Saffron, A.G. Commissioner for Taxation

[1992] FCA 774

-.

JUDGMENT No. ...z .2..9..~ .......,.. '

C A T C H W O R D S

~vidence - admissibility - s.54 of Evidence Act 1898

(N.S.W.) - evidence of inconsistent statement previously

made by witness - whether the statement is relative to the

subject matter of the cause.

5 August 1992

BEAUMONT J.
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA	)
NEW SOUTH WALES DISTRICT REGISTRY	) NO. NG202i-2026 of 1987
GENERAL DIVISION

BETWEEN:	ABRAHAM GILBERT SAFFRON Applicant
AND	COMMISSIONER OF TAXATION Respondent

CORAM:	Beaumont J.
m:	5 August 1992
PLACE :	Sydney

MINUTES OF ORDER

THE COURT ORDERS:

Document MFI PW1 is admitted as going to credit.

Note:  Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

I\

NEW SO~JTH WALES DISTRICT REGISTRY ) NO. NG2021-2026 of 1987 . ,'	i	,	'	l
1	,

GENERAL DIVISION 1

BETWEEN:  ABRA~AM GILBER? SAFFRON l.

' , I

,., , v : .

Applicant	,I..? - % v! m
. .

AND	COMMISSIONER OF TAXATION , :'
Respondent

C O W	:	Beaumont J.
DATE :	5 ~ugdst  1992

EX TEMPORE REASONS FOR JUDGMENT
(Rulina on admissibilitv of alleaed urior inconsistent
statement of witness1

The tender is objected to by the Commissioner on the ground that it is not relevant to any issue and also, on the ground that it is hearsay and that none of the exceptions, either at common law or by statute, to the hearsay rule are applicable in the present circumstances.

Senior counsel for the taxpayer seeks to tender the statement on the limited basis that it is evidence of ah

incongishnt statement previously made by a witness whicg"
quaiifies for admission pursuant to s.54 of the Evidence A C ~
1898 (N.s.w.) picked up for our purposes by s.79 of khd
~udiciarv Act 1903. It is alternatively contended on behiif
of the taxpayer that the material is admissible under the
general law in circumstances similar to those specified ih
S. 54 of the Evidence Act.

By s.54 it is provided that if a witness, upon

cross-examination as to a former statement made by him

I C

relative to the subject matter of the cause which is inconsistent with his present testimony, does not distinctly admit that he has made such a statement, proof may be given that he did in fact make it. However, before such proof can be given the circumstances of the supposed statement sufficient to designate the particular occasion must be mentioned to the witness and he must be asked whether or not he has made such a statement.

As Jacobs J pointed out in Patmov v Paltie [l9601

NSWR 334 at 335-6 the general law is to similar effect. In

particular, as his Honour pointed out by reference to Starkie's Law of Evidence (1853), it is a general rule at commbn law that whenever the credit of a witness is to be impeached by proof of anything that he has said or declared or

done in relation to the cause, he should first be asked upon	cross-examination whether he has said or declared or done that
which is intended to be proved. (See at 336.)

In v The Oueen (1987) 75 ALR 143 a Full Court

of this Court held that evidence of a prior inconsistent statement, even if oral, may be admissible as going to the credit of a witness under the previous inconsistent statement

exception to the rule against calling evidence to contradict
answers given by a witness in cross-examination.

AS has been seen, it is first necessary to establish that the statement in question is relative to the subject matter of the cause on behalf of the Commissioner. It is argued that this initial ingredient of s.54 is not satisfied in the present case. In my opinion this contention must be rejected. In para.5 of M r Wise's statement there is evidence of a statement alleged to have been made by bookkeeper X that

M r Anderson kept his own set of books, "which showed

everything". There is further evidence in paragraph 5 of Mr Wise's statement that bookkeeper X stated to him that these books were hidden and for a period were in her custody and that eventually they were destroyed.

One of the principal issues in the present appeals

is the method or methods of bookkeeping adopted for the

which the Commissioner contends the taxpayer had an interest.	purpose of accounting for the various business activities in	It follows in my view that evidence tending to show that more than one set of books was kept for those purposes is evidence which is material to the subject matter of the present cause.
It is further submitted on behaif of the Commissioner that the proviso to s.54 is not satisfied in the present case. A related argument was also advanced that the

" pursuit of the material now sought to be agitated would involve the court travelling into an area of collateral inquiry which would be, at best, of doubtful assistance in the ultimate resolution of the real issues in the proceedings.

I have some degree of sympathy with both the

submissions but with some hesitation I have come to the
conclusion that I should reject them also.

