Metroplaza P/L v Girvan NSW P/L

[1993] FCA 1050

JUDGMENT No. ... .....,....... J ,.,,, 3,. JOSO 4

CATCHWORDS

EVIDENCE - admissibility and relevancy - statements by employees or directors in course of Royal Commission investigations - principal and agent - authority to make statements - whether authority for limited purpose - Roval Commissions Act 1923 (NSW) s 17.

PRINCIPAL AND AGENT - authority to make statements - employer and employee - evidence and inferences to establish prima facie authority.

Roval Commissions Act 1923 (NSW) - s 17

v Haaue (1804) Esp 134 at 135; 170 ER 763

Bovle v Wiseman (1855) 11 Exch 360

Fraser Henleins Ptv Ltd v	(1945) 70 CLR 100
Central Oueensland Cement Ptv Limited v	(1989) 2 Qd R

509
Ex uarte Gerard & CO Ptv Ltd: re Craiq (1944) 44 SR(NSW) 370
British Thomson Huston Comuanv Ltd v British Insulated and
Helsbv Cables Ltd [l9241 2 Ch 160
Bond Media Ltd v John Fairfax Grouu Ptv Limited (1988) 16

NSWLR 82

AUSTRALIA

METROPLAZA PTY LIMITED v GIRVAN NSW PTY LIMITED (IN LIOUIDATION). C.C. (NEW SOUTH WALES) PTY LIMITED (IN LIOUIDATION) formerlv known as CONCRETE CONSTRUCTIONS (NSW) PTY LIMITED. LEIGHTON CONTRACTORS PTY LIMITED. HOLLAND STOLTE PTY LIMITED. THE MASTER BUILDERS ASSOCIATION OF NSW. AUSTRALIAN FEDERATION OF CONSTRUCTION CONTRACTORS. JOHN CUNNINGHAM. MULTIPLEX CONSTRUCTIONS PTY LIMITED

No. NG 5 of 1992

FOSTER J

9 AUGUST 1993	2 9 AUG 1994
SYDNEY	FEDERAL COURT OF
IN THE FEDERAL COURT OF AUSTRALIA	)
I
NEW SOUTH WALES DISTRICT REGISTRY j	NO. NG 5 of 1992

1

GENERAL DIVISION )

BEmEN:  METROPLAZA PTY LIMITED

Applicant

AND :  GIRVAN NSW PTY LIMITED (IN
LIQUIDATION)

First Respondent

C.C. (NEW SOUTH WALES) PTY

LIMITED (IN LIQUIDATION) formerly known as CONCRETE CONSTRUCTIONS (NSW) PTY LIMITED

Second Respondent

LEIGHTON CONTRACTORS PTY

LIMITED

Third Respondent

HOLLAND STOLTE PTY LIMITED

Fourth Respondent

THE MASTER BUILDERS

ASSOCIATION OF NSW

Fifth Respondent

AUSTRALIAN FEDERATION OF

CONSTRUCTION CONTRACTORS

Sixth Respondent

JOHN CUNNINGHAM

Seventh Respondent

MULTIPLEX CONSTRUCTIONS PTY

LIMITED

Cross-Respondent

CORAM:	FOSTER J
DATE :	9 AUGUST 1993

REASONS FOR JUDGMENT

(Extempore)

The applicant has tendered number

documents, each of which has been objected to by the

respondent against whom the tender has been made.

I shall deal first with the tender of the following

documents :

a)	a signed statement of Arthur Harry Shead, Exhibit B, pages 393 - 396, together with the original of that document with certain annexures. That document was tendered against the fourth respondent;
b)	two signed statements of Peter Woollard, tendered against the second respondent. These statements are Exhibit F, pages 1095 - 1113 and pages 1114 - 1118;
c)	as against the third respondent, a signed statement of Leon Dixon dated 17 June 1991, Exhibit B, pages 387 - 392.

In relation to the admissibility of these documents, I have heard extensive oral argument with elaborate citation of authority. This material is recorded in the transcript and all counsel have the benefit of their submissions. I do not propose to make extensive reference to these submissions in

these short reasons. It should also be noted that the	opportunity was given to counsel for respondents other than
the respondent against whom the documents were tendered to add to the submissions, if desired, on the basis that the documents might thereafter be tendered against those respondents.

