Metlife Insurance Ltd v Visy Board Pty Ltd & 25 ors

[2007] NSWSC 1415

CITATION:	Metlife Insurance Ltd v Visy Board Pty Ltd & 25 ors [2007] NSWSC 1415
HEARING DATE(S):	12 November 2007
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	12 November 2007
DECISION:	Tenders admitted
CATCHWORDS:	EVIDENCE – Relevance – Provisional relevance – Evidence Act, s 57 - EVIDENCE – Admissions – Authority – Evidence Act, s 87 - EVIDENCE – whether unduly prejudicial – Evidence Act, s 135 - EVIDENCE – rectification suit – evidence of post-contractual facts
LEGISLATION CITED:	(NSW) Evidence Act 1995, ss 57, 69(3), 87, 135
PARTIES:	Metlife Insurance Limited (plaintiff) Visy Board Pty Limited (1st defendant) Visy Paper Pty Limited (2nd defendant) Visy Board Superannuation Pty Limited (3rd defendant) Arpad Kozma (4th defendant) Colin Frewen (5th defendant) Reginald De Livera (6th defendant) Stephen Smith (7th defendant) Florian Karwacki (8th defendant) Sylvia Kleinman (9th defendant) Oscar Marconi (10th defendant) Petru Suciu (11th defendant) Thomas Hall (12th defendant) Mark Williams (13th defendant) Concetta Tedesco (14th defendant) Don Rakoci (15th defendant) Slako Gorguc (16th defendant) Shane Rogers (17th defendant) Maurice Rafidi (18th defendant) Edward Denko (19th defendant) Maria Drago (20th defendant) Milenco Baloi (21st defendant) Cane Mickovski (22nd defendant) Eyup Turkoglu (23rd defendant) Ugur Arslan (24th defendant) Gregory Sabitino (25th defendant) Ramadan Salievski (26th defendant)
FILE NUMBER(S):	SC 6399/06
COUNSEL:	I M Jackman SC (plaintiff) B G Haines (sol) (1st - 3rd defendants) R E Montgomery (4th - 26th defendants)
SOLICITORS:	Deacons (plaintiff) Holding Redlich (1st - 3rd defendants) Maurice Blackburn Cashman (4th - 26th defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Monday, 12 November 2007

6399/06 Metlife Insurance Limited v Visy Board Pty Limited & ors

JUDGMENT (ex tempore)

On admissibility of Annexure A to the affidavit of Ms Norris sworn 2 April 2007

1 HIS HONOUR: The defendants object to the admissibility of Annexure A of the affidavit of Ms Norris, which is a facsimile transmission dated 27 February 1998 from Buck Consultants to an officer of the plaintiff, then known as Citicorp Insurance. The primary basis upon which the letter is said to be admissible is that it is a pre-contractual communication from which it will be argued in due course that it appears that the parties had reached a consensus on a term different from that which appears in the insurance contract as it was ultimately formalised. Such a pre-existing consensus will be relied upon in support of the claim for rectification of the insurance policy.

2 I fully accept that Annexure A will contribute to that case only if the author had the authority of the Visy companies to negotiate an insurance contract with Citicorp on their behalf. The defendants' fundamental objection is that there is no evidence that the author, Ms McDonnell, had that authority.

3 In the course of Mr Jackman's opening he has taken me to a body of evidence from which it will, in due course, no doubt be argued that an inference should be drawn that Buck Consultants generally, or their Manager, Ms McDonnell, had that authority. I cannot tell at this stage whether or not that argument will succeed. However, (NSW) Evidence Act 1995, s 57 provides that if the determination of the question whether evidence adduced by a party is relevant depends on the Court making another finding, the Court may find the evidence is relevant if it is reasonably open to make that other finding.

4 In this case, determination of the question whether this communication is relevant depends on the Court making another finding, namely, that Ms McDonnell was a duly authorised agent of Visy. In my view, on the material to which I have been taken, it is reasonably open, in the sense in which s 57(1) uses that term, to make that finding. That is by no means to say that it is probable, let alone more probable than not, that such a finding would ultimately be made.

5 Although it may not be directly on point, s 87 is also instructive, in providing that 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 when the representation was made, the person 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. Sub-section (2) provides that the hearsay rule does not apply to a previous representation made by a person that tends to prove that the person had such authority. Again, for the purposes of s 87, I think it is at this stage reasonably open to make the relevant findings in the sense that that term is used within s 87.

