Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd

[2008] NSWSC 1156

CITATION:	Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd [2008] NSWSC 1156
HEARING DATE(S):	29 October 2008
JUDGMENT DATE :	29 October 2008
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Some documents rejected and one admitted as business documents.
CATCHWORDS:	EVIDENCE [121] - Documentary evidence - Statutory provisions relating to business records – In general – Evidence Act s 69 - Source of knowledge of asserted fact – Whether draft agreement business document.
LEGISLATION CITED:	Evidence Act 1995 s 69
CATEGORY:	Procedural and other rulings
CASES CITED:	ASIC v Rich (2005) 216 ALR 320 Timms v Commonwealth Bank of Australia [2003] NSWSC 576
PARTIES:	5533/06 Lym International Pty Limited (P1) Limin Yang (P2) Yang Liu (P3) Yu Po Chen (D1) Westpac Banking Corporation (D2) 5049/07 Leonilda Marcolongo (P) Lym International Pty Limited (D1) Yu Po Chen (D2)
FILE NUMBER(S):	SC 5533/06; 5049/07
COUNSEL:	T S Hale SC & S A Wells (Lym International, Yang & Liu) D R Pritchard SC & J S Emmett (Chen) T A Alexis SC & D H Mitchell (Marcolongo) Submitting appearance (WBC)
SOLICITORS:	TressCox Lawyers (Lym International, Yang & Liu) Middletons (Chen) Dunstan Legal (Marcolongo) Henry Davis York (WBC)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

WEDNESDAY, 29 OCTOBER 2008

5533/06 LYM INTERNATIONAL PTY LIMITED & ORS v YU PO CHEN & ANOR
5049/07 LEONILDA MARCOLONGO v LYM INTERNATIONAL PTY LIMITED & ANOR

JUDGMENT - Re admissibility of calculations of indebtedness of Shenzhen to Heard Park and draft agreement (see T 872)

1 HIS HONOUR: The question before me is the admissibility of certain calculations of indebtedness of a company called Shenzhen Richstar Communication Company Limited (“Shenzhen”) to a company called Heard Park Ltd (“Heard Park”).

2 Mr Paul Chen, the first defendant in proceedings 5533/06, swears in pars 9, 10 and 11 of his affidavit of 27 October 2008 that he gave Jasmine Liu (“Jasmine”) certain instructions concerning the preparation of these documents while she was working for Heard Park and that he was shown some documents of the description now proffered on her laptop computer in February 2006.

3 He subsequently, between February and July 2006, observed Jasmine working on those spreadsheets on her laptop and asked her how much the spreadsheets showed were owing under particular loans.

4 Paragraphs 9, 10 and 11, are admitted in the trial because, although they go in part to the admissibility of these documents, they also have other significance in the trial.

5 Jasmine has not been shown these particular documents but has denied that she ever worked for Heard Park which, if accepted, makes Mr Chen’s version in pars 9, 10 and 11 impossible.

6 The documents that are tendered are proffered in pars 7(a), (b) and (c) of the same affidavit.

7 The evidence supporting the tender tends to show that the documents were business documents within the meaning of s 69 of the Evidence Act 1995 (“the EA”), as being documents that form or formed part of the records kept by Heard Park. However, s 69(2) of the EA also requires that, for documents to evade the hearsay rule, it must be established that the relevant representations in the document were made (a) by a person who had, or might reasonably be supposed to have had, personal knowledge of the asserted fact or (b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had the relevant knowledge.

8 I also note that it is contended that the submission made to me is that Mr Chen is to be regarded as the provider of information for the purposes of s 69(2)(b). There is no evidence of him furnishing relevant information to Jasmine or of her access to relevant documentary information.

9 There is not only evidence from Mr Chen but evidence from two persons who were present in the relevant office, that Jasmine appeared to work there during the relevant period. However, the evidence as to what she did is very vague. Some of the evidence indicates that she worked on the form or drafting of contracts, which is not relevant material to the documents now tendered. There is one passing statement in the affidavit of a Ms Rui that she, as an accounts clerk, kept the records relating to indebtedness under the relevant contracts and that she “would share this task with Jasmine”. That is an expression almost devoid of content.

10 I find it impossible at the present time, on this body of evidence, to conclude in the requisite way that Jasmine was a person who satisfies the requirements of s 69(2) of the EA. I cannot come to the conclusion, on this thin material, that Jasmine should “reasonably be supposed to have had personal knowledge of ‘the relevant facts’ or that the representations based on information directly or indirectly supplied by a person who had or might reasonably be supposed to have had such personal knowledge.”

11 In those circumstances, the requirements of s 69, on the material now before me, are not fulfilled. The hearsay rule is not displaced and I reject the tender of the documents now proffered. The consequence is that I reject par 7(a), (b) and (c).

…oOo…

12 Objection is also taken to par 7(d) of the same affidavit. The document tendered through par 7(d) is a draft agreement concerning the advance of $4.5 million for the purpose of the Golf Avenue, Mona Vale development. Whether or not the document is ultimately treated as a business document will depend upon a resolution of the conflict between the word of the first defendant and Jasmine’s word concerning whether she typed it or not, because it is put forward solely on the basis that it was she who typed it. Her evidence to date controverts this.

13 However, a draft agreement is not precluded from being a business document by the fact that it is a draft only: Timms v Commonwealth Bank of Australia [2003] NSWSC 576 at [17]; ASIC v Rich (2005) 216 ALR 320 at [188].

14 Whilst it is in itself equivocal, the existence of a draft agreement in the company’s records may tend to prove that an agreement was entered into, albeit the agreement is alleged to have been entered into orally. Subject therefore to accepting that it was created in the circumstances of which the first defendant has given evidence, the document would be admissible as a company record by reason of having the relevance that I have indicated.

15 In those circumstances, the conclusion that I come to at the present time is that par 7(d) should be admitted and should carry into evidence the document at CB 2794-2805.

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