Jacara Pty Ltd v Perpetual Trustees WA Ltd

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FEDERAL COURT OF AUSTRALIA

Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886

EVIDENCE – tendency evidence – application to adduce evidence of representations made to other prospective tenants of respondent’s shopping centre – whether evidence “tendency evidence” within s 97 of Evidence Act 1995 (Cth) – whether primary judge erred in holding that the evidence lacked “significant probative value” – test for determining whether tendency evidence has “significant probative value”.

EVIDENCE – “credibility rule” in s 102 of Evidence Act 1995 (Cth) – refusal to permit cross-examination on representations allegedly made to other prospective tenants – whether cross-examination relevant for reason other than credibility – whether evidence from cross-examination would have had “substantial probative value” in relation to credibility.

WORDS AND PHRASES – “significant probative value” – “substantial probative value”.

Trade Practices Act 1974 (Cth), ss 51A, 82.
Evidence Act 1995 (Cth), ss 55, 56, 95, 97, 98, 101, 102, 103, 106, 108, 135, Dictionary.

D F Lyons Pty Ltd v Commonwealth Bank of Australia (1991) 28 FCR 597, cited.
Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621, cited.
Papakosmos v the Queen (1999) 196 CLR 297, cited.
Martin v Osborne (1936) 55 CLR 367, cited.
Hoch v the Queen (1988) 165 CLR 292, considered.
Harriman v the Queen (1989) 167 CLR 590, considered.
R v Ball [1911] AC 47, cited.
R v A H (1997) 42 NSWLR 702, cited.
Turner v Jenolan Investments Pty Ltd (1985) ATPR 40-571, cited.
Dayteck Pty Ltd v Glen Centre (unreported, Supreme Court of Victoria, Eames J, 8 May 1995), cited.
Pfennig v the Queen (1995) 182 CLR 461, cited.
Mood Music Publishing Co Ltd v De Wolfe Ltd [1976] Ch 119, cited.
Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23, cited.
Gates v City Mutual Life Assurance Society Ltd (1982) 68 FLR 74, cited.
Aroutsidis v Illawara Nominees Pty Ltd (1990) 50 FCR 500, cited.
Sheldon v Sun Alliance Australia Ltd (1989) 53 SASR 97, considered.
Grivas v Brooks (1997) 69 SASR 532, cited.
Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171, considered.
R v Lockyer (1996) 89 A Crim R, cited.
R v Martin [2000] NSWCCA 332, cited.
Ogden Industries Pty Ltd v Lucas [1970] AC 113, cited.
Brennan v Comcare (1994) 50 FCR 555, cited.
Fleming v Hutchinson (1991) 66 ALJR 211, cited.
Norbis v Norbis (1986) 161 CLR 513, cited.
House v the King (1936) 55 CLR 499, cited.
Palmer v the Queen (1998) 193 CLR 1, cited.
R v RPS (unreported, NSW Court of Criminal Appeal, 13 August 1997), cited.
R v Beattie (1996) 40 NSWLR 155, cited.
Department of Justice v Hepburn (1999) 93 FCR 508, cited.
Paterson v Paterson (1953) 89 CLR 212, cited.

Australian Law Reform Commission, Evidence, Report No 26 (Interim) (1985).

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Details
Case
[2000] FCA 1886
Decision Date

CaseChat Overview and Summary

In Jacara Pty Ltd v Perpetual Trustees WA Ltd, the appellants, including Jacara, Mr Williams, and Ms Gordon, sought to set aside the judgment of the primary Judge and order a new trial on the application and cross-claim. They contended that the primary Judge erred in dismissing a motion seeking to admit five affidavits from tenants of the Centre, which provided similar fact evidence of representations allegedly made by Ms Kelly. The tenants' affidavits detailed claims about increases in pedestrian traffic, business profitability, and ease of rent payments following the redevelopment of the Centre. The central legal issue was whether the primary Judge correctly excluded this evidence under the Evidence Act 1995 (Cth), particularly in light of the statutory exceptions to the credibility rule.

The court examined whether the evidence had significant probative value as required by section 97(1) of the Evidence Act. The primary Judge dismissed the motion, finding that the differences in the tenants' accounts undermined the probative value of their evidence. The court upheld this decision, concluding that the evidence did not reveal striking similarities or a pattern necessary to meet the threshold for significant probative value. The appeal was dismissed, and the appellants were ordered to pay the respondent's costs.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellants pay the respondent’s costs.

