Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 35)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

No. 4788 of 2009

CAROL ANN MATTHEWS	Plaintiff
V
SPI ELECTRICITY PTY LTD (ACN 064 651 118) & ORS (According to the attached schedule)	Defendants

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JUDGE:	J FORREST J
WHERE HELD: DATE OF HEARING:	Melbourne 19-20 and 24 February 2014
DATE OF RULING:	27 February 2014 (revised 3 March 2014)
CASE MAY BE CITED AS:	Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 35)
MEDIA NEUTRAL CITATION:	[2014] VSC 59

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EVIDENCE – Admissibility – Tender of documents produced in response to subpoena – Relevance – Authenticity of a document – Hearsay exception – Whether business records – Discretionary exclusion rule – Whether unfair prejudice substantially outweighs probative value - Evidence Act 2008 (Vic) ss 48(1)(e), 55, 56, 58, 59, 69, 135.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Richter QC with Mr T Tobin SC Mr A J Keogh SC Mr L W L Armstrong & Ms M Szydzik	Maurice Blackburn
For SPI Electricity Pty Ltd	Mr J Beach QC with Mr P H Solomon SC Mr B Quinn SC Mr D Farrands Mr C Parkinson Mr J Kirkwood & Mr L Stanistreet	Herbert Freehills Smith
For USC	Mr R Ray QC with Ms E Brimer	Holman Fenwick Willan
For the State parties	Mr C M Caleo SC with Mr P E Anastassiou SC Ms W A Harris SC Mr S A O’Meara SC Mr P Zappia Ms A L Robertson Dr M D Rush Mr N McAteer Mr A D Pound Ms J Firkin Mr J M Brereton Mr L T Brown Ms J F Swanwick & Mr J W Heeley	Norton Rose Fullbright Australia

HIS HONOUR:

Introduction

Can SPI tender documents produced by other electricity distribution companies as part of its case in defending allegations of breach of duty made by Mrs Matthews? SPI does not propose to call the authors of the documents or, alternatively, a representative of the particular company familiar with the company’s protocols and practices.
At the request of SPI, the Prothonotary issued subpoenas to three electricity distribution companies operating in Australia (other than SPI). A number of documents have now been produced by these companies in response to the subpoenas. SPI, relying on the business records provisions in s 69 of the Evidence Act 2008 (Vic),[1] applies to tender those documents which it says are probative of electricity distribution industry practice relevant to the fitting of dampers[2] and the suppression of oil circuit reclosers.[3]
[1] ‘Evidence Act’.
[2] ‘dampers’. Spiral vibration dampers are fitted to conductors to alleviate the effects of vibration (specifically, what has been referred to in this case as ‘vortex-induced Aeolian vibration’.
[3] ‘OCRs’. OCRs are a type of fault protection device. An OCR was fitted at pole 28 on the Pentadeen Spur as at Black Saturday.
Mrs Matthews objects to the tender. The nub of her objection can be stated succinctly: the documents have not been proved to be authentic and therefore do not fall within the business records exception to hearsay under s 69(1) of the Evidence Act and, as such, are inadmissible. If potentially admissible, Mrs Matthews contends the documents should be excluded pursuant to s 135 of the Evidence Act on the grounds that their probative value is outweighed by the danger that the evidence is unfairly prejudicial and/or misleading and confusing.

Background

Prior to closing its case SPI reserved its position in relation to adducing evidence from other electricity distribution companies as to the practice of fitting dampers and the suppression of OCRs in high bushfire risk areas prior to Black Saturday.
On 19 November 2013, the Prothonotary, at the request of SPI, issued subpoenas to three electricity distribution companies: Energex Ltd,[4] Powercor Australia Ltd[5] and Aurora Energy.[6] The subpoenas sought production of documents which record the policies or practices of the companies in relation to the suppression of OCRs on SWER lines in high bushfire risk areas or the retrofitting of dampers to steel conductors on distribution networks as at Black Saturday.
[4] ‘Energex’.
[5] ‘Powercor’.
[6] ‘Aurora’.
The companies lodged documents and accompanying letters with the Prothonotary in January 2014. These have been inspected by the parties, or at least the lawyers for SPI and Mrs Matthews.
SPI has not called viva voce evidence from employees or officers of the three electricity distribution companies.
SPI seeks to tender only some of the documents obtained under subpoena from the three electricity distribution companies.
In the course of the trial, SPI and Mrs Matthews issued subpoenas to other electricity distribution companies as follows:
(a) at Mrs Matthews’ request, subpoenas were issued to Ergon and SA Power Networks; and
(b) at SPI’s request, subpoenas were issued to Ausgrid, Electricity Networks Corporation (Western Power) and Endeavour Energy.
Documents were produced in answer to the subpoenas by each of the organisations (SPI does not seek to tender these documents).
There are at least two pieces of evidence dealing with industry practice in relation to the suppression of OCR reclose functions that have already been adduced:
(a) a document prepared by SPI in October 2009, entitled ‘Extreme Weather Event Response Project – Recommendations’, describes the results of a questionnaire answered by a number of electricity distributors and tendered by Mrs Matthews. It purports to examine the options that SPI could adopt to minimise the potential impacts of extreme weather events;[7] and
(b) the evidence contained in Professor Baitch’s expert report[8] concerning the practices of electricity distribution companies in New South Wales and South Australia.
There was, in the course of argument, reference to the report of Professor Russell (an expert electrical engineer based in Texas engaged by SPI) however this report does not disclose any specific reference to the practice of other electricity distribution companies either in Australia or in his home country, the United States.
[7] SPN.650.217.0013.
[8] EXP.CAM.006.0001.

