State Rail Authority of NSW v Earthline Constructions

[1998] HCATrans 82

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S8 of 1997

B e t w e e n -

STATE RAIL AUTHORITY OF NEW SOUTH WALES

Applicant

and

EARTHLINE CONSTRUCTIONS PTY LIMITED (IN LIQUIDATION)

First Respondent

NULINE CONSTRUCTIONS PTY LTD

Second Respondent

PHILLIP GEORGE DAVIES

Third Respondent

IAN NEIL DAVIES

Fourth Respondent

GREGORY CHARLES DAVIES

Fifth Respondent

TREVOR RAYMOND GREBER

Sixth Respondent

RONALD THOMAS CHILD

Seventh Respondent

DAVID BRIAN BELL

Eighth Respondent

OFFICIAL TRUSTEE IN BANKRUPTCY OF THE ESTATES OF PHILLIP GEORGE DAVIES AND IAN NEIL DAVIES

Ninth Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 MARCH 1998, AT 9.54 AM

Copyright in the High Court of Australia

__________________

MR R.V. GYLES, QC:    If your Honours please, I appear with my learned friend, MR A.S. MARTIN, for the applicant.  (instructed by Clayton Utz)

MR R.S. TONER, SC:   If your Honours please, I appear with my learned friend, MS E.C. KENNEDY, for the second to fifth respondents.  (instructed by Crichton Browne-Crossley)

GAUDRON J:   I have a certificate from the Deputy Registrar who certifies that he has been informed that the first and ninth respondents in the above matter do not wish to be represented at the hearing of this application and will submit to any order of the Court save as to costs.  That leaves an absence of appearance for the 6th and 7th respondents, one of whom has not been served.  Is that not correct, Mr Gyles?

MR GYLES:   Your Honour, could I just get instructions about that?

GAUDRON J:   And there has been no application for substituted service.

MR GYLES:   That is so, your Honour.  Your Honour, I had not myself adverted to this situation.  I gather, your Honour, or I am instructed the 6th respondent has never taken any active role in the proceedings.

GAUDRON J:   That does not matter, does it?  If orders are sought against a party, then there has to be service.  It does not matter whether they have taken any active part.

MR GYLES:   Your Honour, assuming that they were not parties below and bearing in mind ‑ ‑ ‑

GAUDRON J:   Why would I make that assumption?  They were certainly parties at first instance.  They have a verdict in their favour at first instance - we will consider just the 6th - and the purpose of this application is to disturb that verdict and there was no service and no application for an order for substituted service.

MR GYLES:   Your Honour, can I just clear one matter up.  I am instructed that the 7th and 8th respondents have been served.  So there is really the 6th that the problem focuses upon.  It is not a problem which had been drawn to my attention before your Honour raised it a few moments ago.  I wonder if your Honours would stand the matter down in the list so I can give that some consideration.

GAUDRON J:   I think all you can do is withdraw your application against that party, if you are not going to seek an order for substituted service.

MR GYLES:   Your Honour has touched on several things which I would like to consider with my instructing solicitor.

GAUDRON J:   We can stand it down in the list, but not indefinitely.  We will stand it down until 11 o’clock or later, as convenient.

MR GYLES:   Thank you, your Honour.

AT 9.59 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.13 AM:

GAUDRON J:   Yes, My Gyles.

MR GYLES:   Your Honours, the course which I am instructed to take is not to pursue this application in relation to the 6th respondent.

GAUDRON J:   Thank you.

MR GYLES:   Your Honours, from time to time the interests of the administration of justice require that the Court consider a judgment of an intermediate court of appeal which declined to grant an appeal even though, in considering the argument, essentially, questions of fact will be agitated.  A recent example is Krakowski v Eurolynx Properties.  Just, of course, as it is necessary from time to time to consider a judgment of an intermediate court of appeal when that court has granted an appeal on questions of fact, and Devries, of course, is a fairly current example.

The reason, of course, your Honours, is that the Court of Appeal has a duty to supervise fact finding at trial level within our system and, of course, within well known limits.  The carrying out of that duty is in turn to be supervised by this Court, hence section 35A(b) which is entitled to proper respect on these applications.  Of course, your Honours, there is no difference in principle between stepping in where the court below, the intermediate Court of Appeal, has declined to interfere compared with when they have interfered, although I grant it is usually easier to demonstrate the error when the Court of Appeal have interfered with the judgment below.

