Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) v Calleja

The appeal concerned Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) and Mr. Calleja. The dispute involved the admissibility of certain documents, specifically "Baycorp file notes," which the primary judge had refused to admit into evidence. The appeal was heard by Basten, Gleeson, and Leeming JJA.

The central legal issues before the appellate court were whether the primary judge erred in refusing to admit the Baycorp file notes, and if so, what consequences flowed from that error. This involved considering the application of the business records exception to the hearsay rule under the *Evidence Act 1995* (NSW), specifically sections 47, 48, 51, and 69, and the discretionary power to exclude evidence under section 135 of the same Act. The court also had to determine the inferences that could be drawn from the production of documents pursuant to a subpoena and from their form and context.

The Court of Appeal found that the primary judge had erred in rejecting the tender of the Baycorp file notes. It held that the representations within the file notes, concerning the possibility of litigation and an offer by Ms. Calleja to pay a sum to Baycorp from funds borrowed from Prime, fell within the exception provided by section 69(2) of the *Evidence Act 1995* (NSW). Furthermore, the court determined that the primary judge had failed to properly assess the probative value of the documents against the risk of unfair prejudice when exercising discretion under section 135. The court considered the principles outlined in *National Australia Bank Ltd v Rusu* regarding the admissibility of business records.

Consequently, the appeal was allowed. The orders refusing to admit the Baycorp file notes and subsequent orders were set aside. The proceedings were remitted for a retrial, which would include the costs of the first trial. The respondents were ordered to pay the appellant's costs of the appeal.