Hopkins Plaster Industries Pty Ltd v USG Interiors Australia Pty Ltd and Ors

[2002] VSC 293

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6111 of 2000

HOPKINS PLASTER INDUSTRIES PTY LTD (ACN 0673 704 503)

Plaintiff

V

USG INTERIORS AUSTRALIA PTY LTD (ACN 000 852 175)

BRITISH UNITED INDUSTRIES (VIC) PTY LTD (ACN 006 303 591)

UNITED STATES GYPSUM COMPANY

First Defendant

Second Defendant

Third Defendant

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JUDGE:	Balmford J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 July 2002
DATE OF RULING:	29 July 2002
CASE MAY BE CITED AS:	Hopkins v USG
MEDIUM NEUTRAL CITATION:	[2002] VSC 293

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EVIDENCE – similar fact – statement allegedly made by defendants’ employee – similar statements made to other persons – whether evidence of those other statements admissible

Trade Practice Act 1974 – section 52

Bennett & Bennett v LPC Holdings & JE Abel Real Estate Pty Ltd [1998] VSC 55
Boyce v Cafred Pty Ltd (1984) 4 FCR 367
Cooper v R (1961) 105 CLR 177
Cornell v Kennett [2000] VSC 273
Cousens v Grayridge Pty Ltd [2000] VSCA 96
Gates v City Mutual Life Assurance Society Ltd (1982) 43 ALR 313
HW Thompson Building Pty Ltv Allen Property Services Pty Ltd (1983) 48 ALR 667
Makin v Attorney-General (NSW) [1894] AC 57
Markby v R (1978) 21 ALR 448
Martin v Osborne (1936) 55 CLR 367
Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B R Fitzgerald	Riordans
For the Defendants	Mr M Galvin	Poynters

HER HONOUR:

Introduction

1. At the relevant time the plaintiff carried on business as a manufacturer of plaster and cement mouldings.   For a time it used a cement product known as Duracal in the manufacture of architectural external mouldings.   Duracal was manufactured by the third defendant in the United States, and the plaintiff purchased its supplies initially from the first defendant and later from the second defendant.

1. The plaintiff claims that Duracal was not suitable for use in the manufacture of external mouldings, in that it breaks down when exposed to water, as a result of which the plaintiff has suffered loss and damage.

1. The plaintiff claims that Mr Wearne, an employee of the first defendant, represented to Mr Bruhn, general manager of the plaintiff and its predecessor Peter Hopkins (Australia) Pty Ltd, that Duracal was suitable for use in the manufacture of external mouldings;  and further that that representation constituted misleading and deceptive conduct contrary to the provisions of the Trade Practices Act 1974 (“the Trade Practice Act”).

The evidence in question

1. Counsel for the plaintiff sought to call evidence from three witnesses, namely:

Mr Andrew Hopkins, a nephew of Mr Peter Hopkins, the sole director of the plaintiff, who is a director and production manager of Picton Hopkins Pty Ltd (“Picton Hopkins”), which was at the relevant time a significant competitor of the plaintiff in the manufacture of mouldings;

Mr Russell Shaw, who was, at the period of which the evidence in question relates, national business manager, gypsum products, of the first defendant;

Mr David Cree, who was at the relevant time managing director of TW Ingham & Sons (“Ingham”), which carried on in South Australia a similar business to that of the plaintiff and Picton Hopkins in Victoria.

Counsel for the defendants submitted that parts of the evidence proposed to be called from these witnesses constituted similar fact evidence and as such was in the present case inadmissible.

1. Following the example of Ashley J in Bennett & Bennett v LPC Holdings & JE Abel Real Estate Pty Ltd [1998] VSC 55, where a similar issue arose in a similar context, I heard each of the witnesses on a voir dire. The portions of their evidence as to which questions of admissibility arose may, for present purposes, be briefly summarised. At this stage I am, of course, not concerned with the weight to be placed upon any of that evidence, but merely with its admissibility.

1. Mr Andrew Hopkins said that in middle to late 1993 Mr Vikram Tripathi had visited the Picton Hopkins factory in company with Mr Wearne and Mr Shaw.   I do not believe it to be in issue that Mr Tripathi was an employee of the third defendant.   Mr Andrew Hopkins had shown Mr Tripathi some of the mouldings which that company was manufacturing, and Mr Tripathi had said that Duracal would be “terrific for what we were doing”.   Mr Wearne was present at the time, but Mr Andrew Hopkins could not remember whether Mr Wearne said anything.   Picton Hopkins used Duracal for about six months, but then began having problems in that products manufactured with Duracal were failing.

1. Mr Shaw said that around 1993-1994 he had told Mr Cree that Duracal could be used in external applications.    Mr Tripathi had come from the United States to introduce industrial gypsum products, including Duracal, to Australia, those products being distributed by the first defendant.   He had been present in 1993 when Mr Andrew Hopkins told Mr Tripathi that he had a project to do with the outside of a building, and Mr Tripathi had responded by telling him about Duracal.   Mr Wearne had not taken much part in the conversation.

