Southernwood v Brambles (Ruling No 2)

[2022] FCA 1027

FEDERAL COURT OF AUSTRALIA

Southernwood v Brambles (Ruling No 2) [2022] FCA 1027

File number(s):	VID 972 of 2018
Judgment of:	MURPHY J
Date of judgment:	31 August 2022
Catchwords:	EVIDENCE – application for a direction to limit the use of evidence under s 136 of the Evidence Act 1995 (Cth)
Legislation:	Evidence Act 1995 (Cth) ss 59, 60, 136
Division:	General Division
Registry:	Victoria
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	12
Date of hearing:	31 August 2022
Counsel for the Applicants:	Mr B Quinn QC, Mr W A D Edwards, Mr T Chalke and Mr T Rawlinson
Solicitor for the Applicants:	Maurice Blackburn Lawyers and Slater & Gordon Lawyers
Counsel for the Respondent:	Mr M Borsky QC, Mr K Loxley and Ms S C B Brenker
Solicitor for the Respondent:	Allens

REASONS FOR JUDGMENT

VID 972 of 2018

BETWEEN:

HOLLY SOUTHERNWOOD

First Applicant

WILLIAM VINCENT KIDD AND MARY AGNES AS TRUSTEES FOR THE MAGNESS-BENNETT SUPERANNUATION FUND

Second Applicant

AND:

BRAMBLES LIMITED

Respondent

MURPHY J:

1. In the trial of this proceeding the respondent, Brambles Limited, seeks to rely on the affidavit of Paul Nicols, a partner of Allens, affirmed 26 April 2022. Mr Nicols is the solicitor on the record for Brambles in the proceeding and is responsible for the conduct of the proceeding on behalf of Brambles. The applicants seek a direction that his affidavit be admitted into evidence subject to a direction pursuant to s136 of the Evidence Act 1995 (Cth) (the Act).

2. The evidence in the trial shows that Tom Gorman, the Chief Executive Officer of Brambles at the relevant time, and Kim Rumph, the President of Brambles’ CHEP North America division at the relevant time, are witnesses whose evidence is likely to rationally probative of the issues to be decided.  Both Mr Gorman and Ms Rumph reside in the USA and are no longer employees of Brambles.  Brambles does not intend to call either of them to give evidence in the proceeding.

3. In his affidavit Mr Nicols deposes to:

   (a)a telephone conversation he had with Tom Gorman, the Chief Executive Officer of Brambles during the relevant period, on 31 October 2019; and an email he received from Mr Gorman on 8 November 2021, broadly in relation to whether Mr Gorman would assist Brambles by providing a witness statement in the proceeding; and

   (b)a telephone conversation he had with Robert Gerrard, Brambles’ Chief Legal Officer, in or around April 2020, and an email he received from Kim Rumph, the President of Brambles’ CHEP North America division during the relevant period, on 7 December 2021, also broadly in relation to whether Ms Rumph would assist Brambles by providing a witness statement in the proceeding.

4. The applicants seek a direction that the use of Mr Nicols’ evidence be limited so that it can only be used to show what Mr Nicols was told: (a) by Mr Gorman in his conversation with Mr Nicols on 31 October 2019; and by Mr Gorman in his email on 8 November 2021; and (b) by Mr Gerrard in his conversation with Mr Nicols in around April 2020; and by Ms Rumph in her email on 7 December 2021.

5. The applicants contend that it would be unfairly prejudicial if Mr Nicols’ affidavit as to the relevant telephone conversations and emails is admitted on the basis that it can be used to prove the truth of the hearsay statements of Mr Gorman, Mr Gerrard and Ms Rumph.

6. It is trite, but necessary to note that the hearsay rule in s 59 of the Act operates to exclude evidence of a “previous representation” when it is adduced to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation (the “hearsay purpose”). In my view, it may reasonably be supposed that the purpose of Mr Nicols’ evidence of the previous representations made by Mr Gorman, Mr Gerrard and Ms Rumph is put forward to show that, in truth:

   (a)Mr Gorman and Ms Rumph are not obligated or compelled, I assume contractually, to assist Brambles in the proceeding by providing a witness statement or giving evidence; and

   (b)more broadly, Mr Gorman and Ms Rumph are not willing to assist Brambles in the proceeding by providing a witness statement or giving evidence.