Background

Background to the litigation

Jacara, Mr Williams and Ms Gordon appealed, seeking orders setting aside the judgment of the primary Judge and ordering a new trial on the application and cross-claim. The appellants contended, inter alia, that the primary Judge erred in an interlocutory judgment, delivered on 15 April 1999, in which his Honour dismissed a motion by Jacara seeking an order admitting into evidence five affidavits sworn by tenants of the Centre who gave “similar fact evidence” concerning representations allegedly made to them by Ms Kelly. The appellants acknowledged that the judgment of 15 April 1999 was interlocutory, but argued that they were entitled to raise the evidentiary question in an appeal as of right against the final orders made by the primary Judge. Perpetual did not dispute that this was the case, and the appeal was conducted on the basis that leave was not required.THE FACTUAL BACKGROUND The Centre was located near Dandenong in Victoria. At all material times, it was an asset of the GEM Retail Property Trust of which Perpetual was the trustee. Between February 1994 and November 1995, the Centre was redeveloped. The redevelopment took place in three stages. Stage 1 of the redevelopment involved the refurbishment of the fresh food precinct. Stage 1 was opened on 10 October 1994, although at that date some shops and kiosks within the fresh food precinct were still vacant. Stage 2 of the redevelopment had two components: Stage 2A, which was completed in April or May 1995, comprised the north-west mall adjacent to the fresh food precinct; Stage 2B, which was completed in June or July 1995, comprised the redevelopment of the east and north malls. Stage 3 comprised the food court, a “Big W” store and some specialty shops. It opened in about November 1995. On 6 December 1994, Jacara entered into a deed of agreement with Perpetual for a lease of Shop K9 (a kiosk) in the fresh food precinct (Stage 1 of the development). Jacara also executed a form of lease annexed to the agreement. The lease was for a term of five years from 13 December 1994, with an initial rent of $25,000 per annum. Under the lease, the kiosk was to be used for the purposes of a “Cookie Man” franchise, including the baking and retail sale of cookies and associated products. Mr Williams and Ms Gordon, the directors of Jacara, executed a guarantee of Jacara’s obligations under the lease. Negotiations leading to the lease of the kiosk commenced in June 1994. The initial negotiations were between Ms Kelly, a leasing executive employed by Growth Equities Mutual Ltd, and Mrs Evelyn Hicks, the principal of the Cookie Man franchisee, Auto-Bake Pty Ltd (“Auto-Bake”). These negotiations led to Auto-Bake making an offer on 7 October 1994 to lease Shop K9 in the Centre. The offer specified that the lessee was a “franchisee to be advised”. Later in October 1994, Mrs Hicks introduced Mr Williams to the Centre. Mr Williams had a meeting, which the primary Judge found probably took place on 28 October 1994, with Mr Robert Hipwell, a Cookie Man franchisee who acted as a consultant to Auto-Bake. This meeting was important, because Jacara alleged that Mr Hipwell passed on to Mr Williams various representations that had been made to Mr Hipwell by Ms Kelly. According to Mr Williams, his son, Vaughan Williams, was present at the meeting.

Evidence

Evidence Before The Court

The parties were in dispute as to whether the primary Judge also found that, even if representations (i), (j), (k) and (l) had been made, Mr Williams had not relied on those representations. The appellants maintained that no such finding had been made, while Perpetual contended that the primary Judge had intended to make such a finding. Without conceding that a finding had in fact been made, the appellants were granted leave during the hearing to file an amended notice of appeal challenging any adverse finding on the question of reliance. THE EVIDENCE ACT The argument concerning the admissibility of evidence requires reference to provisions of the Evidence Act 1995 (Cth). Section 56 provides as follows:“56 (1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding.(2)Evidence that is not relevant in the proceeding is not admissible.” The concept of relevant evidence is defined in s 55(1):“55 (1) The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.(2) In particular, evidence is not taken to be irrelevant only because it relates only to:(a)the credibility of a witness; or…”.The Evidence Act does not define the expression “significant probative value”. Part 1 of the Dictionary does, however, define “probative value” as follows:“probative value of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue”. Section 97(1) sets out what the Evidence Act describes as the “tendency rule” (see Dictionary, Part 1). Section 97(1) provides as follows:“97 (1)Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person’s character or otherwise) to act in a particular way, or to have a particular state of mind, if:(a)the party adducing the evidence has not given reasonable notice in writing to each other party of the party’s intention to adduce the evidence; or(b)the court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.” Section 95(1) of the Evidence Act is relevant to the operation of s 97(1). Section 95(1) provides as follows:“95(1) Evidence that under this Part is not admissible to prove a particular matter must not be used to prove that matter even if it is relevant for another purpose.” Section 102 of the Evidence Act provides that evidence that is relevant only to a witness’s credibility is not admissible. This is known as the “credibility rule”. The term “credibility” is defined in Part 1 of the Dictionary:“credibility of a witness means the credibility of any part or all of the evidence of the witness, and includes the witness’s ability to observe or remember facts and events about which the witness has given, is giving or is to give evidence.”

