Idoport Pty Limited v National Australia Bank Limited and 8 Ors; Idoport Pty Limited and Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [33]
[2001] NSWSC 670
•31 July 2001
CITATION: Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [33] [2001] NSWSC 670 FILE NUMBER(S): SC 50113/98; 50026/99; 3991/00 HEARING DATE(S): 30/7/01 JUDGMENT DATE:
31 July 2001PARTIES :
Idoport Pty Limited (Plaintiff)
Market Holdings Pty Limited (Plaintiff)
National Australia Bank Limited (Defendant)
Donald Robert Argus (Defendant)JUDGMENT OF: Einstein J
COUNSEL : Mr JJ Garnsey QC, (Plaintiffs)
Mr J Sackar QC, Mr J Halley, Ms K Williams (Defendants)SOLICITORS: Withnell Hetherington (Plaintiffs)
Freehills (Defendants)CATCHWORDS: Evidence Act - S.78 lay opinions - Principles LEGISLATION CITED: Evidence Act S.78, S 135(a) (b) (c) CASES CITED: Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2001] NSWSC 529
Orduka v Hicks (unreported CA 40397/99, 19 July 2000, New South Wales Court of Appeal]DECISION: Evidentiary rulings given in relation to paragraphs identified in the judgment.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION – COMMERCIAL LIST31 July 2001 ex tempore
Revised 7 August 2001IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS; IDOPORT PTY LIMITED & MARKET HOLDINGS PTY LIMITED v DONALD ROBERT ARGUS; IDOPORT PTY LIMITED (“JMG”) v NATIONAL AUSTRALIA BANK LIMITED
50113/98; 50026/99; 3991/00
EINSTEIN J:Judgment
1 HIS HONOUR: Rulings were given last week in relation to objections taken by the defendants to the admissibility of sections of the statement of Mr Steven James made on 7 July 2000. The defendants have been permitted to further address in relation to aspects of certain of those rulings with special emphasis upon the defendants' submission that in addition to particular sections of the statement being said to fall outside the purview of section 78 of the Evidence Act [the principles and approach to be taken in relation to that section having been dealt with in some detail in the judgment [2001] NSWSC 529], section 135 of the Evidence Act should dictate a rejection of the evidence.
2 Insofar as Mr Sackar QC relies upon section 135, the submission was simply that the probative value of the evidence sought to be read from the statement and as amplified by evidence given in-chief pursuant to leave was substantially outweighed by the danger that the evidence might, and Mr Sackar submitted clearly would, be unfairly prejudicial to the defendants, would be misleading or confusing and/or would cause or result in undue waste of time.
3 Although Mr Sackar put his submissions in a number of ways, the gravamen of those submissions was that for one reason or another the admission of the evidence would place the cross-examiner in an invidious forensic position which the court should not tolerate. The particular context in which this issue arose concerns contemporaneous statements of opinion by Mr James which are not put forward in terms of any suggestion that he is a section 79 expert having appropriate specialised knowledge upon the basis of which to express these opinions. The plaintiffs had submitted only that these opinions satisfy the terms of section 78.
4 The defendants take the stance that the nature of the contemporaneous opinions sought to be adduced from Mr James makes it clear that this type of evidence could not be anything otherwise than opinions adduced from an expert. The proposition highlighted for example the form of certain of these opinions, the submission being that these could not possibly qualify as lay opinions. The submission was that the defendants could not dress up what could only be section 79 opinions and put them forward as lay opinions. Everything depended upon the context and the particular opinions sought to be expressed, and of course the words in which the opinions were sought to be expressed.
5 The defendants submit that the plaintiffs cannot, by seeking to mobilise section 78, outflank the requirement that what is in effect suggested to be expert evidence be adduced from a person having the specialised knowledge required by section 79. The defendants submit that this is in fact what the plaintiffs should be seen to be doing and that this should not be permitted. The submission was that in a de facto sense, the defendants were obliged to approach the cross-examination of Mr James in exactly the same way as they would have had to treat with his evidence had he been put forward as a section 79 witness.
