Matthews v SPI Electricity (Ruling No 21)

[2013] VSC 219

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) AND ORS	Defendants

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JUDGE:	J FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 April 2013
DATE OF RULING:	3 May 2013
CASE MAY BE CITED AS:	Matthews v SPI Electricity & Ors (Ruling No 21)
MEDIUM NEUTRAL CITATION:	[2013] VSC 219

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EVIDENCE – Admissibility – Court’s discretion to exclude evidence – Whether danger of undue waste of time outweighs probative value - Evidence Act 2008 (Vic), ss 55, 135(c).

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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 the First Defendant	Mr J BR Beach QC with Mr P H Solomon SC Mr B F Quinn SC Mr D J Farrands Mr C O Parkinson & Mr J H Kirkwood	Herbert Freehills Smith
For the Second Defendant	Mr R Ray QC with Ms E M Brimer	Holman Fenwick Willan
For the Third, Fourth and Fifth Defendants	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	Norton Rose

HIS HONOUR:

Introduction

1. Counsel for Mrs Matthews seeks to tender 18 audit reports[1] of 11 inspectors employed by USC, the asset inspection company charged with the responsibility of inspecting the Pentadeen Spur SWER line on behalf of SPI.

   [1](“the reports”).

1. The 11 inspectors were the subject of external audits carried out in 2006 and 2007 by Distribution Auditing Services Pty Ltd,[2] reports of which were submitted to SPI and USC. 

   [2](“DAS”)

1. None of these reports relate to inspections on the Pentadeen Spur.  Not one of the eleven inspectors named have worked on a SWER line emanating from the Kilmore East substation. 

1. The tender of these documents was opposed by counsel for SPI and USC on the basis that they are not probative to a fact in issue in this case. Alternatively, they contend that if the reports are probative I should exercise my discretion to refuse their tender pursuant to s 135(c) of the Evidence Act 2008 (Vic)[3] on the basis that the potential cost and delay to the trial is of such significance that it squarely outweighs the probative value of the reports.

   [3](“Evidence Act”).

1. In my view, for reasons I shall now explain, the arguments of SPI and USC in relation to the application of s 135(c) should be accepted.

The reports

1. It suffices to take one example, that of Mr AR, an asset inspector employed by USC who inspected SPI infrastructure.[4]

   [4]SPN.150.595.0083.

1. Mr AR was required, amongst many other things, to correctly identify service line maintenance issues, including items which would require urgent attention or follow-up action in order to prevent future faults.  This involved conducting pole-top inspections from the ground level and producing a condition assessment of all attached hardware and conductors at each pole/site.[5]  Inspectors were then required to collect information electronically via their hand-held PDE (portable data entry) device – in particular, they were to record all defects using appropriate specified failure codes and priority.[6]

   SPN.001.001.0002 - Contract No: D-MSP-00117, Asset Inspection Services, Contract Agreement and Terms and Conditions, Schedule 2 – Scope of works, pg 31.

   [6]SPN.001.001.0002 - Contract No: D-MSP-00117, Asset Inspection Services, Contract Agreement and Terms and Conditions, Schedule 2 – Scope of works, pg 34.

1. The DAS audit report of Mr AR, dated February 2006, summarises the results of previous audits carried out in August 2004 and 2005.  It mentions problems with Mr AR’s identification of “service line maintenance issues” and other line maintenance issues.[7]  The report also contains details and a summary of an audit conducted in February 2006 of Mr AR’s inspection of poles and lines in rural Victoria – mainly in Northern Victoria.  Most were private service lines. Some may have been high voltage lines, but none involved the Pentadeen Spur or SWER lines.  The report covers a number of topics such as –

   [7]SPN.150.595.0086

(a)plant number;

(b)pole type;

(c)asset records (which includes plant description correct, Q4 number correct / fitted, pole disc information correct, inspection tag dated / fitted, all plant items noted X-arms, all stock items noted SD & fuse etc, below ground external inspection, staking information, condemned pole marked in records, private line details recorded, private line details recorded and for records data);

(d)inspection procedure (which includes excavation and backfill done, sounding test, recent inspection hole located, wood preservative – internal, wood preservative – external, private lines inspected);

(e)quality inspection (which includes below ground external inspection, termites located, pole top maintenance identified, agree with amount of sound wood, internal inspection and hole score, agree with pole condition (S, LL or US));

(f)       score for quality of procedure; and

(g)overall assessment score.[8]

Whilst it is apparent that some of the tasks audited relate to pole top assets it is equally clear that a large number relate to items totally unconnected with this case. 

[8]SPN.150.595.0090.

Analysis

1. Section 55 of the Evidence Act, as I said in Ruling No 18, ”sets an undemanding definition of relevance.” [9]

   [9]Matthews v SPI Electricity (Ruling No.18) [2013] VSC 185 [16], quoting Jill Anderson, Neil Williams SC and Louise Clegg, The New Law of Evidence (LexisNexis Butterworths Australia, 2^nd ed, 2009) 163.

1. On their face, the reports have no probative value in relation to the inspections carried out by USC personnel on the Pentadeen Spur.  However, Mrs Matthews seeks to rely upon the individual audits to substantiate an argument that there was a systemic problem with USC training of its inspectors in reporting deficiencies in pole top assets.  This, it is said, should have been detected by SPI and USC and remedied by re-training or improved training methods.