1. Mr Cree said that he had discussed Duracal with Mr Shaw at a trade conference on October 1994.   He had further discussions with him on the subject by telephone in November 1994, and Mr Shaw had told him that Duracal would be ideal for external use.   His company subsequently used Duracal for a time, but after about six or nine months began having problems, in that products manufactured with Duracal were failing.

1. Mr Fitzgerald, for the plaintiff, submitted that that evidence was relevant to the claims set out in [2] and [3] above.   Mr Galvin, for the defendants, submitted that the evidence of a representation by Mr Tripathi to a person other than the plaintiff was of no relevance, because there was no claim that any representation had been made to the plaintiff by Mr Tripathi;  the claim was of a representation by Mr Wearne.   However, the plaintiff’s relevant action is not brought against Mr Wearne, but against the first defendant.   Mr Tripathi was an employee of the third defendant, and the first defendant was the Australian distributor of the produce of the third defendant.   The similarity between the names of the two corporations would suggest there was some closer relationship between them, but there is no evidence before me on that part. However, Mr Tripathi visited Mr Andrew Hopkins in the capacity of an employee of the third defendant, and in company with Mr Shaw and Mr Wearne, both of whom were employees of the first defendant.   That being so, I consider that in all the circumstances the evidence of a representation by Mr Tripathi is sufficiently similar to the claim of a representation by Mr Wearne, an employee of the first defendant, to be relevant in the proceeding against the first defendant.   That is, in terms of the analysis by Batt JA in Cousens v Grayridge Pty Ltd [2000] VSCA 96 at [47] and [49], that the common characteristics of the evidence in question and the fact in issue were sufficiently significant to be similar facts “for the purpose of the inquiry at hand”. I now turn to consider the admissibility of that evidence in the context of the relevant principle of law.

The law

1. In support of his submission that the evidence was admissible, Mr Fitzgerald relied on the decisions of Northrop J in Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 and Ellicott J in Gates v City Mutual Life Assurance Society Ltd (1982) 43 ALR 313 to admit, in claims under section 52 of the Trade Practices Act, evidence of representations to other persons which were similar to representations claimed to have been made to the plaintiff. Northrop J, at 30, adopted the test enunciated by Dixon J in Martin v Osborne (1936) 55 CLR 367 at 375-7 in the following terms:

But the class of acts and occurrences that may be considered includes circumstances whose relation to the fact in issue consists in the probability or increased probability, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed.

1. Mr Galvin relied on the decision of St John J in HW Thompson Building Pty Ltd v Allen Property Services Pty Ltd (1983) 48 ALR 667 where His Honour refused to admit certain similar fact evidence, and in so doing expressly declined to follow the decisions of Northrop J and Ellicott J, while relying on the recent re-affirmation by the High Court in Markby v R (1978) 21 ALR 448 and Cooper v R (1961) 105 CLR 177 of the principles excluding similar fact evidence stated in Makin v Attorney-General (NSW) [1894] AC 57. The decision of St John J was followed by Spender J in Boyce v Cafred Pty Ltd (1984) 4 FCR 367.

1. However, those decisions all relate to the admissibility of similar fact evidence in criminal trials, as to which different considerations apply from those in the case before me.   (The position in a civil jury trial may well be regarded in this context as analogous to that in a criminal trial, but that question is not before me.)   I note that Batt JA, in Cousens v Grayridge, did not suggest that similar fact evidence was prima facie inadmissible in civil proceedings.

1. Similarly Smith J in Cornell v Kennett [2000] VSC 273 at [18] said simply, after quoting the decision of the Magistrate whose decision was under appeal to admit similar fact evidence:

It seems to me that it was plainly relevant and therefore admissible unless there was a rule to exclude it.

1. Having considered the authorities, I would adopt the conclusion of the editors of the current Australian edition of Cross on Evidence, to which I was referred by Mr Fitzgerald.   The authors say, summarising at page 231,134 their examination of the admissibility of similar fact evidence in civil cases:

The main trends in the modern cases support the view that the criminal tests do not apply;  that the essential criterion for admissibility is relevance;  that there is no discretion to exclude the evidence on the ground that its prejudicial effect exceeds its probative value;  but that there is a discretion to exclude evidence, which is only remotely relevant or has small probative value compared to the additional issues which it would raise and the additional time required for their investigation, or which might tend to confuse the jury as to the real issues.

1. Mr Galvin, rightly, did not suggest that any question of additional time or additional investigation arose in this case.   Outlines of evidence of all three witnesses had been provided in advance of the hearing, and there was no issue as to notice.   The evidence itself was heard on the voir dire, in relatively short compass.

Conclusion

1. I am satisfied that those parts of the evidence from the voir dire, the admissibility of which is here in issue, meet the criterion cited by Northrop J from Martin v Osborne (see [10] above).   That being so, I regard them as sufficiently relevant and probative to be admitted into evidence in the proceeding.

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