In the present case the fundamental error in principle in the Court of Appeal can be very quickly isolated and, if the leave were granted, very quickly determined by this Court without being involved in the morass of detail involving the documents ‑ ‑ ‑

GAUDRON J:   You say that, but assuming that the Court were with you thus far, nonetheless ordinarily there would be no grant of special leave unless it were clear that the result would be different.

MR GYLES:   Or, if we make our point, it is likely that the result would be different.

GAUDRON J:   Yes.

MR GYLES:   Your Honour, may I come to the end first ‑ ‑ ‑

GAUDRON J:   And that does, surely, involve going through this morass of evidence, as you say.

MR GYLES:   Only to a limited extent, your Honours, if I am right in the way I put it.  The fundamental problem in the case was the way in which the direct evidence of certain witnesses called by our side was dealt with.  Now, that does not decide the whole case, but if I could put it this way:  the case which was made was that there was a wholesale fraudulent invoicing of the SRA by a contractor in league with fraudulent employees of the SRA.  Now, a very important part of the plaintiff’s case was the calling of three employees of the contractor, one of whom gave direct evidence of a corrupt instruction and much more, but certainly of a corrupt instruction ‑ and your Honours do not have the benefit of that because it is not set out in the judgments and we have that here.  I will hand it up in a moment, but I want to just get the thread, if I can ‑ direct evidence of one of the principals giving her a corrupt instruction as to invoicing. 

The other two witnesses gave evidence of their own observations and instructions given to them and activities which they participated in and observed which are consistent with the case for the plaintiff; that is, a case of collusion between fraudulent employees of the SRA on the one hand and the fraudulent contractor on the other.  There was also, your Honours, direct evidence given of attempts by the principals, direct evidence, of attempts to suborn the witnesses in relation to the evidence that they were to give in the court.  Now, your Honours, that ‑ ‑ ‑

McHUGH J:   The trial judge put a gloss on that, did he not?

MR GYLES:   Gloss or not, your Honour, that is what the evidence was.  Now, that ‑ ‑ ‑

McHUGH J:   I have to say, Mr Gyles, that on the bare transcript, the trial judge’s reasoning is surprising.  It seems inherently unlikely that your principal witness is going to invent criminal offences that she is engaged in for no apparent purpose at all and, however bad her credibility or her problems may have been and her demeanour, nevertheless there did seem to be ‑ her story did seem to be inherently probable, having regard to other material and the exhibits that you rely on.  But that said, the trial judge saw her and he did not accept ‑ ‑ ‑

MR GYLES:   Let me grasp that nettle, your Honour, because that effectively - the court below said, you are knocking on a door that is not going to open for you because the trial judge has rejected on the basis of demeanour et cetera.  Your Honours, first of all, there was no cross‑examination of that witness to show animus against the relevant defendants.

McHUGH J:   Was she cross-examined on the issues themselves?

MR GYLES:   She was cross-examined on some of them and not all of them.

McHUGH J:   And there was no evidence called in denial of ‑ ‑ ‑

MR GYLES:   Your Honour, most importantly of all ‑ and really this is the rock on which I found my argument ‑ no evidence called to rebut the actual direct sworn evidence of a corrupt instruction, corrupt carrying it out, and an attempt to suborn the witnesses, all undenied.

GAUDRON J:   But I have a different problem.  Where is the evidence that the work was not done?

MR GYLES:   Your Honour, that is, if I may say so with respect, a question which would take a longer answer, and not one which the time on a special leave application would enable me to make good.

McHUGH J:   Am I right in thinking that you conceded the work was done but nevertheless hours were charged and ‑ ‑ ‑

MR GYLES:   Yes, the track was laid or whatever the task was, but ‑ ‑ ‑

McHUGH J:   Hours were charged for which were not worked.

MR GYLES:   Indeed, indeed.  It was just a grossly inflated claim, on our case.  And, your Honours, I think it is correct to say that ‑ ‑ ‑

GAUDRON J:   Was it a time contract or what sort of contract was it?

MR GYLES:   It was, in effect, a do and charge contract, your Honour.

GAUDRON J:   At an hourly rate or at a rate per mile, rate per kilometre?

MR GYLES:   It depended really upon the machinery being used at the time.  It was effectively an hourly rate for machinery, and particular types of machinery.  Now, your Honours, the absence of evidence in rebuttal leaves the way in which the case was dealt with in a most extraordinary fashion.  The trial judge said, all right ‑ and in answer to Justice Gaudron, the evidence of the three - I think it is conceded, with respect, by the trial judge and the Court of Appeal that if one were not able to put to one side the evidence of Mrs Page, and I might say the other two witnesses who seemed to be ignored, if their evidence cannot be put to one side, then there would be a case to answer, if I can put it that way.