The documents

The documents SPI seeks to tender (set out in further detail in Annexure A to this ruling) can be divided into three categories:
(a) the subpoenas issued to the electricity distribution companies with attached declarations (class 1);
(b) letters from officers of the electricity distribution companies to SPI’s solicitors or to the Prothonotary (class 2); and
(c) documents (apparently generated pre- and post-Black Saturday) produced by each of the electricity distribution companies to the Prothonotary in response to the subpoenas (class 3). These are set out in detail at [20].

Relevant provisions of the Evidence Act

The substantive dispute surrounds the class 3 documents.[9] In order for SPI to succeed in tendering documents that fall within class 3, it must first demonstrate that the representations within each document are relevant to the issues in this case, as required by ss 55 and 56 of the Evidence Act. The Court is able to draw inferences as to relevance, including that of authenticity, from an inspection of the relevant document as provided by s 58 of the Evidence Act. The relevant provisions of the Evidence Act are:
55. Relevant evidence
(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
(b) the admissibility of other evidence; or
(c) a failure to adduce evidence.
[9] I have in the course of this ruling referred to the tender of a document or documents. In truth the tender is only of the representations contained within the documents relevant to the issues in this case. My references to the tender of documents should be read in that light.
56. Relevant evidence to be admissible
(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.
58. Inferences as to relevance
(1) If a question arises as to the relevance of a document or thing, the court may examine it and may draw any reasonable inference from it, including an inference as to its authenticity or identity.
(2) Subsection (1) does not limit the matters from which inferences may properly be drawn.
Second, SPI must establish that the document is admissible. It is accepted by SPI that the contents of each of the documents are, prima facie, hearsay. By s 59 of the Evidence Act hearsay evidence is not admissible:
59. The hearsay rule—exclusion of hearsay evidence
(1) Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation.
There are, of course, a number of exceptions to the hearsay rule. Of these exceptions, SPI relies upon the exception for ‘business records’ under s 69(1) of the Evidence Act:
69. Exception – business records
(1) This section applies to a document that—
(a) either—
(i) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or
(ii) at any time was or formed part of such a record; and
(b) contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business.
In order for the exception to apply the document must satisfy s 69(2)(a) or (b), which provide:
(2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was 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 personal knowledge of the asserted fact.
Section 48(1)(e) of the Evidence Act is facilitative. It deals with the manner in which a party can adduce the contents of a document which is kept as a business record, by merely the tender of the document itself:
48. Proof of contents of documents
(1) A party may adduce evidence of the contents of a document in question by tendering the document in question or by any one or more of the following methods—
…
(e) tendering a document that—
(i) forms part of the records of or kept by a business (whether or not the business is still in existence); and
….
(2) Subsection (1) applies to a document in question whether the document in question is available to the party or not.
…
(4) A party may adduce evidence of the contents of a document in question that is not available to the party, or the existence and contents of which are not in issue in the proceeding, by—
(a) tendering a document that is a copy of, or an extract from or summary of, the document in question; or
(b) adducing from a witness evidence of the contents of the document in question.
Finally, assuming the relevance and hearsay hurdles are cleared, a court may be asked by a party to exercise its discretion pursuant to s 135 of the Evidence Act to exclude the evidence:
135. General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might –
(a)be unfairly prejudicial to a party; or
(b)be misleading or confusing; or
(c)cause or result in undue waste of time.

Tender of the Class 3 documents

The critical documents

As I noted above, the substantive dispute surrounds the class 3 documents. The documents in classes 1 and 2 (the subpoenas, letters and declarations) are not of critical importance. As I follow it, the purpose of their tender is to produce a forensic chain of evidence to underpin a submission that the class 3 documents are relevant to the maintenance and protection practices (e.g. fitting of dampers or suppression of OCRs) by the companies as at Black Saturday – therefore supporting an argument that SPI was, in not suppressing the OCR of the Pentadeen Spur and not fitting dampers to the Valley Span, complying with industry practice in this country.
Counsel for Mrs Matthews did not object to the tender of the subpoenas (i.e. class 1 documents) save that he says they have no relevance to any issue in the proceeding, unless the other materials are admissible. Similarly, it was accepted by SPI that if the tender of the documents in class 3 is refused then the proposed tender of the subpoenas and correspondence is futile.
The class 3 documents comprise the following:
Documents apparently in existence prior to Black Saturday
(a)   The Powercor Asset Network Maintenance Policy for Bare Conductors (Victoria), dated 5 March 2004. This document sets out the management and maintenance regime for bare conductors on Powercor’s distribution network.
(b) Powercor Technical Standards (Victoria) EF031, EF401, EF431, EF481, EF486A, EF501, EF546, EF551, EF556, EF561 and EF566. These standards, which are contained in the Powercor Asset Network Maintenance Policy for Bare Conductors (Victoria) document, set out the technical prescriptions for various pieces of electricity distribution equipment, including armour rods, vibration dampers and helical terminations constructed.
(c)   The Aurora Distribution Overhead Line Design Reference Manual, dated 11 August 2005. This document provides technical specifications and guidance for those involved with the design of overhead lines in the Aurora distribution area.
Documents which came into existence post-Black Saturday
(d) Energex Bushfire Risk Management Plan 2012-13. This document sets out Energex’s asset management strategies that are directed towards minimising the risk of bushfire and associated risks to its assets and customer supply reliability during bushfire seasons. The document is said to cover areas such as: identifying and recording high bushfire risk areas on the Energex network; outlining equipment and construction standards relevant to bushfire mitigation; and, operating procedures during times of high fire danger and total fire ban days.   The document appears to have been produced in order to comply with the Queensland Industry Code governing Energex’s distribution activities.
(e)   Powerpoint presentation slides apparently prepared on 9 November 2010 by Aurora for the Tasmanian Government, concerning the Victorian Bushfires Royal Commission’s recommendations for electricity-caused fires. These slides include a comparison between Powercor and SP Ausnet’s distribution network, and Aurora’s comments on certain recommendations as viewed in the Tasmanian context.
(f)    An email from John Spence (position unknown) to Adrian Tanner (position unknown) of Aurora, dated 22 November 2013, stating ‘Planning Manual and Nu4 do not make reference to line dampers’ and attaching a one page undated extract titled ‘Specification: Distribution Overhead Powerline Design and Construction.’ This extract sets out an aspect of Aurora’s requirements for conductors and cables, including defining substandard and suspect conductors.

