Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd
[2008] NSWSC 1110
•21 October 2008
CITATION: Lym International Pty Ltd v Chen; Marcolongo v Lym International Pty Ltd [2008] NSWSC 1110 HEARING DATE(S): 15 & 16 October 2008
JUDGMENT DATE :
21 October 2008JURISDICTION: Equity JUDGMENT OF: Hamilton J DECISION: Material tendered as evidence of admissions admitted. CATCHWORDS: EVIDENCE [88] – Admissions and declarations – Admissions – Who may make – Agents – Evidence Act 1995 s 87(1)(b) – General manager of company and of affairs of director. LEGISLATION CITED: Evidence Act 1995 ss 87 & 135
Partnership Act 1890 s 15CATEGORY: Procedural and other rulings CASES CITED: Galvin v the Queen [2006] NSWCCA 66
Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Ltd [No 4] [2006] NSWSC 90
Ordukaya v Hicks [2000] NSWCA 180
R v Suteski (2002) 56 NSWLR 182TEXTS CITED: Bowstead & Reynolds on Agency (17th ed, 2001) [8-204] n 59 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
TUESDAY, 21 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 the admissibility of parts of pars 33, 36, 39 and 46 in the affidavit of Ian James Richmond sworn 5 December 2007 (see T379)
1 HIS HONOUR: The subject matter of this judgment is the admissibility of certain passages in the affidavit of Ian James Richmond sworn 5 December 2007. The relevant passages are parts of pars 33, 36, 39 and 46 of that affidavit. Those parts are evidence by Mr Richmond of statements made to him by Sandy Lai on the basis that those statements, which would otherwise breach the hearsay rule, are admissible as admissions against both Lym International Pty Limited (“Lym International”) and against Limin Yang (“Ms Yang”).
2 The alleged admissions are that:
- (a) there has been a rift between Limin Yang and William Mao: Richmond - 5.12.07 at [33];
(b) excessive progress claims and overpayments were authorised by William Mao: Richmond - 5.12.07 at [39];
(c) the first plaintiff was experiencing “temporary finance problems in China”: Richmond – 5.12.07 at [39];
(d) the second plaintiff had asked Sandy Lai to find a temporary partner: Richmond - 5.12.07 at [39]; and
(e) in mid July 2006, the second plaintiff wanted to sell the project: Richmond - 5.12.07 at [46].
3 There used to be a large volume of law relating to the circumstances in which admissions bypass the hearsay rule. That body of law has become totally otiose in civil proceedings in England by reason of the abolition of the hearsay rule in civil proceedings: see Bowstead & Reynolds on Agency (17th ed, 2001) [8-204] n 59.
4 The same body of law has not become totally irrelevant in New South Wales, but it has lost a great deal of its relevance by the fact that this subject matter, as so many other evidentiary subject matters, is dealt with in the Evidence Act 1995 (“the EA”) and it is to the terms of the EA, particularly s 87, rather than any historical material, that one now turns to determine these questions.
5 Section 87 of the EA provides as follows
(1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that:“ Admissions made with authority
- (a) when the representation was made, the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made, or
(b) when the representation was made, the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person’s employment or authority, or
(c) the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party.
(2) For the purposes of this section, the hearsay rule does not apply to a previous representation made by a person that tends to prove:
- (a) that the person had authority to make statements on behalf of another person in relation to a matter, or
(b) that the person was an employee of another person or had authority otherwise to act for another person, or
(c) the scope of the person’s employment or authority.”
6 Also relevant to the application before me is s 135 of the EA, because I am asked, on behalf of the plaintiffs in 5533/06 (“the plaintiffs”), if I rule the material admissible, to exclude it from evidence under that section. Section 135 provides as follows:
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:“ General discretion to exclude evidence
(a) be unfairly prejudicial to a party, or
(b) be misleading or confusing, or
(c) cause or result in undue waste of time.”
7 A compendious and useful summary of the present law is contained in the judgment of McDougall J in Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Ltd [No 4] [2006] NSWSC 90. In that judgment the admissibility of certain statements was pressed under s 15 of the Partnership Act 1890 and also under s 87 of the EA.
His Honour said:
“10 By contrast, I think, s 87 of the Evidence Act focuses simply on the time when the ‘previous representation’ was made and on the authority of the person at that time either to make statements or (para (b)) otherwise to act in connection with the subject matter of the previous representation.
11 Further, the purpose of s 87 is that set out in the initial words of subs (1): to enable the Court to determine ‘whether a previous representation made by a person is also taken to be an admission by a party’. Paragraphs (a) to (c) of subs (1) set out three alternative bases upon which the representation ‘is’ to be admitted. They do not require a concluded finding of the relevant authority or common purpose. They merely require a conclusion that such a finding be one that ‘is reasonably open’.