Now, the process of reasoning of his Honour was this:  I consider, standing alone, the evidence of Mrs Page and I reject it because I consider her to be an unreliable evidence.

McHUGH J:   He did not say he rejected it in its entirety.  He said he rejected ‑ ‑ ‑

MR GYLES:   I think your Honour will find that that is what he did actually.

GAUDRON J:   He said he would place no reliance on it.

MR GYLES:   Yes, no reliance.  And effectively ignoring the other ladies, for various reasons, he then says, “We have really got a documentary case and I do not consider the documentary case to be established except as to a portion.”  Now, your Honours, we challenge that, but that is not the topic of this special leave application.  His Honour rejected, in other words, direct oral evidence of a witness implicating in a most direct way the defendants, without taking into account in that process the fact that the evidence was undenied.  Your Honours, I would venture to suggest, with respect, this is an unprecedented case.  There would never have been a case where a judge, in a civil case, not a criminal case but a civil case, would be entitled to reject a witness without having regard to whether the evidence was denied or not.  It is just unheard of.

GAUDRON J:   It can be done.

MR GYLES:   Anything can be done, your Honour.

GAUDRON J:   She was a witness for the onus-bearing party.

MR GYLES:   But, your Honour, it is a civil case.  It is a civil case.

GAUDRON J:   Yes.  There is still an onus in civil cases.

MR GYLES:   Of course, your Honour, but here we are dealing with whether or not the process by which the trial judge rejected her evidence without taking into account the fact that it was undenied is an appropriate method of decision making.

McHUGH J:   It was suggested that she had motive in that her employment had been terminated, was it not?

MR GYLES:   No.  There was no cross‑examination to that effect and no cross‑examination of - his Honour said, “I think she might have been worried about being implicated herself in these crimes.”  That was not put to her.

McHUGH J:   On that hypothesis, there was a crime.  On that hypothesis, if she was worried about it, there was a crime, because the crime was done at the instruction of ‑ ‑ ‑

MR GYLES:   Quite, quite, and your Honour, there was no cross‑examination to suggest she had any animus at all due to losing employment.  We simply have an extraordinary case of direct evidence being rejected without taking into account the countervailing evidence.  And with very great respect to their Honours in the Court of Appeal, that essential point is not referred to at all by the majority and is referred to only by Justice Handley in a way which, with respect, reveals an error of reasoning.  What his Honour does - and if your Honours perhaps go to pages 192 and 193 - could I hand up to your Honours extracts from the evidence of the three ladies and, for present purposes, your Honours should read paragraph 28 of Diane Page’s affidavit.  It is the second page of those which have been handed up.  Your Honours will see that is why you could not have a more direct corrupt instruction, one more directly related to the issues of the case.  I do not take your Honours through the balance of it because we would get into the argumentative area.

Can I then go back to 192 of the book, line 19, where his Honour says:

The evidence of Mrs Page and the other clerical employees of the contractors was certainly damming on its face, and much of it was not directly challenged in cross-examination.  The serious allegations of fraud she made against Mr Phillip Davies, and her evidence about his attempts to suborn her prior to the hearing before the Independent Commission Against Corruption, were not denied.  The contractors abandoned cross-claims for $537,358 rather than give evidence.

Now that, your Honours, is, I would venture to suggest ‑ ‑ ‑

GAUDRON J:   That is an inference only, surely.

MR GYLES:   I am taking it as it is, your Honour.  That is the judge who had not granted the appeal.  May I then take your Honours over to 193.  One would imagine that was leading into a judgment which said, you cannot, in those circumstances, reject the evidence of those parties without weighing up the fact that there was no denial.

McHUGH J:   It goes off on to another ‑ ‑ ‑

MR GYLES:   Then line 8 of the next page, there is reference to the invocation of Jones v Dunkel, the reference to our failures, and then his Honour says this, and this is the critical part:

There was evidence which was more than sufficient to excite the suspicion of the Court, but no prima facie case in relation to any other particular payments.  Moreover there was no prima facie case that the contractors had charged the Authority and been paid for more work than they had truly performed -

et cetera, et cetera.  Now, your Honours, the evidence of Page and the other two ladies, if accepted, would certainly have provided a strong prima facie case.  His Honour seems to be looking upon - when his Honour comes to 193, it appears that his Honour is considering a circumstantial rather than a direct case.