Decision

Reasons for decision

The deponents gave evidence, in varying terms, that Ms Kelly had made representations about likely increases in pedestrian traffic following the redevelopment of the Centre, the likely turnover and profitability of their businesses and the ease with which each would be able to pay the rent. All deponents were or had been involved in litigation with Perpetual concerning their leases in the Centre and had alleged misleading or deceptive conduct on its part.THE JUDGMENT ON THE MOTION In a judgment delivered on 15 April 1999, the primary Judge dismissed Jacara’s motion: [1999] FCA 417. His Honour considered common law decisions to be useful as illustrations of the circumstances in which tendency evidence might have “significant probative value” for the purposes of s 97(1) of the Evidence Act. He said this (at [11]):“In Perry v The Queen (1982) 150 CLR 580 at 586 Gibbs CJ said that to be admissible similar fact evidence must have a ‘strong degree of probative force’. The fact that it has some probative value is not enough. In Hoch v The Queen (1988) 165 CLR 292 at 294-295 Mason CJ, Wilson and Gaudron JJ said that ‘assuming similar fact evidence is to be relevant to some issue in the trial the criterion of its admissibility is the strength of its probative force’. They went on to say that this ‘strength’ lies in the fact that the evidence reveals striking similarities, unusual features, underlying unity, system or pattern such that it raises, as a matter of common sense and experience, the objective improbability of some event having occurred other than as alleged. See also Boyce v Cafred Pty Ltd (1984) 4 FCR 367 at 370-371. As Lehane J said in [Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171 at 176], ‘where in reported cases evidence of this kind has been admitted, it has been, as a matter of common sense, clearly and strongly probative of the relevant fact in issue’.” The primary Judge summarised the evidence of the five deponents and noted that there were significant differences between the accounts given by Mr Williams and each of the deponents. The test of relevance posed by ss 55 and 56 was whether the evidence of the five deponents could rationally affect the probability that Ms Kelly made the representations alleged. In view of the differences between the various accounts, the primary Judge expressed “doubt” as to whether their evidence could rationally affect the assessment of the probability that Ms Kelly told Mr Williams that there would be a substantial increase of between 50 and 60 per cent in the number of customers after completion of the development (representations (a) and (b)). However, his Honour said (at [14]) that he was “quite clear that, whether taken alone or in conjunction with Mr Williams’ evidence, the evidence sought to be admitted does not have significant probative value. The differences to which I have referred make it impossible to say that the evidence reveals striking similarities, unusual features, underlying unity, a system or pattern of behaviour, or a business practice, so as to endow what was said with the ‘strength’ required for evidence to have significant probative value.”

Ratio Decidendi

Legal Principle Established

The statutory concept of “substantial probative value” is, however, given an extended meaning by s 103(2). In determining whether the evidence has substantial probative value, the court is to have regard, inter alia, to whether the evidence tends to prove that the witness knowingly or recklessly gave false evidence when under an obligation to tell the truth. It has been held by the New South Wales Court of Criminal Appeal that the Dictionary definition of “probative value” (see [18] above) does not apply to s 103 both because of its subject matter and the specific terms of s 103(2): R v RPS (unreported, 13 August 1997). Hunt CJ at CL, with whom Gleeson CJ and Hidden J agreed, said this:“Evidence adduced in cross-examination must…have substantial probative value in the sense that it could rationally affect the assessment of the credit of the witness…. The addition of the word ‘substantial’ nevertheless imposes a limitation upon the common law, when almost anything was allowed on the issue of credit unless it clearly had no material weight whatsoever upon that issue”. (Emphasis added.) Section 106 provides that the credibility rule does not apply to certain kinds of rebuttal evidence. In particular, it does not apply to rebuttal evidence that tends to prove that a witness has knowingly or recklessly given false evidence when under an obligation to tell the truth: s 106(e). Section 108 creates additional exceptions to the credibility rule. These include evidence adduced in re-examination and evidence given, with the leave of the court, of prior consistent statements: s 108(1), (3). This legislative scheme broadly reflects the recommendation of the Commission in its reports on Evidence: Interim Report, vol 1, pars [817]-[820]; Final Report, pars [179]-[181], Draft Bill, cll 94, 96, 99, 101.DID THE PRIMARY JUDGE ERR IN EXCLUDING THE EVIDENCE? It will be recalled that the primary Judge declined to permit Ms Kelly to be cross-examined as to whether she made representations to the tenants who had made affidavits. It follows from the legislative scheme I have outlined that the evidence sought to be adduced should not have been rejected by reason of the credibility rule in s 102 of the Evidence Act if it· was relevant for a reason other than going to Ms Kelly’s credibility; or· had “substantial probative value” in the sense required by s 103 of the Evidence Act. Mr Moshinsky submitted that the cross-examiner’s questions should have been allowed because Ms Kelly’s answers may have been relevant, not merely to her credibility, but to a fact in issue. This submission encounters the difficulty that the answers, for reasons already given, could only have been relevant (otherwise than in relation to credibility) as tendency evidence. Accordingly, the evidence would not have been admissible if the primary Judge considered that it did not have “significant probative value” within the meaning of s 97(1). That was precisely the view he formed.