1. I am satisfied that such a proposition can, at least arguably, be maintained and that the reports are admissible within the pleaded case against both SPI and USC.  Whether it leads in a probative fashion to establishing a breach of duty with the necessary causal link to the damage sustained by Mrs Matthews and the group members is another question which cannot be resolved until all the evidence is evaluated in ten months’ time.

1. The problem that arises is that admission of these reports has the potential to open up a raft of side issues which are kilometres, if not continents away, from the real controversy:

(a)SPI and USC may, in response to the admission of the reports, seek to produce hundreds of audits of other USC inspectors to counter the suggestion that there was a systemic problem with pole top inspections – which they would also be entitled to do; and

(b)SPI and USC, in response, would be entitled to address the audit reports individually by, at the least, calling the inspector to rebut the suggestion that he or she was less than diligent in the inspection of pole top assets (thus questioning the accuracy of the audits).

1. This may mean that weeks of this trial could be devoted to analysis of documents or oral evidence relating to inspectors who have nothing to do with the central issues in this case. This exercise would be totally out of proportion to the probative value of the reports.

1. Further, whilst the reports identify failings in relation to “pole top maintenance” items, they address a large number of issues irrelevant to this trial – for instance, an inspector not testing the integrity of a pole adequately (by failing to dig deep holes, for instance), or not observing a defect with a service line. Moreover there is no separate identification of problems or failings with the inspection of conductors or conductor fittings which is a central issue in this trial.  The relevance, therefore, of the reports taken as a whole, is minimal – as a group they support an assertion that there were systemic deficiencies with pole top inspections.  Individually they are irrelevant.

1. Subsequent to hearing argument concerning the admissibility of these reports (upon which I reserved my decision), a number of documents were tendered by Mrs Matthews out of the USC discovery which, substantially, demonstrate the point sought to be made out of the individual reports.  USC routinely produced audit summary reports on a 12 month rolling basis as part of its monthly reporting to SPI. These reports summarise the cumulative “failings” of inspections as recorded in the reports, including those related to pole top maintenance. Indeed some go further and identify the precise defect identified in the audit process (such as a conductor or cross arm).[10]

[10]Exhibit UAM.0100.001.8010.

1. Produced in one such report is the graph above, which shows that in USC’s 12 month rolling audit summary from 2006-2007 there was a high average of “points” lost per audited pole as a result of failure to identify “pole top maintenance”.

1. When I asked counsel for Mrs Matthews why, after that group of documents was produced, this would not do the job in proving the point of asserted systemic failures identifying pole top maintenance items, he responded as follows –

As I explained to your Honour the other day, the additional information we get from the audit reports which is not shown up here is that the audit reports show it’s a repeat problem, even for individual inspectors. So across the listing you have got three or four different occasions when one inspector is picked up as having a continuing problem. You don’t get that information from this.[11]

[11]T 3407.

1. Section 135(c) enables a Court to exclude the admission of evidence once it has considered its probative value as against the potential prejudice in terms of time wasting.

1. In Koninklijke Phillips Electronics NV v Remington Products Australia Pty Ltd[12] Burchett J said in relation to s 135(c):

   [12][2000] FCA 876 (“Koninklijke”).

It is plain that the statute is speaking in extremely broad terms, of uncertain import, which must be construed as leaving a great deal to the judgment of the trial judge, but that judgment must be exercised on a ground of principle.[13]

His Honour then referred to a decision of Gummow J in D F Lyons Pty Ltd v Commonwealth Bank of Australia:[14]

[His Honour] accepted that there was a “discretion described in the authorities” which enabled him to refuse to enter upon a burdensome enquiry from which “there might be no substantial countervailing benefit in assisting the resolution of the primary issues”.[15] 

[13]Ibid [21].

[14](1991) 28 FCR 597, 607.

[15]Koninklijke [2000] FCA 876 [21] (citations omitted).

1. I therefore accept that s 135(c) permits the preclusion of the admission of this group of documents in circumstances where their admission would mean setting in train a course which has the potential to unduly delay the proceeding and will have “no substantial countervailing benefit” in the determination of central issues in this trial.

1. I have noted that the probative value of the reports as a group is insignificant.  I have also made the point that the audits are irrelevant to the Valley Span and its inspections by USC. Insofar as they establish the underlying material for proving an asserted systemic problem with inspections of pole top assets, the audit summaries demonstrate that point.  The only remaining point, as identified by counsel, is whether any of the particular inspections were indicative of inspector recidivism in relation to pole top inspections.  That issue can be resolved without the tender of the reports at this point of time.  It is known that a number of employees of SPI and USC will be called who have a familiarity with the auditing system and its application in the field; undoubtedly, they can be questioned as to the number of inspectors who repeatedly failed the pole top inspection aspect of the audit.

1. To put it bluntly, the admission of the reports has the potential to waste an enormous amount of time on a point which goes to the heart of the periphery of the issues in this trial.  The reports are of minimal probative value given the evidence which has already been adduced and will be called later in the trial.

1. I propose to reject the tender of these documents pursuant to s 135(c). Nothing in my ruling, however, precludes Mrs Matthews from relying upon any of the reports in the cross examination of witnesses called by SPI and USC on the question of the training of asset inspectors.