Now, in those circumstances, we submit that commonsense would indicate that we will not find any previous authority for the proposition that I am putting.

GAUDRON J:   Is there somewhere in these books where I can find the terms of the contract or contracts?

MR GYLES:   Your Honour, the best that you will get is Justice Handley giving some extracts, which really is not a reliable ‑ it is not exhaustive and it does not purport to be, your Honour, at page ‑ I do not think that even really goes that far, your Honour.  His Honour sets out certain parts of the regulations, so the answer to that is “No”.  But, your Honours, a similar ‑ ‑ ‑

GAUDRON J:   I should tell you, without that, I am still looking at lines 5 to 6 on page 193.  It seems to me that the only way that you could make out a case that there was a prima facie case, only if you can point to something in the contract which says it was not a work done contract.  I know you have said to me that it was not, it was a do and charge ‑ ‑ ‑

MR GYLES:   I do not know how I can deal with it, your Honour.  That was not - there was no issue about that, your Honour.  I mean, it was a contract which depended upon the provision of invoices or claims ‑ ‑ ‑

GAUDRON J:   Yes, but you have to prove that.  You had to prove that.

MR GYLES:   Of course, we did, your Honour.  We did.  There is no problem about that, your Honour.  The nature of the contract is not in dispute.

McHUGH J:   It is summarised at page 186, 187, is it not?

MR GYLES:   Your Honour, I must admit I had not come prepared to pick out - both in the trial judge’s judgment and in the reasons for the majority at 171 through to 173 there is a very bald summary of the situation, your Honours, and it is, I think - and my friend will be able to clarify this ‑ there is no debate but that the contractor had to present documents, dockets, in a particular form.  Page 172, your Honour, between lines 1 and perhaps halfway down the page, gives the best short summary of that situation.  Does your Honour see 172, from lines 1 to 21?

GAUDRON J:   Yes.

MR GYLES:   The only other thing I would draw attention to, before I resume my seat, is the ‑ ‑ ‑

GAUDRON J:   They keep talking about work done.  That is where ‑ ‑ ‑

MR GYLES:   Yes.  But the claim is that the invoices for which payment was made represented fictitious work, fictitious machines.

McHUGH J:   And your allegation was that exhibit AA contained details of the fictitious claims with all except a couple of exceptions.

MR GYLES:   Correct.

McHUGH J:   What, were there 4,215 transactions or something?

MR GYLES:   There were a large number, your Honour.  Your Honours, the closest one ‑ ‑ ‑

GAUDRON J:   Did Mrs Page’s evidence go to each one?

MR GYLES:   She went to each of AA, I think, your Honour, each of AA’s....by page. 

McHUGH J:   And in the evidence that you have handed up she was told just to keep writing, filling out these dummy documents.

MR GYLES:   Dummy machines, yes.  Your Honours, could I hand up extracts from ‑ ‑ ‑

GAUDRON J:   Was there independent evidence that they were dummy machines?

MR GYLES:   She, your Honour, was told by the contracting principal that they were dummies and she was working for him. 

McHUGH J:   I think the judge did accept that the documents were - blank documents were signed.

MR GYLES:   We had a verdict in relation to some of the claims.

McHUGH J:   Yes.

MR GYLES:   Your Honours, could I hand up extracts from Voulis v Kozary.  I just want to read a short passage from Mr Justice Jacobs.  This is one of those cases where the High Court stepped in in a factual situation against a concurrent finding of fact.  His Honour said at 194, and I am looking, your Honours, at point 6 of the page, after the reference to Mr Justice Hutley:

Failure to refute an adverse claim in circumstances where it may be expected to be refuted is of the strongest evidentiary weight and it cannot be said that a conclusion on probabilities was or could be reached independently of such an important aspect, however the matter may be expressed in reasons for judgment.  A conclusion on the acceptability of evidence as to, and the probability of, a fact in issue is not divisible in this way.

And that, your Honours, reflects of course not only what lies behind Jones v Dunkel but the basic evidentiary proposition that has been referred to in this Court on many occasions, going back to Lord Mansfield, that all evidence is

to be weighed according to the proof which it was in the power of one side to have produced and, in the other, in the power of the other to have contradicted.

GAUDRON J:   Yes, Mr Toner.