Are the documents probative?

In the course of argument, counsel for SPI identified the representations contained in the three companies’ documents that were said to be relevant to the issues in this proceeding. Each, arguably, went to the practice of the particular company in relation to suppression of OCRs and the fitting of dampers.
Industry practice is a relevant consideration in determining the adequacy or otherwise of a defendant’s response to a foreseeable ‘not insignificant’ risk, as set out in s 48(1) of the Wrongs Act 1958 (Vic).[10] Indeed, evidence of a particular practice may work both ways: on the one hand, a failure by a defendant to adhere to an industry practice may be indicative of an unreasonable response to a foreseeable risk; on the other, compliance with industry practice may enable a conclusion that a defendant has responded reasonably to that risk. It is clear however, that in neither case is industry practice determinative of what constitutes a reasonable response to the risk.
[10] See Lindsay v Three Chimneys Farm Pty Ltd [2010] VSC 436, [73] in the context of an industrial accident personal injury proceeding.
The representations contained in the pre-2009 documents record practices prior to Black Saturday. The representations contained in post-2009 documents enable inferences to be drawn as to the relevant company’s practices after Black Saturday.
I did not understand counsel for Mrs Matthews to contend that the parts of the documents I referred to at [20(a)-(e)] dealing with the suppression of OCRs or the fitting of dampers were not probative of the issues in this case and thus satisfying the s 55 test of relevance.
I doubt whether the email and one page attachment produced by Aurora (which I referred to at [20(f)]) could be said to be relevant. Even when the attachment is read with the email, it is particularly difficult to identify the date that the one page document came into existence or the meaning of it. At best, both documents taken together refer to Aurora’s policy in relation to the fitting of dampers in 2012/2013. This is irrelevant to the issues in this case. I would exclude these two documents on the basis of lack of relevance.[11]

Authenticity of the documents

[11] As subsequently described these documents do not overcome any of the other tests of admissibility.

SPI wants to tender the documents as business records of the three electricity distribution companies and use it as evidence of their policies and practices pre-Black Saturday. It is therefore necessary for SPI to establish that the documents are indeed authentic or genuine records of those companies. The debate on this point is what is necessary to establish authenticity so that the documents can be said to fall within the scope of s 69 of the Evidence Act.
Given the terms of s 48 of the Evidence Act, there has been a surprising debate as to the need to prove the authenticity of a document when its contents, upon inspection, make it probable that the document is an authentic business record of the organisation producing it. I do not propose to enter into the fray. It is sufficient to say that I accept the following propositions of Perram J in Australian Competition & Consumer Commission v Air New Zealand Ltd[No 1][12] to the following effect:
1. There is no provision of the Act which requires that only authentic documents be admitted into evidence. The requirement for admissibility under the Act is that evidence be relevant, not that it be authentic. On some occasions, the fact that a document is not authentic will be what makes it relevant, ie, in a forgery prosecution. In other cases, there may be a debate as to whether a particular document is or is not authentic, for example, a contested grant of probate where it is said that the testator’s signature is not genuine.
…
14. In deciding relevance (ie whether the tribunal of fact could reasonably infer that the document (otherwise relevant) was authentic), the tribunal of law is explicitly authorised by s 58(1) to ask what inferences as to authenticity are available from the document itself. That is what s 58(1) says.
It will follow that AirNZ’s submission that “no inference as to authenticity can be drawn from the face of these documents” ought to be rejected. In determining a relevance objection, that is precisely what s 58(1) permits.[13]
[12] [2012] FCA 1355 (‘Air New Zealand’).
[13] [2012] FCA 1355, [92]-[93].
In ASIC v Rich[14] Austin J (following an earlier decision of National Australia Bank Ltd v Rusu & Ors[15]) took a different position in not requiring evidence from the creator of a document to prove its authenticity, but requiring something in addition to the mere tender of the document itself to establish its provenance:
Although a simple way of authenticating a document is by evidence from its creator, or someone who superintends the maintenance of business records that include it, Rusu does not lay down that authentication by such means is necessary. On the other hand, Rusu establishes that there must be something more than the mere tender of the document itself, where the tender is contested. Thus, in the present case ASIC would not, apart from the effect of s 135(2), be able to tender the Carter exhibits or its merged tender bundle without any evidentiary support whatever. But ASIC does not purport to do so. It has provided an enormous quantity of provenance evidence, designed to trace the tendered documents back to a source such as the Ferriers I:/drive or documents acquired from liquidators or solicitors. [16]
[14] (2005) 216 ALR 320 (‘Rich’).
[15] [1999] 47 NSWLR 309.
[16] (2005) 216 ALR 320, [119].