6 Several of Mr Sackar's submissions go to the proposition that the so-called section 78 opinions from Mr James are simply incapable of being tested by reason of the form in which they are expressed and by reason of the fact that there is no evidence that those contemporaneous opinions were ever expressed by Mr James to any person.
7 Mr Sackar took the court to certain of these so-called opinions for the purpose of seeking to demonstrate that they contained implicit assumptions and further, treated at such a high level of generality, that it was grossly unfair to the defendants to have this evidence admitted as the defendants would have the most difficult of tasks in endeavouring to cross-examine on material which, once admitted, might be relied upon by the plaintiffs in terms of the suggestion in final argument that weight should be given to the evidence.
8 Mr Sackar's other submissions were transcribed and include certain submissions that the evidence given by Mr James in the witness box in purported amplification of sections of his statement ultimately revealed a degree of confusion, such that the defendant should simply not be obliged to have to cross-examine on that material.
9 At the outset, I reject as misconceived any proposition that the only evidence capable of being given in terms of all of the opinion evidence sought to be adduced from Mr James is evidence which would require to satisfy section 79. [I interpolate that I did not understand Mr Sackar to advance a submission in such a generalised way].
10 Section 78 substantially alters the common law by permitting lay opinion to be given by a person whose opinion is based on what the person saw, heard or otherwise perceived about a matter or event. There is, in my view, substance in the submission that certain of those opinions may be rejected as either irrelevant and more particularly pursuant to section 135 (a), (b) or (c) of the Evidence Act.
11 I accept that section 78 should be construed as requiring a rational basis for the opinion before it becomes admissible. I further accept that it is necessary for the transparency of reasoning processes underlying the giving, even of a section 78 opinion, to be made explicit.
12 These propositions were either stated in the judgment [2001] NSWSC 529 dealing with the section 78 issues relating to the evidence of Mr Ling, or are not inconsistent with that judgment.
13 As with Mr Ling, Mr James is a witness who has apparently had a particular involvement in the financial planning industry. He worked as a financial planner with the NAB and was often visited by representatives of fund managers calling on him and attended at industry conferences. His evidence discloses that he apparently had a deal of interchange with persons from the industry. While he was with NAFM he worked as a business development manager in selling NAFM products, it then being his role to travel around and meet financial planners from various organisations and once again to attend conferences. His role at InvestmentLink as national sales and marketing manager required him to travel around the whole country meeting with representatives from both fund managers and financial planners alike. In due course, Mr James joined AUSMAQ and remained there from September 1997 until June 1999. His role is said to have become the business development manager.
14 Against that background, it seems to me that subject only to the requirement that contemporaneous subjective opinions of Mr James satisfy the criteria provided for by section 78 as detailed in the Ling judgment, and subject to the defendants' section 135 objections, the plaintiffs have every entitlement to elicit evidence from Mr James as to opinions on matters relevant to issues in the proceedings and importantly including opinions going to the perceptions of persons in the market as to the importance of a number of sub-parameters going to the AUSMAQ value proposition. In many ways, Mr James has the same entitlement to give section 78 opinion evidence as had Mr Ling.
15 An important aspect of any attempt to give section 78 opinion evidence is of course that it must have a relevance to issues within the meaning of section 55. It is also important to recognise that evidence from a person such as Mr James to the effect that he was informed by many people with whom he dealt in the financial planning industry that for example there was a demand for superannuation product functionality would be factual evidence. This is not section 78 opinion evidence, although Mr James, from those discussions and conversations, may have formed a subjective view that there was such a demand. In truth, that subjective opinion or view amounts to no more than a reflection of what he heard. Indeed, section 78 requires that the opinion be based on what he saw, heard or otherwise perceived about the relevant matter or event.