MR TONER:   The State Rail Authority had to prove its case and to simply rely on the affidavit material that it produced in‑chief is not enough.  You have to look at the totality of her evidence and what happened in the end is that Mrs Page did not survive cross-examination.  What was being asserted by the State Rail Authority was that there was a vast amount of work that had not been done.

GAUDRON J:   Now, can you explain that to me. 

MR TONER:   We say it had been done.

GAUDRON J:   Tell me what you say the work was that had to be done.

MR TONER:   The State Rail Authority would hire particular machines from the first respondent and this was done broadly on an ad hoc basis to perform particular tasks.  Prior to that occurring, there was a standing tender, so to speak, where rates of hire had been provided by the contractor ‑ ‑ ‑

GAUDRON J:   These were hourly rates of hire?

MR TONER:   Hourly rates for particular pieces of machinery.  As and when ‑ ‑ ‑

GAUDRON J:   So all SRA had to prove was that some hours had not been worked?

MR TONER:   That is right, or by that particular machine, and from first to last, the SRA ‑ ‑ ‑

GAUDRON J:   Why do you say “or by that particular machine”?

MR TONER:   There was a variety of different sorts of machinery.  So there were trucks ‑ ‑ ‑

McHUGH J:   Different rates.

GAUDRON J:   Different rates, yes.

MR TONER:   And the rates varied of course.  So that from first to last the State Rail Authority’s case was that there was a substantial fraudulent arrangement whereby claims were made for work not done.

GAUDRON J:   For hours not worked.

MR TONER:   It is like one and the same thing.

GAUDRON J:   It may be, but I think there may have been confusion in the Court of Appeal.

MR TONER:   Can I.....from first to last the assertion made by the State Rail Authority at first instance was that this work was simply not done.  In one instance, there was said to be six machines working for a constant period of six or eight weeks, or eight machines working constantly for a period of six weeks on a particular site, 12 hours a day, and yet there was no attempt made by the State Rail Authority at all at trial to attempt to demonstrate that this work in fact was not done.  They simply relied upon Mrs Page and the documents to demonstrate that somehow fraudulent claims had been made on the State Rail Authority without trying to corroborate in any other say, save for a comparison between Mrs Page’s evidence and the documentation.

What they then did was go through machine and machine in her affidavit and suggest, well, this proves that the work was not done.  However, she is then cross‑examined in relation to particular machines.  An example of that cross‑examination and how her evidence failed is contained in the judgment of Mr Justice Handley at page 191 where he simply repeats, line 14, what was asserted by Mrs Page to demonstrate the fraud in relation to a particular machine by saying that Mr P. Dare on these dockets - Mr P. Dare was said to be the operator - that he:

did not operate any of the machines referred to therein and that the machines were not in operation on those particular sites specified in the dockets.

In other words, a claim had been made for work that had not been done.  That had to, of course, be the basis of the State Rail Authority’s claim, namely that we had not done the work and they had paid us for work that had not been done.  She was then asked, in relation to that particular transaction, in relation to the documents that supported it, she was taken to the particular dockets and asked this:

Q.  Once again this was a real machine, is that right?
A.  Yes.
Q.  And it really worked at the Borderloop?
A.  Yes.
Q.  And it really worked at the Borderloop at the times described on the invoices which form exhibit DMP23; is that right?
A.  Yes.
Q.  What is wrong about it is that Mr Dare was not the operator of that truck.  Is that right?
A.  He would have occasionally.
Q.  But he was not the operator of the truck on each occasion where work is described on those dockets; is that right?
A.  Not this amount of time driving the truck no.

So, in other words, on one hand, the State Rail Authority is asserting this work was never done.  Mrs Page is confronted with that proposition and she says, positively, that this work in fact was done and it was done in terms of the information contained on the day docket.  The only thing that is wrong about it is that Mr Dare was not the operator of the truck.

Now, that is nominated by his Honour as an example of what happened to Mrs Page during the course of an extensive cross‑examination which went over about eight days, in terms of a huge volume of material.  So it was when confronted with, effectively, a movement of 180 degrees in her assertion, on a significant ‑ ‑ ‑

GAUDRON J:   For all matters?

MR TONER:   No, not every single matter, but on a large number of matters ‑ ‑ ‑

GAUDRON J:   What about the dummy trucks or the dummy machines?

MR TONER:   This is one of them.

GAUDRON J:   No.

MR TONER:   I think it is, your Honour.  You have to view it in the context of the whole of this affidavit.  It was a very extensive affidavit.  I think this may have been one of the dummy trucks.  I am not absolutely certain about that, but there was similar evidence in relation to the so-called dummy trucks.  This is but one example of the demise of Mrs Page in cross‑examination.