In the course of cross-examination of bookkeeper X the following questions were put to that witness by senior counsel for the taxpayer:

"You see there are a third se t o f books, were not there, i n respect o f M r Anderson's business, i s not that right?---What do you mean there are a third set

o f books? I only ever kept two sets o f books.

colourfully described as the tartan books?---Oh	Were there not a set o f books called - which were
really , no, I 've never heard o f the tartan books. I
am sorry.
You have never heard of accounting books?---No.
Were not they books which Mr Anderson gave you for safe keeping?---No.
And were not they books that you destroyed by burning?---No.
You deny that?---I thoroughly deny i t . I have never seen or heard o f Tartan books.
NO.
YOU have never seen heard o f those,
And you h a v e never t o l d anyone a b o u t those, you s a y ,
d o y o u , those T a r t a n books7 - - - I h a v e never even
h e a r d o f them. Why would I t e l l a n y b o d y a b o u t
T a r t a n b o o k s 7
And t h a t c o u l d not j u s t be a s l i p o f r e c o l l e c t i o n , I
t a k e i t 7 You a r e e m p h a t i c t h a t t h a t i s the t r u t h ,
a r e you7---The o n l y other books t h a t I k e p t were Mr
A n d e r s o n ' s p e r s o n a l c h e q u e books and bills.
W e l l , d i d you w r i t e u p a set books a b o u t t hose7 - - -
NO.
S o t h a t a t h i r d set o f books r e l a t i n g t o some o f M r
A n d e r s o n ' s b u s i n e s s e s c a l l e d the T a r t a n books you
know n o t h i n g o f ?---Nothing.
And never h a v e h e a r d o f them7---Never h e a r d o f
T a r t a n books.
And c e r t a i n l y were never g i v e n them7---No.
And c e r t a i n l y never d e s t r o y e d them7---Never
d e s t r o y e d them, no.
And you h a v e never t o l d anyone , h a v e y o u , t h a t they
e x i s t e d and t h a t you d e s t r o y e d them7---No."

Subsequently, senior counsel for the taxpayer put the following further questions to the witness:

"Madam,	y e s t e r d a y	I	a s k e d	you	some	q u e s t i o n s	a b o u t	the
c o n v e r s a t i o n	w i t h	a	t h i r d	p e r s o n	a b o u t	a	t h i r d	set	o f

books. D o you know a M r P e t e r Wise7---He i s M r S a f f r o n ' s

sol ici tor, or he h a s a c t e d for M r S a f f r o n . I know M i -

W i s e , he	h a s a c t e d	f o r m y s e l f and m y husband.
Did not you	te l l M r W i s e t h a t there was a	t h i r d set

o f b o o k s r e l a t i n g t o these v a r i o u s b u s i n e s s e s i n

w h i c h M r Anderson was involved?- - -No."

It is true that in the two statements attributed to
bookkeeper X in paragraph 5 of Mr Wise's statement taken
literally there is no exact correspondence to the matters put

in cross-examination in the two passages in the transcript to
which I have made reference. Nonetheless I think that the
substance of the two statements of bookkeeper X attributed to
her in paragraph 5 of Mr Wise's statement were put to her and
denied. In particular, at the top of page 810 of the
transcript it was suggested to bookkeeper X that she told Mr
Wise that M r Anderson (Jimmy) gave such a set of books to her
for safekeeping. Implicit in this is that Mr Anderson kept a
set of books, and that these books were kept for his own
purposes.

So far as the second statement attributed to bookkeeper X in paragraph 5 to Mr Wise's statement is concerned the destruction by burning was put to the witness.

In Savanoff v Re-Car Ptv Limited (1983) 2 Qd R 219
at 229 McPherson J pointed out that the Queensland equivalent

of s.54 does not oblige the cross-examiner to provide an

may be a salutary practice to permit it.	opportunity for explanation of the inconsistency, although it	McPherson J went on to observe that consequentially this provision can have only limited application to a case where the witness is himself a party to the litigation. In this event the statement would ordinarily constitute an admission and so be evidence of the fact itself and not
merely, as is accepted to be the case in the present circumstances, material by which credibility may be measured.
I propose to admit document MFI PW1 on that limited basis. It will become exhibit PW1.

I certify that this and the preceding five (5) pages are a true copy of the Reasons

for Judgment herein of his Honour Mr.

Justice Beaumont.

Associate -&=----

Dated: 5 August 1992

Counsel and Solicitors	Mr. A.J. Sullivan Q.C. with
for Applicant:	Mr. F.P. Carnovale, instructed by Walker & Raphael
Counsel and Solicitors	Mr. G.K. Downes Q.C. with Mr.
for Respondent:	S. Gibb instructed by Australian Government Solicitor
Date of hearing:	5 August 1992
Date Judgment delivered:	5 August 1992