Counsel for Mrs Matthews contended that for SPI to establish that the documents were authentic, notwithstanding their obvious provenance, the documents needed to be shown to have been authorised by an officer or employee of the company providing the records. In his submissions, counsel referred to Rich;[17] ‘authenticity cannot be achieved solely by drawing inferences from the face of the document where there is no other evidence to indicate provenance.’[18] Counsel asserted that there is no evidence in the present case showing:
(a) the file source of the documents;
(b) their status within the subpoenaed organisations;
(c) whether they were the only iterations of the document; or
(d) whether they were accurately extracted.[19]
[17](2005) 216 ALR 320.
[18] (2005) 216 ALR 320, [117] (emphasis in original).
[19] Submissions for Mrs Matthews dated 15 February 2014, [19].
I reject this submission. In my opinion neither the decision in Rich nor Air New Zealand require such rigorous proof. I accept that in this case, where the documents are tendered as emanating from the business records of an organisation, it is necessary to establish that the documents are authentic or genuine records of that organisation to trigger the exception to the hearsay rule set out in s 69 of the Evidence Act.
As will be seen in a moment, this is a case in which a document – on its face – can be inferred to be authentic and relevant. Section 58 does not mandate any additional requirement. In this case the additional factor (if it is necessary, which I doubt) is the terms of the subpoena addressed to each of the companies.
Consistent with the decision in Air New Zealand, a combination of s 55 and s 58 of the Evidence Act enables a court to examine the document itself and then determine whether it is authentic – absent other evidence. So for the purpose of this application it is appropriate to examine each of the documents and the surrounding circumstances of their production and draw appropriate inferences, where applicable, as to:[20]
(a)   how the document came to be adduced in evidence;
(b) whether it was a document prepared by one of the companies;
(c)   whether it was a document prepared by one of the companies for the purpose of its business;
(d) whether the contents of the document form part of the records of the business;
(e)   whether the documents contain statements relevant to the proceeding made in the course of or for the purpose of the business;
(f)    whether the representation contained in the document was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact relied upon; and
(g) whether the representation was made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.
[20]Air New Zealand [2012] FCA 1355, [92]-[93].
With two exceptions (the email and attachment) I consider Mrs Matthews’ submissions to be devoid of merit and contrary to the purpose and intent of s 58, which is to enable a common sense examination of the content of the documents to determine its authenticity. The provenance and authenticity of the class 3 documents cannot seriously be in issue:
(a)   the Energex Bushfire Risk Management Plan 2012-13 bears the Energex logo and sign and refers in detail to Energex policies throughout;
(b) the Powercor Asset Network Maintenance Policy for Bare Conductors bears the Powercor logo and ABN and refers to an issue date and document authors;
(c)   the Powercor Technical Standards bear the Powercor logo and signature of a Powercor Administrators/Tech Approvers on every page;
(d) the Powerpoint presentation slides prepared by Aurora for the Tasmanian Government contain the Aurora logo and Powerpoint style on every slide, and refer to Aurora-specific statistics throughout (such as number of Aurora’s power poles); and
(e)   the Aurora Distribution Overhead Line Design Reference Manual, whilst it does not contain any Aurora logos, refers to ‘Aurora’s distribution lines’ at various places and refers to Tasmanian distribution areas (Aurora being a Tasmanian company).
It is helpful, I think, to reproduce the covering page of one of the documents produced by Powercor which Mrs Matthews contended lacked authenticity:[21]
The date of the document is established. It identifies the administrator, the author and the document owner; and, it bears a Powercor logo on each page. Perusal of the document demonstrates it deals with the maintenance of conductors and it is littered with references to Powercor’s asset maintenance policy. The document looks like a Powercor document, it bears a Powercor logo, it details Powercor practices and it was produced by Powercor in response to a subpoena seeking its records relevant to:[22]
1. Documents recording any Powercor policy or practice as at 7 February 2009 in relation to the suppression of the reclose function on oil-operated automatic circuit reclosers on SWER lines in hazardous bushfire risk areas either:
a. During the declared fire danger period; or
b. On total fire ban days.
2. Documents recording any Powercor policy or practice as at 7 February 2009 in relation to retrofitting spiral vibration dampers on steel conductors on the Powercor distribution network.
[21]PCA.001.001.0007.
[22] Subpoena dated 19 November 2013 issued by SPI to Powercor: CRT.SPN.070.0010.
Counsel for Mrs Matthews referred to the warning at the top of the document, which states ‘Printed copies of this document not in an official manual, MAY NOT BE THE LATEST. The most up-to-date version is located on the intranet.’ This warning is irrelevant to the authenticity of the document – it simply indicates that the document may be superseded; it does not suggest that it is not an authentic Powercor document.
Unsurprisingly, I am prepared to infer on the face of this document that it is a Powercor document and emanates from the records of Powercor and was produced by it in response to a subpoena to produce documents relevant to its policy and practice. It is the very type of document that s 58 was intended to accommodate. The same analysis applies to each of the other documents in class 3 (with the exception of the email and attachment) produced by the three companies in response to subpoenas that SPI seeks to tender in generally similar terms. I should add that the email and attachment do not on their face enable any inference to be confidently drawn as to their authenticity.