So that what his Honour was left with was an aggregation of denial of her affidavit in the course of Mrs Page’s cross‑examination.  He had the opportunity of observing her give evidence and it does not, of course, require that she is caught out on every single piece of her evidence before he is entitled to form a conclusion based upon what he sees and what he hears and what she asserts, that he is entitled to reject her evidence at that point.  It does not have to be every single thing that is put to her before he can reach that conclusion, that her evidence is unreliable.

McHUGH J:   Yes, but even if you come to the view that her evidence may be unreliable in respect of certain aspects of it, it does not mean the whole of it is unreliable and in weighing up the plaintiff’s case you have to look at all the other evidence.  What about the other witnesses?  What about the failure to call any evidence?  What about the fact that it is inherently unlikely that anybody is going to invent against somebody a story that they were induced to commit criminal offences to the benefit of your ‑ ‑ ‑

MR TONER:   I understand that proposition, your Honour, but that is precisely what his Honour was confronted with.  In other words, Mrs Page is asserting that a particular machine did not exist, that the work was not done, and that the document provided to the State Rail Authority is entirely fictional, and yet, as an example and by way of example only, when the material is specifically put to her, she moves 180 degrees; in other words, the work was done, it was a real vehicle, it really did the work at the particular site on that ‑ ‑ ‑

McHUGH J:   She does not say the work was done, does she?  She says he would have done it some of the time.

MR TONER:   No, no.  If you look at 191, line 24:

Q.  Once again this was a real machine, is that right?
A.  Yes.
.....
Q.  And it really worked at the Borderloop at the times described on the invoices which form exhibit DMP23; is that right?
A.  Yes.

What is wrong about it is it has the wrong operator’s name.

GAUDRON J:   For some of the times.

MR TONER:   Some of the times, but at the end of the day his Honour also found ‑ ‑ ‑

McHUGH J:   But she said - her affidavit evidence is set out at line 13 and she said:

I inserted the signature of P Dare on these dockets I was aware that P Dare did not operate any of the machines referred to therein and the machines were not in operation on those particular sites specified in the dockets”.

That is a generality.  It is modified in cross-examination.  She says it does not contradict her allegation that she inserted the signature falsely.

MR TONER:   No, it does not do that.  What it does do is move from the proposition that this machine did not exist and did not work to her saying that the machine really existed and really did work and that the contractor was entitled to be paid for it because, at the end of the day, the SRA’s case must be that they were not obliged to pay these dockets because the work did not happen.  The SRA never attempted to demonstrate that the work did not happen, other than through Mrs Page.  If one looks at this as an example of that assertion, one could hardly conclude ‑ ‑ ‑

McHUGH J:   Did they not go beyond that, Mr Toner?  Was there not some evidence which indicated that some machines could not have been in two places at the one time?

MR TONER:   Quite, and the plaintiff succeeded on the duplication point.  They got a verdict for that.

McHUGH J:   Yes, but you add that evidence then to other evidence, and one wonders to what extent the trial judge was justified in making the emphatic statement that he made about her evidence.

MR TONER:   Because one has to look at the whole of the evidence against her, not merely extracts that are plucked from her affidavit, which are prepared in the calm moments of an attorney’s office, no doubt, to what happened to her during the course of cross-examination.  Fundamentally, she was destroyed.  Her evidence just could not stand up and could not bear scrutiny without close corroboration and the documents themselves did not tend to corroborate her.  All they simply did was to corroborate one aspect of her evidence, namely that the signature or the name of the operator on the docket was false, which his Honour held was not an obligation that was required by the State Rail Authority in its procedures, in any event.

McHUGH J:   What about those aspects of her evidence that she was not cross-examined on and yet the plaintiff did not recover a verdict in respect of?

MR TONER:   There were a number of areas where she was not cross‑examined but, at the end of the day, there was enough put to her which demonstrated the proposition that she could not be relied upon upon her oath, for his Honour to set aside her evidence as he did.  I think it is conceded that her evidence was pivotal to the case.  Without her, the State Rail Authority did not get to a prima facie case.  Once his Honour formed that conclusion, as he was entitled to do and as he has carefully described in the course of his judgment and has been carefully observed about what he said about her in the judgments of the Court of Appeal, his Honour was entitled to make that finding, as he did.

GAUDRON J:   That really is the crux, is it not, of the case, namely whether some aspects of the evidence having been discredited, you can reject other parts of the evidence that have not been discredited in that way?