……
18 Equally, I think, it follows on the same basis that at the time of the s 597 examinations, Mr Peck had authority to act for Phillips Fox and the representations contained in the s 597 transcripts are, or it is reasonably open to find that they are, representations relating to matters within the scope of his authority as a partner.
20 Thus, I think, the legislation is looking at the general authority of the person whose previous representation is sought to be tendered to make statements of the kind embodied in the particular representation, and not at the authority to make the particular representation (including in the circumstances in which it was made and having regard to the means by which it was made).”19 In this context, as I have said, I regard paras (a) and (b) of s 87(1) as focusing on the time at which the relevant representation is made, not (as might be the case under s 15) on the means by which it is made (or, in this case, obtained or extracted). I think that this is deliberate. What the legislation requires is that the court consider, at the time that the relevant representation was made, the authority of the person making it. But it is apparent that the authority to be considered is not authority to make the particular representation but authority ‘to make statements ... in relation to the matter with respect to which the representation was made’ (para (a)) or ‘authority otherwise to act for the party’ in relation to that matter.
His Honour also, at [28], rejected an argument that the wording of s 87 led to the exclusion of the application of the discretion to exclude in s 135.
8 The plaintiffs oppose the admission of the evidence on a number of grounds. They say that the words objected to could not be construed as admissions. They say that the powers of attorney given by Lym International and by Ms Yang to Sandy Lai were not apt to authorise the making of the statements on the plaintiffs’ behalf. In support of their application under s 135 of the EA, they submit that the unavailability of Ms Lai to be cross examined on this material renders it unfair within s 135 that the evidence should be admitted.
9 I do not agree with the proposition that any of the statements could not be characterised as an admission. As I understand the evidence to date, there are propositions put by or on behalf of Ms Yang that are contrary to her stated views or positions as conveyed in Ms Lai’s evidence. It seems to me that the words proffered could operate as admissions.
10 I am far from certain that the powers of attorney, despite their width, convey authority to make admissions. However, there is material in evidence, which is adverted to in the written submissions that have been laid before me, that certainly could lead to the conclusion that Ms Lai, at the relevant times, was in effect the general manager of the corporate plaintiff, Lym International, and also was appointed to the general management of Ms Yang’s affairs with relation to the company and its property affairs.
11 I bear in mind the words in the opening portion of s 87, as emphasised by McDougall J in his judgment, that the necessary basis to admit alleged admissions into evidence is that “it is reasonably open” to make findings of authority. Certainly, on the material that is available, I am of the view that it is reasonably open to find, within s 87(1)(b) of the EA, that Ms Lai had authority otherwise to act for the plaintiffs and that the representations related to matters within the scope of her authority.
12 In those circumstances, in my view, the material proffered as admissions is be admissible.
13 So far as the question of discretion is concerned, the relevance of lack of the opportunity to cross examine has been dealt with in the Court of Criminal Appeal. In R v Suteski (2002) 56 NSWLR 182; 137 A Crim R 371; [2002] NSWCCA 509 at [126], [127], Wood CJ at CL said:
[127] The decisions mentioned clearly depend upon their particular facts, that is, upon the character of the evidence involved and upon the nature or strength of the potential prejudice to the defendant. Each case, in my view, needs to be examined individually by reference to the well understood balancing exercise.”“[126] For the reasons earlier identified, I see no reason why the inability of the appellant to cross-examine Sakisi should not have been relevant for s 135 and s 137 of the Evidence Act. However, the bare fact that a defendant cannot cross-examine a witness is not necessarily decisive of the issue which arises in relation to these provisions. See Ordukaya v Hicks [2000] NSWCA 180, Bakerland Pty Ltd v Coleridge [2002] NSWCA 30, and in particular the decision of Heydon JA in R v Clark [2001] NSWCCA 494 at [164].
Those propositions have been subsequently endorsed in the same Court in Galvin v the Queen [2006] NSWCCA 66 at [40].
14 The situation thus is that, as was said in Ordukaya v Hicks [2000] NSWCA 180 at [35] - [40], the inability to cross examine is not, of itself, unfairly prejudicial. What was said in Ordukaya is, I respectfully observe, self evidently right, since an automatic exclusion of evidence, where cross examination was precluded, would lead to the wholesale evasion of the exception intended to be created by the EA to the hearsay rule. However, it has been made plain in the subsequent authorities that the inability to cross examine is a material factor to be taken into account in the exercise of the discretion.
15 It is mostly upon the lack of ability to cross examine that the plaintiffs rely for the exercise of the discretion. There is no doubt that Sandy Lai is unavailable. But I am not prepared, in this case, to exercise the discretion on that basis or at all in favour of the exclusion of the evidence.
16 The lack of cross examination and the indirectness of the evidence will, of course, be taken into account in assessing its weight.
17 The portions objected to in pars 33, 36, 39 and 46 of Mr Richmond’s affidavit are admitted.
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