Are the documents business records?

The meaning of ‘business record’

In Roach v Page (No 15)[23] the meaning of ‘records of a business’ is explained as follows:
The records of a business are the documents (or other means of holding information) by which activities of the business are recorded. Business activities so recorded will typically include business operations so recorded, internal communications, and communications between the business and third parties.[24]
[23] [2003] NSWSC 939 (20 October 2003).
[24] [2003] NSWSC 939 (20 October 2003) [5] (Sperling J).
In Lithgow v Jackson[25] the High Court held that s 69(2)(a) of the Evidence Act is not engaged where the maker of the representation lacks personal knowledge of the asserted fact:
Section 69(2)(a) cannot apply, because the makers of the representation, the ambulance officers, did not have personal knowledge of a fall of 1.5m on to concrete, and could not reasonably be supposed to have had it, since the fall had happened some time before they arrived.[26]
[25] [2011] 244 CLR 352.
[26] [2011] 244 CLR 352, 361.
In Air New Zealand Perram J stated:
The question in each case will, therefore, be twofold. First, was the representation made or recorded in the document ‘in the course of the business?’ Secondly, was it made or recorded ‘for the purpose of’ the business? The first inquiry will largely devolve to an examination of the business involved. But the second will invite consideration of the purposes of the businesses which made the representation and here it should be accepted that one business may intend its documentary output to serve a record keeping function for other businesses. Invoices and receipts will be the paradigm examples.[27]
[27] [2012] FCA 1355, 460 [50].
The class 3 documents (with the exception of the email and attachment) satisfy each of the tests postulated by Perram J. I will not repeat what I said earlier about the contents of the class 3 documents and the inferences available. Applying s 58 of the Evidence Act I conclude that the documents appear to be made or recorded in the course of business and for the purpose of the business. I did not understand counsel for Mrs Matthews to argue otherwise. I am also of the view that it can be inferred that the makers of the representations contained in the documents could be reasonably supposed to have personal knowledge of the representations in the documents relied upon by SPI. Again I did not understand counsel for Mrs Matthews to dispute this conclusion.
For the sake of completeness I should add that neither the email nor the attachment satisfy this test.

Does the probative value outweigh the danger that the evidence is unfairly prejudicial and/or misleading and confusing?