MR TONER:   Or alternatively, where she had not made a concession in the course - she might have been cross‑examined about a particular topic but had not made a similar concession.  See, it cannot possibly be the case, your Honours, that you have to destroy a witness in cross‑examination on every single aspect of her evidence ‑ ‑ ‑

McHUGH J:   It helps when the allegation is extremely serious and the defendant is not prepared to deny it, and particularly when the defendant is the person who is in possession of all the relevant information, as Lord Mansfield said.

MR TONER:   With respect, though, your Honour, this is not to turn the onus on its head.  One would have thought that the onus here is borne by the State Rail Authority with the Briginshaw admonition in place because what they are asserting, of course, is conspiracy to cheat and defraud.  So it is squarely a Briginshaw case.  And his Honour bore that in mind, too, when assessing the evidence of Mrs Page and determining whether he was entitled to accept it, when it was so flawed, as far as he was concerned, that he was not prepared to accept it for the purpose of demonstrating the SRA’s case where it was alleging a very serious criminal conspiracy.

So that one has to remember that that was what was being asserted from first to last by the State Rail Authority, that there was a criminal fraud in place to deprive it of large sums of money.  That was the way it was put.  That was the way the evidence was led.  And his Honour assessed her evidence in the light of Briginshaw, as he was obliged to do.

McHUGH J:   What about the other witnesses?

MR TONER:   Neither of those visited any site.  All that can be said about them was that they completed work dockets.  It was never attempted to be asserted that that work was not done.  They never sought to prove that that work in fact had not been done.  All they could demonstrate was a clerical process which may have been slap dash and may have had its faults, but there was never any attempt to demonstrate that this work in fact was not done.  That was the State Rail Authority’s case.  They paid money for work that was not done and never sought to prove it; never sought to prove that it was not done.  What they did prove ‑ ‑ ‑

GAUDRON J:   If, to the extent that Mrs Page’s evidence was either that there were dummy machines or that the work was not done for the hours claimed, there is evidence of it.

MR TONER:   There is the assertion of it in her affidavit.

GAUDRON J:   Well, that is evidence.

MR TONER:   Of course, but her evidence has to be viewed in its totality, including its cross‑examination.  So how could his Honour ‑ ‑ ‑

GAUDRON J:   And its lack thereof.

MR TONER:   Yes, quite, but how could his Honour sensibly conclude, in relation to the piece of cross‑examination and evidence in‑chief that is described on page 191 of the application book, how could he have possibly concluded on the balance of probabilities, with a Briginshaw admonition, that in fact the work that was done as described in the day dockets in exhibit 23 was in fact not done? How could he do that?

McHUGH J:   One could understand it, if there had been a sophisticated attempt to segregate the various evidence and one dealt with it.  But what we had here was just a blanket plague on all your evidence.

MR TONER:   No, your Honour.  The affidavit of Mrs Page extended beyond the very slim extract you have there.  It went and dealt with every machine ‑ ‑ ‑

McHUGH J:   No, no, but what I am saying is the judge rejected her evidence out of hand.

MR TONER:   Eventually he did, but he did not do it whimsically.  He did it after close scrutiny of the woman giving her evidence and in the context of the cross‑examination.

GAUDRON J:   But a close scrutiny of the evidence in fact given.

MR TONER:   Yes, indeed.  So eventually concluded ‑ ‑ ‑

GAUDRON J:   Can you take us to that in his Honour’s judgment.

MR TONER:   At first instance, your Honour?

GAUDRON J:   Yes.  And certainly it was not done in the Court of Appeal, was it?

MR TONER:   I think that the Court of Appeal reached a conclusion that they were not going to disturb the trial judge’s findings in relation to the credit of Mrs Page, and did not deal with it at great length, but they certainly ‑ Mr Justice Mahoney certainly turned his mind to it at some length in dealing with what the findings of the trial judge had been.  For instance, if one goes to what Mr Justice Mahoney had to say, application book page 174 onwards, from about line 19, where he deals at some length with the submissions that had been made to the court in respect of the findings of the trial judge about Mrs Page.  The trial judge dealt with Mrs Page’s evidence between application book page 45 and, I think, 52, and he summarises what he had to say about her on page 45 and fully confronted what the first impression must have been, was to him, of the affidavit.  At line 18 he says:

Whilst the material included in her affidavit gives the appearance of being quite unequivocal, this appearance did not survive her cross‑examination.  I do not accept significant parts of her evidence.  It was internally inconsistent in a number of respects.  She was argumentative at times, evasive at others.  She did not present well in the witness box.  On a number of occasions I formed the view that the evidence she gave was made up on the spot to get her out of what she perceived to be a problem.  Frequently she paused for periods, some of which were extended, and appeared to be casting around for an answer which she regarded as suitable rather than addressing the question directly. 