The submissions made against the admissibility of
these documents fall into two categories. The first is that
the evidence in the case affords no adequate basis for finding
that any of the persons providing .the signed statements did so
as agents for the respondent employing him. The second is
that even if agency be established, it was necessary only for
the limited purpose of providing information for the sole use
of the investigation being conducted by the Royal Commission.
The first category requires consideration of the position of
each individual signatory. The second, as I see it, requires

only a broad consideration of principle.

The admissibility of each statement falls for consideration against the background that it was provided to an investigator on behalf of the Royal Commission in an interview clearly conducted for the purpose of obtaining information on the topics dealt with in the statement. Also, as appears from admissions in the pleadings in the case, each signatory had been present on behalf of his employer respondent at the meetings of the 18th and 21st October 1988 and, so far as the alleged agreements are admitted, acted for

the respondent in arriving at the agreements.

The authority of an agent to make admissions on behalf of a principal, particularly when that principal is a company, is subject to limitations which have been explored in decided cases. The topic has also received much exposition and discussion in leading textbooks. I have been referred to this material by counsel. In my respectful opinion, the position is correctly stated by the learned authors of Cross on Evidence, 4th Australian Edition at page 931, paragraph [33540] which reads as follows:

"Statements made to third persons by an agent within the scope of his authority and during the continuance of the agency may be received as admissions against his principal in litigation to which the latter is a party. So far as the reception of admissions is concerned, the scope of authority is a strictly limited conception. It is sometimes said that the agent must be authorised to make the admission, but that is a confusing statement, for admissions are often received although no one was expressly or impliedly authorised to make them. A better way of putting the matter is to say that the admission must have been made by the agent as part of a conversation or other communication which he was authorised to have with a third party."

In this case the statements of each signatory were made in 1991, some three years after the events discussed in them. The submission is made on behalf of all respondents that even if the agent had authority to perform the acts on behalf of his employer in 1988, that did not mean ipso facto that he had authority to make admissions about those acts three years later. The authority to perform an act on behalf

of a principal does not carry with it the authority to speak	about that performance, at least at a time unconnected with
the performance. There is ancient authority for this
proposition:  v Haaue (1804) Esp 134 at 135; 170 ER 763.
It is also stated in Cross at page 932 that:

"The existence of the agency must be proved before the agent's admission can be received against the principal. It may sometimes be possible to imply the existence of the agency from the surrounding

circumstances. "

I do not apprehend that the learned authors meant that at the level of the decision as to admissibility the question of authority must be finally determined. Obviously, the decision at that level must be made on the basis of evidence then in the case and available inferences. Voir dire hearings are always possible and evidence can be tendered in such a hearing, both for and against a finding of authority in the agent to make admissions: Bovle v Wiseman (1855) 11 Exch

360. If no such structured hearing is called for by a

respondent and no evidence tendered on its behalf to negate a finding of authority, then, in my view, on ordinary principles inferences available on the existing evidence as to the circumstances of the case may more readily be drawn.

It should be noted that, unlike a number of the cases cited in argument, this is not a case of a criminal prosecution where considerations of the shifting of evidentiary onuses would not apply. It is sufficient that a prima facie case of authorisation be established in order to

ground admissibility. Having made these observations, I turn	to the individual statements in the order to which I have
already made reference.

In the case of Shead's statement, I have regard to

the following evidence:

(a) The admission made for the purpose of the case by the fourth respondent that as at 15 May 1991 Mr Shead was director and general manager, state operations, of the John Holland Group of New South Wales and had held that position for approximately two years. Prior to that, he was New South wales state manager of the fourth respondent, which was the building division of the John Holland Holdings Limited group.

(b) He was appointed a director of the fourth respondent

on 4 August 1988.

(c) He attended the meetings of the 18 and 21 October as sole representative of the fourth respondent. It is admitted on the pleadings that an agreement was reached at these meetings.

(d) Material in Exhibit W shows him to have been at all

relevant times a highly valued employee of the fourth
respondent.

(e)	He was the only signatory to the fourth respondent's
tender documents.

(£1 The terms of the correspondence, Exhibit G, being a facsimile transmission cover sheet and letter from the solicitors for the fourth respondent to MS Ross, the investigator for the Royal Commission.