6 It was at least hinted, if not advanced in the course of argument, that the admission of the documents such as Annexure A permitted the plaintiff to put forward a case which could not be tested. Reference was also made in this regard to the scheme questionnaire document, which is presently Exhibit PX01. I take that to be an objection under s 135 that the prejudicial effect of the documents in question outweigh their probative value.

7 However, it seems to me, in a case of this type contemporaneous communications before the issue arose may often be a more reliable indication than the subjective expressions of intent by one or other parties to the litigation. I do not accept that this document has a prejudicial effect that outweighs its probative value.

8 Accordingly, I admit Annexure A to the affidavit of Ms Norris.

On admissibility of Exhibit PX01

9 I have previously admitted the original scheme questionnaire as PXO1, a copy of Annexure E to Ms Norris' affidavit. Although previously admitted, I entirely accept that that was as a result of a misunderstanding of what was happening at that stage, and I will treat this objection as if the document had not already been admitted.

10 Again, this document's primary basis of admissibility is not for the hearsay purpose of proving the truth of any previous representation contained in it, but for the purpose of proving the document as a transactional document passing between the parties at the relevant time. It is subject to the same considerations, so far as authority is concerned, to which I have referred in respect of Annexure A to Ms Norris' affidavit. The admissibility of the document on that basis does not depend on the identification of the author of any of the handwriting on it, although it may be relevant to establish when the handwriting was on it.

11 A basis has been put forward by Mr Jackman SC on which inferences might arguably be drawn in that respect. Again, I do not know at this stage whether it would be appropriate to draw such an inference, but I am not prepared to say it is unarguable that such an inference should be drawn.

12 Accordingly, I admit Annexure E and Exhibit PX01 will remain admitted.

On admissibility of Annexure H to the affidavit of Ms Norris sworn 2 April 2007

13 Annexure H is a facsimile communication dated 29 July 1999, from Buck to Citicorp, which contains statements from which it is arguable that an inference might be drawn as to the intention of Metlife at the relevant time. In New South Wales Medical Defence Union v Transport Industries Insurance Co (1986) 6 NSWLR 740, Clarke J said (at 752):

There is authority for the proposition that a party can say that the document is consistent with his intention: Snell's Principles of Equity 28th ed (1982) at 612; Fowler v Fowler (1859) 4 De G & J 250 at 273; 45 ER 97 at 107. If that evidence is receivable then the contrary (ie that the party's intention was not reflected in the document) should also be admissible. Similarly it seems to me that facts, whether pre or post contractual, from which an inference can be drawn that a party had, or the parties had, at the time of entering into the transaction, a particular intention should be received.

It is necessary to exercise caution, however, in receiving evidence of the post contractual conduct by a party because this may provide no evidence of his intention prior to, and at, the time of the execution of the contract but only of a later intention which may have been different.

14 Applying that test and exercising that caution, it seems to me that the appropriate course is to admit this letter, and other material to which objection is taken on the basis that it evidences the post contractual understanding of one or both of the parties, on the basis that it may be arguable that an inference should be drawn from those communications as to the intention of the parties at the time of contracting; but it needs to be borne in mind that in considering that evidence it may do no more than establish a subsequent intention or understanding.

15 On that basis, I will admit Annexure H.

On admissibility of Annexures J and K to the affidavit of Ms Norris sworn 2 April 2007

16 Annexures J and K are objected to on the basis that, as well as being post contractual, their admissibility as a business record is excluded by (NSW) Evidence Act 1995 s 69(3), which excludes documents prepared in contemplation of an Australian or overseas proceeding. These documents anticipate an insurance claim and are addressed to solicitors. However, the evidence at this stage does not establish that litigation was contemplated in the relevant sense at that time. What was contemplated was a TPD insurance claim, and in my view the evidence does not establish that an Australian proceeding, as distinct from an insurance claim, was then contemplated.

17 I will admit Annexures J and K.

On affidavit of John Berrill sworn 7 November 2007

18 The affidavit of John Berrill, sworn 7 November 2007, is objected to only on the ground of relevance. I say that, because I understand no point to be taken about its obvious formal defects, being sworn on information and belief without disclosing the source of the information and on a final hearing.

19 It seems to me that it might be arguable that a comparison of the position of an employee such as Mr Kozma in the different situations, depending on whether the policy was rectified or not, might bear some relevance to the objective likelihood of Visy having the intention for which the plaintiffs contend, or might possibly bear on questions of discretion.

20 I will admit the affidavit.

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