GAUDRON J:   Yes; but I am asking where does he examine the substance of her evidence?

MR TONER:   I am sorry, it is between those two pages, I think, your Honour, where he ‑ ‑ ‑

GAUDRON J:   That is general matter as to credibility.  It is not a detailed analysis of the evidence that she in fact gave.

MR TONER:   Quite.  Then finally it goes over the page.  He deals with it item by item essentially.  For instance, on page 47 and onwards, each of these matters is dealt with seriatim, so that our case is that this is a fairly mundane example in full conformity with what this Court said in Devries, that the Court is going to make a ghastly rod for its back when it starts going behind findings as to credibility ‑ ‑ ‑

GAUDRON J:   One is well aware of that.

McHUGH J:   You do not have to press that point on us.  We are well and truly aware.

MR TONER:   Quite.  And this is a first class example of it, where what his Honour has found in relation to her gave him a proper basis ‑ ‑ ‑

GAUDRON J:   Yes, but really, the question at the end of the day seems really to be should the trial judge, in the circumstances, have examined the substance of her evidence and the further question then arises, could the Court of Appeal have dismissed the appeal itself without its having some sort of analysis of the substance of her evidence.

MR TONER:   There was an analysis.  It was before the Court of Appeal for three days with fairly close argument before that court sort of line by line as to the evidence which was led before ‑ ‑ ‑

GAUDRON J:   Yes, I dare say there was, but the judgments do not reflect it, do they?

MR TONER:   Except this, Mr Justice Mahoney reflected that proposition, with appropriate apologies to counsel, as to why they were not going to take the approach of a close analysis line by line of the judge’s findings which supported what the judges described as to the reasons why he rejected Mrs Page’s evidence as he was entitled to do.  See, because the Court of Appeal was in a similar position to this Court on the basis that they are bound by Devries as well and their want of opportunity to see Mrs Page in the witness box is precisely the same as the problem here.  So they are not going to undertake an examination of the material if they are content with the way in which the judge has determined the question as being within the boundaries of what was available to them.

McHUGH J:   I must say I could not help but feel, in reading the Court of Appeal judgments, that they started with the wrong premise.  After all, it is a rehearing and one is obliged to look at the whole of the evidence and in looking at the whole of the evidence one is entitled to take into account the view of the trial judge as to the credibility.  My impression was, and I may be quite wrong about this, that they started the wrong way around.  They started with her and the finding about her credibility and they said, “She’s

gone.  So that is the end of the case.”  Instead of doing what they should have done, is to look at the whole of the evidence themselves.

MR TONER:   Except for this, that the determination of the trial judge as to whether he was going to accept Mrs Page or not was viewed in the totality of the evidence before him.  There is no suggestion ‑ ‑ ‑

GAUDRON J:   It was not just he did not accept her on particular matters, he placed no reliance on her evidence.

MR TONER:   In the end.  In the end because - that is not simply because he did not accept her on a particular point - he said that her evidence, because of the way that she failed in cross‑examination, was impossible to accept.  That is what he is really saying.  So, in other words, if somebody’s credit and credibility in terms of their evidence is so unreliable, the trial judge is entitled to say, well, I cannot rely on her evidence to draw any conclusion.   Now, it may well be that a trial judge can say, I accept that part of a person’s evidence but not that part, but the trial judge is also entitled to say, “I don’t accept her for numerous reasons; therefore I reject her evidence.”  Thank your Honours.

GAUDRON J:   Thank you.

Mr Gyles, there will be a grant of special leave in this case but, first, it will be limited to the ground that you have advanced today.  Your original application was somewhat more ambitious than your argument today.

MR GYLES:   That is true, your Honour.

GAUDRON J:   Secondly, it will be necessary for you, before the hearing, to make some systematic effort to indicate what evidence was not tested, was not the subject of cross-examination or other evidence and to indicate how it bears on the claim.  Presumably you will do your best in that regard to ensure that the time of the Court is not taken up in the way it was in the Court of Appeal.

MR GYLES:   If your Honours please.

AT 11.57 AM THE MATTER WAS CONCLUDED