With the exception of the email and the attachment I have concluded that each of the documents is probative, authentic and satisfies the business records exception. However one, or perhaps all, may nonetheless be excluded by the application of s 135(1)(a) or (b) of the Evidence Act on the grounds that the probative value of the document is outweighed by the danger that admitting the document(s) is unfairly prejudicial and/or misleading and confusing.
Unfair Prejudice – s 135(1)(a)
Four points can be made at the outset:
(a) Mrs Matthews carries the onus of persuading me that the probative value of the representations contained in the class 3 documents is significantly outweighed by their prejudicial value;
(b) the representations relied upon in each document which are sought to be adduced need to be considered independently in determining whether their probative value is significantly outweighed by its prejudicial value;
(c) this is a trial by judge alone and any question of undue emphasis (in the sense of placing excessive importance on an improper or emotional basis) being attached to the documents can be put to one side;[28] and
(d) even if the documents are admitted, it remains open to Mrs Matthews to argue that they should be given little if any weight in the determination of the question of the exercise of reasonable care.
[28] See Australian Law Reform Commission, Evidence (Interim), Report No 26 (1984) vol 1, [644] where ‘unfair prejudice’ is explained as follows: ‘The risk of unfair prejudice is one of the potential disadvantages mentioned. By risk of unfair prejudice is meant the danger that the fact-finder may use evidence to make a decision on an improper, perhaps emotional, basis, ie on a basis logically unconnected with the issues in the case. Thus evidence that appeals to the face-finder’s sympathies, arouses a sense of horror, provokes an instinct to punish, or triggers other mainsprings of human action may cause the fact-finder to base his decisions on something other than the established propositions in the case. Similarly, on hearing the evidence the fact-finder may be satisfied with a lower degree of probability than would otherwise be required.’
Counsel for Mrs Matthews made comprehensive and helpful submissions on this point. In précis they were as follows:
(a)   SPI has been selective in its choice of documents from the subpoenaed material both in terms of the documents extracted from the three companies as well as choosing not to tender material obtained from three other electricity distribution companies.
(b) This selectivity means that there is a real risk that the Court will act on a misapprehension as to the maintenance and protection practices engaged in by three companies in the years leading up to Black Saturday. For instance, the Powercor document that I have reproduced at [34] is evidence only of the practice of Powercor in March 2004 and the warning on the cover page demonstrates the prospect of documents becoming outdated and unreliable.
(c)   Counsel for Mrs Matthews is denied the opportunity to cross-examine the person who prepared the document (or someone with knowledge of its contents) as to:
(i)     whether the document accurately records the company’s policy at any time and if so at what time;
(ii) whether the document records company policy at the relevant time and whether that policy was in fact applied in the field; and
(iii)      whether the policy or practice referred to in the document was developed by reference to adequate data or field experience and competent analysis of that data?
Counsel for SPI, in succinct and clear terms, contended as follows:
(a) Provided the documents were regarded as probative and satisfied the business records exception then any question of selectivity only goes to the weight to be attached to the particular document – not to its admissibility.
(b) If, contrary to counsel’s primary argument, it was thought that there was an element of unfairness in permitting the tender, any such unfairness could be ameliorated by permitting Mrs Matthews to adduce evidence relevant to other distribution companies’ industry practice by the tender of documents obtained from these companies.
(c) Without these documents being admitted into evidence, cross-examination of Professor Baitch would be hamstrung. Professor Baitch’s report refers to industry practices in New South Wales and South Australia. SPI, it was argued, is entitled to cross-examine Professor Baitch in relation to industry practice in other states: The Queensland (Energex) and Tasmanian (Aurora) documents are directly relevant to electrical maintenance and suppression practices in other States. If they are excluded and, during cross-examination, Professor Baitch denied knowledge of the practices, then there would be an unfairness to SPI.
For the following reasons I accept the submissions of counsel for Mrs Matthews. I consider that real prejudice to Mrs Matthews will be occasioned by the tender of the class 3 documents and that such prejudice significantly outweighs the probative value of the documents.
First, the class 3 documents produced prior to 2009 have limited probative value as to the practices and procedures of each of the companies in the years leading up to Black Saturday. That point is illuminated by the warning at the top of the Powercor document reproduced at [34]. Put simply, and as an example, the Powercor document is at best evidence of the company’s practices in 2004 – but no more. Each of the other pre-2009 documents attracts the same qualification. Whilst I accept (as counsel for SPI contended) that the subpoenas were directed towards the production of documents reflective of the companies’ practices as at Black Saturday, absent anyone being called from the these companies, I do not have any confidence as to the level of inquiry that has been made in the examination of that company’s records and the production of documents. This approach is informed by years of experience in the common law jurisdiction in which the adequacy of the response to subpoenas is a never-ending saga.
I accept that the post-Black Saturday documents have slightly greater probative value because the representations contained in those documents may enable a court to draw an inference as to a company’s practices immediately prior to Black Saturday. However, as with the pre-2009 documents, the level of inquiry made by the company to produce all relevant documents remains unknown.
Second, Mrs Matthews is unable to test a raft of factors surrounding the representations contained in the pre- and post-Black Saturday documents. It is, as the following short analysis shows, now accepted that the procedural disadvantage that arises if a party is unable to cross-examine the maker of a document (or a person with knowledge of the contents of the document) is a proper consideration in determining whether to admit a document which contains hearsay representations.
The ALRC in its Uniform Evidence Law report stated
In the Interim Report for the previous Evidence inquiry, the ALRC referred not only to unfair prejudice arising from evidence which might inflame emotions, but also to unfair prejudice resulting from mis-estimation by the fact-finder of the weight to be given to particular evidence. An inability to test the reliability of evidence may carry with it the danger of such mis-estimation. It is therefore consistent with the policy basis that the inability to test evidence may constitute a legitimate ground for its exclusion where this will affect the ability of the fact finder to assess rationally the weight of the evidence. Whether the inability to test the evidence will in fact give rise to unfair prejudice depends on a number of factors, including: the basis on which the hearsay rule did not apply; the possible significance of cross-examination, and whether there are other means of assessing the reliability of the evidence. However, the mere fact that a party is unable to test the evidence by cross-examination will not of itself constitute unfair prejudice…[29]
[29] Australian Law Reform Commission, Uniform Evidence Law, Report No 102 (2005), [16.45] (emphasis added).
In La Trobe Capital v Hay Property[30] Finkelstein J said (with Jacobson and Besanko JJ in agreement):
It is true that the meaning of the term “unfair prejudice” has been somewhat contentious. The ALRC explained the risk of unfair prejudice as being the danger that the evidence might be used in an improper, perhaps emotional, way. Clearly a risk of that kind is much greater in the context of jury trials. However, there are also numerous authorities that suggest that an unfair prejudice may arise from procedural considerations.[31]
[30] (2011) 190 FCR 299.
[31] (2011) 190 FCR 299, 313 [64] (citations omitted).
This approach is consistent with the line of authority in the New South Wales Court of Criminal Appeal. In R v Suteski[32] Wood CJ said:
I see no reason why the inability … to cross-examine … 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 Hick; Bakerland Pty Ltd v Coleridge, and in particular the decision of Heydon JA in R v Clark. 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.[33]
[32] (2002) 56 NSWLR 182.
[33] (2002) 56 NSWLR 182, [126]-[127].
This position was endorsed in Galvin v R:[34]
The fact that the defence could not cross-examine MW was an important consideration but not necessarily a decisive one. However, as was pointed out in R v Suteski, each case has to be determined on its own particular facts depending upon the probative value of the evidence and its prejudicial effect. Suteski was a very different case to the present. In the present case the fact that the defence could not cross-examine MW might have had more significance when considering some part of his evidence than it would when considering some other part of it. For example, it might be considered that it had more prejudicial impact in regards to the alleged admission rather than it did to the evidence of complaint.[35]
[34] (2006) 161 A Crim R 449.
[35] (2006) 161 A Crim R 449, [40] (Howie J with McClelland CJ at CL and Latham J agreeing).
In my opinion there is real force in the submissions made by counsel for Mrs Matthews. Mrs Matthews will suffer a significant disadvantage by being unable to challenge the proposition that a particular document accurately reflects that company’s practice in relation to OCR suppression or the retrofitting of dampers (as the case may be) at the time of its creation or subsequently. On their own, none of the documents can demonstrate:
(a)   whether the document truly records the company’s policy at the time;
(b) how the policy was devised;
(c)   over what period of time the policy was in force;
(d) whether the policy was revised, altered, or suspended subsequently and if so why;
(e)   whether the policy was applied in the field by the company’s employees; and/or
(f)    whether there was any revision of the policy before or after Black Saturday;.
Each of these matters is potentially of significant probative value to the questions of OCR reclose suppression and the fitting of dampers – as the evidence in chief and the cross-examination of a number of SPI witnesses on these issues has demonstrated.