(9) The statement of solicitors' fees rendered to the Holland Group for those solicitors advising in relation to Shead's attendance at the interview and in relation to his statement glven to the Commission.

It may be that the position held by M r Shead with the fourth respondent was not such as to require, without more, the implication of authority to speak on its behalf: Fraser Henleins Ptv Ltd v (1945) 70 CLR 100. But the evidence satisfies me that in the context of the inquiries of the Royal Commission and the fourth respondent's situation of co-operating with it, he was in every respect the logical person to be nominated by the fourth respondent to attend and answer the investigator's questions as to the events of October 1988 and related matters.

In these circumstances, I have no difficulty in drawing the prima facie inference that he was specially authorised on this occasion to have a relevant conversation with the investigator. I find the necessary authority established prima facie to ground the admissibility of this

statement.

I turn, then, to Woollard's statement. In relation to this there are the following significant matters. First, admissions were made for the purpose of these proceedings in accordance with the request for such admissions made in Exhibit N. It appears that he was in May/June 1992 one of two senior estimators employed by the second respondent and was also a director of the second respondent at all material times. Secondly, there is abundant evidence that shows he had the carriage of the tender on behalf of the second respondent and was its representative at the crucial meetings of 18 and

21 October. Although his position may not as such lead to the

implication of relevant authority within the principles enunciated in decided cases he was nevertheless a logical person to be nominated to answer the inquiries of the investigating officer on the topics dealt with in his statement.

Additionally, Exhibit H, which is the cover sheet of submissions forwarded to the Commission on behalf of the second respondent and Woollard together with page 2 of those submissions says of the statements in question that they were part of the material provided to the Commission as to "Concrete's knowledge of and involvement in the practices". The cover sheet sufficiently indicates that the practices in question were those of "collusive tendering".

As I have said, Woollard's position in the company was not as such as of itself to lead to the relevant implication of authority to make admissions as to past events. However, the above circumstances and the absence of countervailing evidence satisfy me prima facie that he had special authority to provide information to the investigator on behalf of the second respondent. I thus find relevant

authority proved.

I turn, then, to the statement of Leon Dixon. It

may be said at the outset that of all the signatories he is the one least likely to qualify as having the employer's authority to make admissions. Hls position in the third respondent's organisation would certainly not itself lead to any implication of such authority on ordinary principles.

However, the following facts are of significance. He signed the tender documents and represented the third respondent at the meetings of October 1988. He had been at relevant times one of two chief building estimators in New South Wales of the third respondent and played an important role in the tendering process. He was accompanied to the interview by the third respondent's in-house lawyer who was also a senior executive of the third respondent.

He was a person who, on the face of it, was very
likely to be able to inform the investigator as to the topics

apparently being inquired into and likely as such to be chosen

proffered to the effect that he had no authority to speak on	give such information on its behalf. No evidence has been by the third respondent to represent it at the interview and	behalf of the third respondent at the interview. In the
circumstances I consider that the inference is open that he
was empowered by the company to provide information on its behalf to the investigator. The inference is strengthened by the absence of countervailing evidence from the third respondent which would, of course, be in possession of all relevant facts bearing upon Dixon's authority. In these circumstances I am prepared to draw and, indeed, do draw the prima facie inference that he had authority to make the statement on behalf of that respondent.
I come, then, to the remaining question whether the authority which I have held prima facie to exist in respect of all three men, was qualified so that it related only to the provision of information to the Commission. No evidence of any such limitation of qualification has been tendered. It has been submitted, however, that I should imply such a restriction on the basis of analogy. It has been forcefully submitted that I should extract an underlying rationale from cases cited to me which establishes that admissions on pleadings made in one case do not bind parties in a subsequent case or that evidence called by a party in one case is not to be treated as having been adopted by it in a subsequent case. A fairly close analogy is to be found in Central Oueensland Cement Ptv Limited v Hardv (1989) 2 Qd R 509, a case relating
require that any admissory statements made in these interviews to witness statements. Such rationale, it is submitted, would
be regarded as being made only to the Commission investigator for the sole purposes of the Commission.
I have given anxious consideration to these submissions but in the upshot I am not satisfied that I can or should so extend the principles of these cases to non-curial situations.