16 But when Mr James goes further and seeks to give evidence that he believed that AUSMAQ had an unique window of opportunity to acquire a substantial part of the investment market, he is moving outside of reciting an opinion based upon what he was told as to the demand and into areas far more akin to those usually treated with by section 79 experts. Even if such an opinion does satisfy section 78, the area requires close treatment in terms of both section 55 as well as the arguable application of section 135 discretion to reject the evidence.
17 Both the question of whether the opinions as amplified are firstly relevant, secondly satisfy section 78, and thirdly should be rejected by reason of the section 135 applications can only be resolved by a close reading of the transcript. In dealing with those objections, I take into account the emphasis placed by Sheller and Meagher JJA in Orduka v Hicks (unreported CA 40397/99, 19 July 2000, New South Wales Court of Appeal) on the qualification of the term "prejudice" in section 135(a) of the Act, by the term "unfair". I also take into account the holding by Mason P in Orduka in relation to the core notion of "unfair prejudice", and the proposition that the provision is not limited to misuse of evidence by tribunals of fact so that unfair prejudice may arise from procedural considerations.
18 Ultimately, it is necessary for the court to rule on the particular sections of the statement of Mr James which were the subject of further objection following the giving of supplementary evidence from the witness box.
19 The court's rulings are as follows:
20 I allow the section sentence commencing "Whilst it is fair". The ruling is "allow summary oral evidence".
21 I allow the third sentence commencing "As at March". The ruling is "allow summary oral evidence."
22 I allow the fourth and fifth sentences. The fourth sentence commences "It was". The fifth sentence commences "As I have". The ruling is "allow summary oral evidence."
23 I reject the sixth sentence commencing "Had AUSMAQ ...". If, without deciding the matter, this evidence satisfies section 78 and is relevant, its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the defendants, be misleading or confusing or cause or result in undue waste of time.
24 I allow the final sentence. The ruling is "allow summary oral evidence".
25 I allow the second and third sentences. The ruling is "allow summary oral evidence."
26 I allow the second sentence. The ruling is "allow summary oral evidence".
27 I allow the final sentence. The ruling is "allow summary oral evidence."
28 I allow this paragraph. The ruling is "allow summary oral evidence."
29 I allow the second and third sentences of paragraph 18. The ruling is "allow summary oral evidence".
30 I allow the second sentence of paragraph 19. The ruling is "allow summary oral evidence".
31 I allow the fourth sentence but reject the words "which was essentially designed to enable transactions to take place" of paragraph 19. The ruling is "allow summary oral evidence".
32 I allow the sentence commencing "That latter step". I allow the sentence commencing "The only logical conclusion". The ruling is "allow summary oral evidence."
33 I allow so much of the third sentence as was objected to being the section commencing with the words "And in the absence". The ruling is "allow summary oral evidence".
34 I reject the seventh and eighth sentences, the seventh sentence beginning "I believe", and the eighth sentence commencing "In order". If, without deciding the matter, this evidence satisfies section 78 and is relevant, its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the defendants, be misleading or confusing or cause or result in undue waste of time.
35 The transcript records leave being granted to the defendants to revisit the rulings given last week so as to re-agitate matters which may recur through much of the very extensive later evidence to be mobilised by both parties. The further argument which the court permitted clarified the areas to which I have already referred where evidence of what is in truth evidence of fact is given. These reasons should serve to assist in drawing the distinction between evidence of fact and section 78 evidence as and when that matter is treated with hereafter.
Note: Subsequent to delivery of the ex tempore judgment the plaintiffs agreed to accept a ruling on the 4th sentence of paragraph 11 as “Op/Subj” [transcript 11699-11700]
I certify that paragraphs 1 – 35 and the
above note are a true copy of the
reasons for judgment herein of the
Hon. Justice Einstein
given on 31 July ex tempore and revised
on 7 August 2001
_______________________
Susan Piggott
Associate
7 August 2001
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