Gordon R.G. v Prudence Alice Pike

[1995] FCA 761

CATCHWORDS

Evidence - Evidence Act 1995 - admissibility of transcript of examination of the bankrupt - reliance upon exception to hearsay rule in civil proceedings if maker of representation not available - evidence in regard to a crucial issue - general discretion to exclude evidence exercised as inability to cross-examine bankrupt would significantly disadvantage the respondent.

Evidence Act 1995, ss63, 135

RONALD GEORGE GORDON (Bankrupt), OFFICIAL TRUSTEE IN BANKRUPTCY (Applicant) v PRUDENCE ALICE PIKE (Respondent)

No. NB 502 of 1993

BEAUMONT J.

SYDNEY

1 SEPTEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA  )
  )
GENERAL DIVISION                  )     No. NB 502 of 1993
  )
BANKRUPTCY DISTRICT OF THE        )
  )
STATE OF NEW SOUTH WALES          )

RE      RONALD GEORGE GORDON

Bankrupt

EX PARTE:OFFICIAL TRUSTEE IN BANKRUPTCY

Applicant

PRUDENCE ALICE PIKE

Respondent

CORAM:   Beaumont J.

DATED:   1 September 1995

RULING (NO. 1) ON DISCRETION TO EXCLUDE HEARSAY EVIDENCE

These are proceedings in which the Trustee in Bankruptcy seeks to set aside two transactions which, it is said, constituted the settlement of property by the bankrupt made within two years before the commencement of the bankruptcy within the meaning of s.120(1) of the Bankruptcy Act 1966. One of the transactions challenged consists of a payment made in September 1991 in the sum of $15,250 in circumstances which need not be detailed here, save to note that it is claimed, on behalf of the respondent, that the ultimate source of the funds which were in part used to meet the cheque in the sum of $15,250, was the proceeds of sale of an aircraft which, according to the case of the Trustee, was beneficially owned by the bankrupt but which, according to the case of the respondent, was owned by other parties. It appears, therefore, that the beneficial ownership of the aircraft is likely to become a central issue in the proceedings.

In support of his case, the Official Receiver has sworn an affidavit to which he exhibits the transcript of an examination under s.81 of the Bankruptcy Act (Exhibit GLC2).  Reliance is placed by the Official Receiver on questions and answers appearing at pp.42 and 43 of the transcript of the examination held on 27 July 1994. In summary, that material deals with two questions.  First, the ownership of the aircraft, and secondly, the details of its sale and, in particular, a description of the circumstances in which the sale proceeds were paid into the account of the bankrupt at the National Bank at Dubbo.  As to the latter matters, there is no dispute, and since this material is common ground, that part of the tender is unnecessary as there is no issue in that respect. 

However, in respect of the former class of material there is, as I have said, a real issue.  The critical passage in the transcript appears at line 9 on p.42 in which the bankrupt was asked whether he owned the aircraft and gave the following answer:

"Have you owned a Cessna 182 Skylane?---Yes, I have."

On behalf of the Official Receiver, it is sought to tender this material under s.63 of the Evidence Act 1995 ("the Act"). 

Under s.63(1), an exception to the hearsay rule is made in civil proceedings if the maker of the representation sought to be relied upon is not available to give evidence.

I was informed by counsel for the Official Receiver that the bankrupt is now resident in New Zealand and is in poor health.  Counsel for the respondent accepts that the bankrupt is now resident in New Zealand but does not accept that his health is of sufficient concern to warrant his not being brought to Australia in order to give evidence.  (I should note, at this stage, that I have mentioned to the parties the possibility that his evidence could, in any event, be taken by a video conference facility which is available between this country and New Zealand, but neither party pressed for this course to be adopted.)

On behalf of the respondent, reliance is placed upon the provisions of s.135 of the Act, and in particular, the Court's power to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might, inter alia, be unfairly prejudicial to a party. In my opinion, the assertion made by the bankrupt at line 9 of p.42 of the transcript should be so characterised.
         The Court was informed, in the course of opening by counsel for the parties, that there will be tendered in evidence a body of documentary material going to the legal and beneficial ownership of the aircraft.  It appears clearly, at this stage, that there will be a substantial dispute in this area.  That being so, it seems to me that the probative value of an assertion expressed in the general way indicated by the answer given by the bankrupt at line 9 at p.42 is minimal. On the other hand, it appears that the respondent would be significantly disadvantaged if unable to cross-examine the bankrupt on what is, on any view, a crucial issue in the litigation. 

For those reasons, I exercise the discretion given to the Court under s.135 of the Act and refuse to admit the material appearing at pp.42 and 43 of the transcript.

As I have already said, the material at p.43 and in the second half of p.42 which gives the subsequent history of the disposition of the aircraft and the application of the proceeds of sale is common ground, and no longer being in issue, need not be tendered for the purpose of proving those matters.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Beaumont.

Associate

Dated:    1 September 1995

Counsel and Solicitors      Mr. J. Johnson instructed by

for Applicant:              Sally Nash & Co.

Counsel and Solicitors      Mr. D. Davies instructed by

for Respondent:             Phillips Fox

Date of hearing:            1 September 1995

Date Judgment delivered:         1 September 1995