Cherry v Steele-Park

In *Cherry v Steele-Park*, the Court of Appeal of New South Wales considered a dispute concerning the construction of a guarantee and the admissibility of evidence of surrounding circumstances. The appellant, Mr Steele-Park, sought to limit the use of certain documents, which were concededly relevant and admissible for an estoppel defence, arguing they should not be used for the purpose of construing the Guarantee.

The primary legal issues before the court were whether the documents annexed to an affidavit could be used to construe the Guarantee, and whether a limiting order under section 136 of the *Evidence Act 1995* (NSW) should have been made. This involved considering the distinction between the admissibility of evidence and its use, and the proper application of the discretion conferred by section 136. The court also had to determine the scope of the guaranteed obligation, specifically whether it extended to the vendors' loss of bargain following an uncompleted contract for the sale of land.

The Court of Appeal held that the primary judge had erred in treating the application for a limiting order under section 136 as a free-standing objection to the tender of the documents. The court noted that no submissions had been made to the primary judge regarding the specific grounds for a limiting order under section 136, namely the danger of unfair prejudice or the evidence being misleading or confusing. Furthermore, the court observed that the legislative policy of the *Evidence Act* is that evidence admitted for one purpose is admissible for all purposes, and that section 136 should not be used to complicate the evidentiary status of documents without a real danger of prejudice or confusion. The court also affirmed the principle that evidence of surrounding circumstances is admissible to assist in the construction of a contract, even in the absence of ambiguity, but such evidence is insufficient to displace the plain meaning of the contractual language.

The appeal was dismissed, with costs awarded to the respondent.