The representations (and inferences to be drawn from them) contained in the documents that were produced post-Black Saturday by Energex and Aurora are essentially no different in terms of potential prejudice – the difficulties I have identified in [54] also affect this group of documents.
In summary, the inability to test the proposition that the representations contained in the documents truly reflect the practices of the respective companies in the years preceding Black Saturday is significantly prejudicial to Mrs Matthews. This is to be measured against the limited probative value of a snapshot in time of a particular company’s policies, not knowing whether the snapshot is truly reflective of the company’s practices. For the documents to go into evidence without Mrs Matthews having the opportunity to test the degree to which they are in fact reflective of the company’s practices at the relevant time(s) would, in my opinion, cause significant prejudice in the procedural sense.
Third, a considered decision was made, no doubt by SPI’s lawyers, to introduce this evidence by way of tender. The alternative would have been to call a witness who could have given evidence as to the documents’ authenticity, provenance and application. By not calling a representative of the relevant company with personal knowledge of these documents, SPI well knew that it ran the risk of the documents not being admitted. In my opinion, it is somewhat specious to now contend that the Court may be faced with only a selected portion of the evidence when Professor Baitch gives evidence. This trial has been underway for nearly a year – it was a simple task to call an appropriate representative from each of the companies. That course – a standard procedure in litigation – was not adopted.
I should add that Professor Baitch’s evidence as to industry practice will also have to withstand the type of scrutiny to which the class 3 documents have been subjected. This part of his expert evidence statement goes to questions of fact and the same considerations (e.g. exceptions to the hearsay rule and s 135 discretion) are relevant to this aspect of his report.
Fourth and finally, I do not accept that the ‘solution’ adverted to by counsel for SPI in permitting Mrs Matthews to tender any contradicting evidence from other electricity distribution companies is an appropriate remedy. The simple tender of documents, without any context, will not adequately ameliorate the prejudice to Mrs Matthews at this stage of the trial.
Misleading or confusing s 135(1)(b)
If this case was before a jury, there is a real possibility that potentially misleading inferences would be drawn from the documents. However, in a case before a Judge alone the risk that the documents be misleading is, hopefully, minimal. In Re GHI (A protected person)[36] Campbell J said:
There is something bizarre in submitting to a judge sitting alone that he or she should reject evidence on the ground that it might mislead or confuse him or her. I propose to trust myself, so far as that is concerned.[37]

Summary of conclusions

[36] [2005] NSWSC 466 (11 May 2005).

[37] Re GHI(A protected person) [2005] NSWSC 466 (11 May 2005), [8].

I summarize my analysis as follows.
Probative Value
Of the class 3 documents, the email and attachment are not relevant and are inadmissible. The representations contained in the pre-2009 documents are relevant to the companies’ practices prior to Black Saturday as are the representations contained in the post-2009 documents.
Document authenticity
The class 3 documents (with the exception of the email and attachment) are authentic and genuine records of the companies.
Business record within s 69 of the Evidence Act
Other than the email and attachment, I am satisfied that the remaining class 3 documents satisfy the business records exception to the hearsay rule.
Prejudice outweighs probative value
The prejudice occasioned by Mrs Matthews’ inability to test whether the representations contained in the class 3 documents are truly reflective of the companies’ practices in the years preceding Black Saturday significantly outweighs the probative value of the representations. I am not convinced that this prejudice can be satisfactorily ameliorated by any solution proposed by SPI. The probative value of the documents is significantly outweighed by the unfair prejudice likely to be caused to Mrs Matthews and therefore the documents should be excluded under s 135(a) of the Evidence Act.

CERTIFICATE

I certify that this and the 28 preceding pages are a true copy of the reasons for Ruling of the Honourable Justice J Forrest of the Supreme Court of Victoria delivered on 27 February 2014.
DATED this third day of March 2014.