   Those are hearsay purposes and by operation of s 59 of the Act the evidence is inadmissible to prove the truth of such matters.

7. Having said that, as Brambles’ submitted, Mr Nicol’s evidence may be adduced for the non-hearsay purpose of showing what he was told by Mr Gorman, Mr Gerrard and Ms Rumph in the relevant conversations and emails.  Such evidence is relevant as it may support an inference that the reason why Brambles has not called Mr Gorman and Ms Rumph to give evidence is because they both have declined to cooperate, and because they cannot be compelled to give evidence as they are both residents of the USA.

8. If Mr Nicols’ affidavit is admitted for that, or some other, non-hearsay purpose, by operation of s 60 of the Act the evidence is will be admitted for all purposes.

9. In my view, it would be unfairly prejudicial to the applicants to admit the affidavit into evidence without a direction under s 136 of the Act. If no direction is made the applicants face the risk of a finding that Mr Gorman and Ms Rumph are not obliged to cooperate with Brambles by giving evidence, and are unwilling to give evidence for Brambles in the proceeding, without being able to cross-examine Mr Gorman or Ms Rumph (or even Mr Gerrard) as to whether in fact Mr Gorman and Ms Rumph are unwilling to give evidence, and without being able to test whether their contracts of employment require them to assist Brambles in the proceeding, which Brambles has not enforced. The applicants have indicated that they will seek a Jones v Dunkel inference based on Brambles’ failure to call Mr Gorman and Ms Rumph, and their chance of the Court drawing such an inference is reduced if the hearsay evidence is received as evidence as to the truth of the previous representations made in the telephone conversations and emails.

10. To some extent my view as to the unfair prejudice the applicants may suffer is also based in some obvious gaps in Mr Nicols’ affidavit which skirts around some of the relevant issues.  Amongst other things, he did not depose to:

    (a)what in the conversation he had with Mr Gorman led him to believe that Mr Gorman was not willing to assist Brambles by providing a witness statement, as distinct from his not being compelled to cooperate with Brambles;

    (b)any attempts he or persons within Brambles’ legal department made to persuade Mr Gorman to assist Brambles by providing a witness statement and giving evidence;

    (c)whether he believed that Ms Rumph was not prepared to assist Brambles by providing a witness statement, as he did not directly say so;

    (d)any attempts he or Mr Gerrard made to persuade Ms Rumph to assist Brambles by providing a witness statement and giving evidence;

    (e)whether Ms Rumph at any point actually refused to provide a witness statement or give evidence. Her position is different from that of Mr Gorman, as his email expressly said that he was not willing to do so; and

    (f)any decision made by Brambles not to call Mr Gorman or Ms Rumph to give evidence, or not to make application to take their evidence in the USA, or by video link. 

11. As Brambles submitted, it was open to the applicants to cross-examine Mr Nicols and it may be that some of those gaps would have reduced.  But the applicants contended, and I accept, that they are under no obligation to do so.  In my view, the forensic decision the applicants have made not to cross-examine Mr Nicols is relevant but far from determinative in the application.  Brambles further submitted that the applicants’ submissions were largely directed to being able to test the evidence as to whether or not Mr Gorman and Ms Rumph were actually compelled, presumably by their contracts of employment, to cooperate with Brambles in its defence of the proceeding, and that at no point had the applicants sought that Brambles provide copies of their contracts of employment. That is also relevant but not determinative.  It also cuts both ways.  If the issue turns on whether Mr Gorman and Ms Rumph have an obligation to cooperate with Brambles in its defence of the proceeding, it would have been straightforward for Brambles to provide the contracts once this application was flagged.

12. In my view, it is appropriate to direct pursuant to s 136 of the Act that the use of Mr Nicols’ affidavit be limited so that it can only be used to show what Mr Nicols was told:

    (a)by Mr Gorman in his conversation with Mr Nicols on 31 October 2019; and by Mr Gorman in his email on 8 November 2021;

    (b)by Mr Gerrard in his conversation with Mr Nicols in or around April 2020; and

    (c)by Ms Rumph in her email on 7 December 2021.

    Limited in that way, the evidence can go to Mr Nicol’s state of mind in conducting the proceeding on Brambles’ behalf.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Murphy.

Associate:

Dated:       1 September 2022