are inadmissible.
4
12
0