Associate

SCHEDULE OF PARTIES

BETWEEN
carol ann matthews Plaintiff
and

spi electricity pty ltd (ACN 064 651 118)  First Defendant
Utility services corporation limited
(ACN 060 674 580)  Second Defendant
SEcretary to the DEPARTMENT
OF ENVIRONMENT AND PRIMARY INDUSTRIES  Third Defendant
COUNTRY FIRE AUTHORITY  Fourth Defendant
state of victoria  Fifth Defendant
and
spi electricity pty ltd (ACN 064 651 118)  Plaintiff by Counterclaim
and
Utility services corporation limited
(ACN 060 674 580)  First defendant to Counterclaim
SEcretary to the DEPARTMENT
OF ENVIRONMENT AND PRIMARY INDUSTRIES        Second Defendant to Counterclaim
COUNTRY FIRE AUTHORITY  Third Defendant to Counterclaim
state of victoria  Fourth Defendant to Counterclaim

carol ann matthews Fifth Defendant to Counterclaim

ANNEXURE A

Description of documents SPI wishes to tender

The subpoenas (class 1)

Three subpoenas were issued by SPI, on 19 November 2013, to Energex Ltd, Powercor Australia Ltd and Aurora Energy respectively:
(a) The subpoena issued to Energex sought a copy of the Energex Bushfire Risk Management Plan 2012-13, along with documents recording any Energex policies or practices as at 7 February 2009 in relation to retro-fitting dampers on steel conductors on the Energex distribution network.
(b) The subpoena issued to Powercor sought copies of documents relating to any Powercor policy or practice as at 7 February 2009 in relation to the suppression of the reclose function on OCRs on SWER lines in hazardous bushfire risk areas, along with documents recording any Powercor policies or practices as at 7 February 2009 in relation to retro-fitting dampers on steel conductors on the Powercor distribution network.
(c) The subpoena issued to Aurora Energy sought copies of documents recording any Aurora policies or practices as at 7 February 2009 in relation to retro-fitting dampers on steel conductors on the Aurora distribution network.

The letters (class 2)

The second category of documents SPI seeks to tender is the letters from officers of each of Energex, Powercor and Aurora to SPI’s solicitors or to the Prothonotary. These documents are briefly described as follows:
(a)   A letter dated 27 November 2013 from Energex to SPI’s solicitors. The letter informed SPI that Energex would produce to the Prothonotary a copy of its Bushfire Risk Management Plan 2012-13 and would advise the Prothonotary that it did not have any document recording Energex policy or practice as at 7 February 2009 in relation to retro-fitting dampers on steel conductors on the Energex distribution network.
(b) A declaration from an Energex officer to the Prothonotary, dated 27 November 2013, acknowledging that the court may destroy all copies of the subpoenaed documents without notice to Energex.
(c)   A letter, dated 28 November 2013, from Energex to the Prothonotary in answer to the subpoena, reflecting the 27 November letter to SPI’s solicitors at (a) above.
(d) A letter, dated 2 December 2013, from Powercor to the Prothonotary, enclosing documents provided in answer to the subpoena.
(e)   A declaration from a Powercor officer to the Prothonotary, dated 2 December 2013, acknowledging that the court may destroy all copies of the subpoenaed documents without notice to Energex.

The electricity distribution company documents (class 3)

The last category of documents SPI seeks to tender are documents produced by each of the electricity distribution companies to the Prothonotary in response to the subpoenas described above.
The documents produced comprise:
(a)   The Energex Bushfire Risk Management Plan 2012-13. This document sets out Energex’s asset management strategies directed towards minimising the risk of bushfire and associated risks to its assets and customer supply reliability during bushfire seasons. The document is said to cover areas such as identifying and recording high bushfire risk areas on the Energex network, outlining equipment and construction standards relevant to bushfire mitigation and operating procedures during times of high fire danger and total fire ban days.   The document appears to have been produced in order to comply with the Queensland Industry Code governing Energex’s distribution activities.
(b) The Powercor Asset Maintenance Policy for Bare Conductors. This document sets out the management and maintenance regime for bare conductors on Powercor’s distribution network.
(c)   Powercor Technical Standards EF031, EF401, EF431, EF481, EF486A, EF501, EF546, EF551, EF556, EF561 and EF566. These standards set out the technical prescriptions for various pieces of electricity distribution equipment, including armour rods, vibration dampers and helical terminations constructed of various metals.
(d) Powerpoint presentation slides prepared by Aurora Energy for the Tasmanian Government, concerning the Victorian Bushfires Royal Commission’s recommendations for electricity-caused fires. These slides include a comparison between Powercor and SP Ausnet’s distribution network, and Aurora’s comments on certain recommendations, as viewed in the Tasmanian context.
(e)   The Aurora Distribution Overhead Line Design Reference Manual. This document provides technical specifications and guidance for those involved with the design of overhead lines in the Aurora distribution area.

An email from John Spence (position unknown) to Adrian Tanner (position unknown), of Aurora, dated 22 November 2013, stating ‘Planning Manual and Nu4 do not make reference to line dampers’ and attaching a one page extract of Aurora’s ‘Work Specification: Distribution Overhead Powerline Design and Construction.’ This extract sets out Aurora’s particular requirements for conductors and cables, including defining substandard and suspect conductors.

[2014] VSC 59

27 February 2014 (revised 3 March 2014)