Gordon R.G. v Prudence Alice Pike Summary

CATCHWORDS

Evidence - Evidence Act 1995 - material admissible as "first hand" hearsay - whether general discretion to exclude evidence because its probative value is outweighted by the danger it might be unfairly prejudicial should be exercised - prejudice likely to be suffered by reason of admission of evidence not "unfair".

Evidence Act 1995, s135, Division 2 of Part 3.2

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. 2) ON ADMISSIBILITY OF HEARSAY MATERIAL

There has now been read para.26 of the affidavit of the respondent, Prudence Alice Pike. Paragraph 26 is in the following terms:

"On or about Tuesday, 6 November 1991 I was at `Berkley Downs' when my mother said words to the effect:

`Here is a cheque for you. It's for work you have done for the partnership and for the helping out on the partnership expenses.'"

There is then annexed a copy of the cheque. Objection was taken to this paragraph on the basis that it was hearsay, but it is conceded, properly I think, that the material is admissible as "first-hand" hearsay under Division 2 of Part 3.2 of the Evidence Act 1995 ("the Act"). The real question for my determination is whether I should exercise the general discretion to exclude evidence conferred by s.135 of the Act. Under that provision a 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.

It is common ground that the respondent's mother is now deceased and is thus not available to give evidence. One of the main issues in the proceedings will be whether the respondent can establish the defence of good faith. It appears to be common ground that the conversation described in para.26 would be relevant and admissible on its face as material indicating or tending to indicate the respondent's state of mind. However, the respondent seeks to rely on it not only as evidence of the terms of what was said by her mother, but also as evidence of the underlying facts there described. As I have said, it is accepted, and I think correctly so, that the material is admissible under Part 3.2 of the Act.

In the exercise of my discretion under s.135 of the Act, there is involved a weighing exercise where, on the one hand, the Court is asked to measure the probative value of the material against unfair prejudice or the other detrimental features mentioned in the provision. For present purposes, it appears that the only possible countervailing consideration would be the notion of unfair prejudice described in s.135(a).
In my opinion, it is not appropriate that I exercise the general statutory discretion to exclude the evidence.

It appears from other material before the Court that the respondent's mother was involved in the working of the partnership and its affairs, and it further appears from para.26 that this statement was made at the time that the cheque was handed over and, as a contemporaneous statement, it is likely to have considerable probative value.

I am prepared to accept that the Official Receiver would suffer some prejudice by reason of the admission of para.26 for all purposes, but I am not persuaded that such prejudice could be described as "unfair". The prejudice arises principally by reason of the unfortunate circumstances that the respondent's mother is now deceased and, thus, cannot be available to be tested on her statement. For those reasons, I rule that para.26 is admissible for all purposes.

I certify that this and the preceding two (2) 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

The case of Ronald George Gordon (Bankrupt), Official Trustee in Bankruptcy (Applicant) versus Prudence Alice Pike (Respondent) was heard in the Federal Court of Australia in the General Division. The applicant, the Official Trustee in Bankruptcy, sought to exclude certain hearsay evidence provided by the respondent, Prudence Alice Pike, in the proceedings related to Gordon's bankruptcy. The respondent argued that the evidence in question, which was a statement made by her deceased mother, was admissible and should be considered for its probative value.

The primary legal issue in this case was whether the hearsay material provided by the respondent should be excluded despite its admissibility under the Evidence Act 1995. Specifically, the court had to determine if the probative value of the evidence was substantially outweighed by the risk of unfair prejudice to the applicant, as permitted by section 135 of the Act. Given the deceased status of the person who made the statement, the court had to balance the importance of the evidence against the potential prejudice to the applicant.

Justice Beaumont, in delivering the judgment, acknowledged the admissibility of the hearsay material under Division 2 of Part 3.2 of the Evidence Act 1995. Despite recognising that the applicant might suffer some prejudice due to the deceased status of the declarant, the judge concluded that this prejudice was not "unfair" as defined under section 135(a) of the Act. The judge found that the evidence had significant probative value, particularly because it was a contemporaneous statement made during the cheque handover. Consequently, Justice Beaumont ruled that the hearsay evidence was admissible for all purposes.

This ruling allows the respondent to use the contested evidence in the bankruptcy proceedings, thereby permitting the exploration of the respondent's state of mind and the underlying facts as described in the statement made by her mother. The court's decision ensures that the probative value of the evidence is not unduly overshadowed by potential prejudice, thus upholding the respondent's right to present relevant information in the case.

Gordon R.G. v Prudence Alice Pike

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