The Roval Commissions Act 1923 (NSW) extends protection in certain circumstances to testimony, oral and documentary, given before it: see s 17. It makes no such provision in respect of information given to investigators. It is significant, in my view, that such statements are not given under compulsion. They are voluntary statements and are therefore in a materially different category from statements given under compulsion, such as the statement given to an investigator in Ex Darte Gerard & CO Ptv Ltd: re Craiq (1944) 44 SR(NSW) 370, a case heavily relied upon by the respondents.

That the compulsory nature of the statement in that case was of fundamental significance is to be seen from the discussion of the case by Latham CJ in Fraser Henleins Ptv Limited v (1945) 70 CLR 100 at 113. It may also be observed that in the case of British Thomson Huston Com~anv

Ltd v British Insulated and Helsbv Cables Ltd [l9241 2 Ch 160, a case also heavily relied upon by the respondents. Lord Justice Atkin was prepared to envisage, at page 170, a

qualification to the stated principle that:

party in proof of any fact is not admissible in	"[Elvidence of third parties used in a trial by a
proof of such fact against that party in any subsequent suit in which he is a litigant."

The qualification enunciated by Lord Justice Atkin was in respect of evidence given by a witness:

"who at the former trial was in fact the agent of the party, authorized to give the evidence on his behalf..."

In those circumstances his Lordship expressed the view that the evidence might well be admissible. Even if I was prepared to extend, by analogy, the principle in the manner that it is submitted that I should, that analogy would take with it the enunciated exception to which I have just made reference.

I have come to the conclusion that, in the absence of clear authority to the contrary, I am not prepared to treat these three statements other than as being admissions against interest made to third parties and therefore admissible in the ordinary way as established exceptions to the hearsay rule. I therefore admit all these statements. The statement of Shead will be Exhibit Y. The first statement of Woollard will be Exhibit 2. The second statement will be Exhibit AA. The statement of Dixon will be Exhibit AB.

I have also had to deal with objections made on

behalf of the fifth, sixth and seventh respondents to certain

Twyford, Richmond and Cunningham; these transcripts being	transcripts of testimony given before the commission by Messrs
tendered as evidence against the respective respondent employers of those persons. I consider that these objections must be upheld. These statements were glven under compulsion In the course of sworn testimony before the Commission. There is no basis for holding that they were given by the witnesses as agents for the employer respondents: Bond Media Ltd v John
Fairfax Group Ptv Limited (1988) 16 NSWLR 82 at 86 to 87; Cross, page 392.
The statement of Cunningham is not admissible against him personally as a party in these proceedings by virtue of s 17 of the Roval Commissions Act 1923 (NSW). Indeed, as I understand the position it is not, in fact, tendered against him in that situation.

Those are the rulings I make in respect of those

matters.

I certify that this and the preceding twelve (12) pages are a true copy of the reasons for judgment herein of the Honourable Mr Justice M. L. Foster.

Associate:	b f , .,
Date :	9 AUGUST 1993

A P P E A R A N C E S

COUNSEL FOR THE APPLICANT:  MR J.M. SPENDER, QC

with MR D.J. HAMMERSCHLAG

INSTRUCTED BY:  ROSENBLUM & PARTNERS

COUNSEL FOR THE SECOND RESPONDENT: THE HON. T.E.F. HUGHES, QC

with MR R.E. DUBLER

INSTRUCTED BY:  CORRS CHAMBERS WESTGARTH

COUNSEL FOR THE THIRD RESPONDENT: MR J.D. HEYDON, QC

with MR C.P. C O W S

INSTRUCTED BY:  ROBIN MAXAM

COUNSEL FOR THE FOURTH RESPONDENT: MR M.R. ELLICOTT

INSTRUCTED BY:  ADDISONS

COUNSEL FOR THE FIFTH, SIXTH AND SEVENTH RESPONDENTS:

MR J.B. SIMPKINS

INSTRUCTED BY :  COLIN BIGGERS PAISLEY

COUNSEL FOR THE CROSS-RESPONDENT: MR B.W. WALKER

INSTRUCTED BY:	DUNHILL MADDEN BUTLER
DATE OF HEARING:	9 AUGUST L993
DATE OF JUDGMENT:	9 AUGUST 1993