Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd

[2008] NSWSC 654

CITATION:	Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2008] NSWSC 654
HEARING DATE(S):	16/06/08, 17/06/08, 18/06.08, 19/06/08, 20/06/08, 23/06/08, 24/06/08, 25/06/08, 26/6/08
JUDGMENT DATE :	26 June 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	Documents at Tab 698 and Tab 701 rejected. All other documents admitted without s 136(a) limitation on use
CATCHWORDS:	EVIDENCE - admissibility - tender of documents containing statements of or attributed to second plaintiff - business records - second plaintiff does not intend to give evidence - inability to cross examine - whether use should be limited to proof of words spoken - whether certain business records prepared in contemplation of legal proceedings
LEGISLATION CITED:	Evidence Act 1995, ss 48(1)(b), 59, 60, 69(1), 69(2), 69(3), 128, 135, 136(a)
CATEGORY:	Procedural and other rulings
CASES CITED:	Bakerland Pty Ltd v Coleridge [2002] NSWCA 30 Compafina Bank v Australia and New Zealand Banking Group Ltd [1982] 1 NSWLR 409 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 222 Papakosmas v The Queen [1999] HCA 37; (1999) 196 CLR 297 R v BD (1997) 94 A Crim R 131 Seven Network Ltd v News Ltd (No 8) [2005] FCA 1348; (2005) 224 ALR 317
PARTIES:	Tim Barr Pty Limited - First Plaintiff Timothy James Barr - Second Plaintiff Narui Gold Coast Pty Limited - Defendant
FILE NUMBER(S):	SC 2762/02
COUNSEL:	Mr R G McHugh SC/Mr J E Lazarus - Plaintiffs Mr M L D Einfeld QC/Mr R E Dubler SC/Mr A C Harding - Defendant
SOLICITORS:	Corrs Chambers Westgarth - Plaintiffs Verekers - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

THURSDAY, 26 JUNE 2008

2762/02 TIM BARR PTY LIMITED & ANOR v NARUI GOLD COAST PTY LIMITED

JUDGMENT

1 I am dealing with objections to further documents sought to be tendered by the plaintiffs.

2 The objections have been argued by reference to categories of documents, but it will be necessary, in some instances, to refer to particular documents. The classes or categories to which I am about to refer are delineated in a document I have placed in the court file headed “Defendant’s objections to plaintiffs’ tenders argued 25 June 2008 and decided 26 June 2008 with defendant’s revised statement of grounds of objection”.

3 The first category of documents consists of reports made from time to time by Mr Barr, one of the plaintiffs, to the defendant and its parent company (Narui Norin) or Narui officers (particularly Shigeo Narui) about matters related to the Cudgen Paddock and the defendant’s Kings Forest land more generally.

4 The defendant does not contend that these documents are inadmissible. It accepts that, while the representations in the reports are hearsay, the documents are business records within s 69(1) of the Evidence Act 1995 and that s 69(2) displaces the operation that the hearsay rule would otherwise have.

5 The defendant submits, however, that the court should limit the use to be made of that evidence so that the documents may be used to prove that the statements in them were made but not to prove the truth of those statements (except where a particular representation is against Mr Barr’s interest).

6 That submission proceeds solely on the basis of s 136(a) of the Evidence Act. It is pertinent to quote s 136 as a whole:

“The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might:
(a) be unfairly prejudicial to a party, or
(b) be misleading or confusing.”

7 It is thus clear that, if it is to impose the limitation the defendant now seeks under s 136(a), the court must find that there is a “danger” that use of the content of Mr Barr’s report as evidence of the truth of his statements therein (except where the statements are against interest) “might” be “unfairly prejudicial to” the defendant.

8 It is, I think, significant that the court is not called upon to decide whether or not the particular use of the evidence will be unfairly prejudicial to the particular party – merely whether or not there is a “danger” that the use “might” be unfairly prejudicial to the party.

9 Mr Einfeld QC, in advancing the defendant’s submissions, referred to two matters in support of the proposition that the court should be satisfied as to the existence of relevant danger in this case. The first is that statements in certain of the reports are obviously false. There are, for example, statements that development approval had been granted when other documentary evidence shows clearly that no development approval had been granted.

10 The second matter relied on by the defendant is that Mr Barr – the author of the reports and one of the plaintiffs (as well as the principal of the other plaintiff, Tim Barr Pty Ltd – or “TBPL”) – has elected not to give evidence. No affidavit of his has been read in the plaintiffs’ case and the defendant will have no opportunity to cross-examine him and thereby to test him on the statements made by him in the reports.

11 The first of these matters may be dealt with briefly. The fact that the reports contain representations quite at odds with what appears to be clear evidence to the contrary is not, in my opinion, productive of a danger that the use of the representations in an attempt to prove the truth of the matters represented will be unfairly prejudicial to the defendant. The competing indications will have to be considered together and, on the hypothesis stated, the stronger indications emerging from the clear contrary evidence may be expected to prevail. Mr Barr’s failure to give evidence is something that will be taken into account in the process of evaluating his statements and weighing them against other evidence. His reason for not giving evidence (something to which I shall come) will enter into that process.

12 The inability of the defendant to test Mr Barr by cross-examination stands in a different light. That has at least the potential to be productive of a danger of the kind to which s 136 refers.

13 It was submitted by Mr McHugh SC on behalf of the plaintiffs that, in considering this matter, it is pertinent to consider influences upon Mr Barr which may be taken to have activated his decision not to give evidence.

14 Mr Barr was arraigned in the District Court in October 2005 upon an indictment containing nine counts arising out of events forming part of (or, in one case, occurring after) the series of events with which the present proceedings are concerned. He pleaded guilty to one charge (that involving subsequent events) and was required to enter into a bond to be of good behaviour, apparently without being convicted. In relation to the eight other charges, there was a plea of not guilty and the District Court was later informed that the Deputy Director of Public Prosecutions had directed that there be no further proceedings in relation to the indictment containing the eight counts, whereupon the District Court discharged him. It is suggested that the discharge related to his bail. At all events, Mr Barr has been advised that he is susceptible to future prosecution for the alleged offences which the Crown elected in 2005 not to pursue.

15 It was submitted on behalf of Mr Barr that, in these circumstances, his decision not to give evidence in these proceedings is understandable and rational and should not, as it were, be held against him. The submission made on behalf of the defendant, however, is that fear that cross-examination in these present proceedings might cause Mr Barr to give self-incriminating evidence is not a real or genuine fear. Given the structure and effect of s 128 of the Evidence Act, he could not be compelled to give evidence that may tend to prove that he committed an offence. Furthermore, if he elected to give such evidence, it would be under the protection of a certificate given under s 128 so that, by operation of

s 128(7), the evidence could not be used against him in the criminal proceedings that it is feared may be re-activated.

16 It was submitted on behalf of Mr Barr in response to this that, even if he had the benefit of a s 128 certificate given in these proceedings, there would be no obstacle to evidence he gave here being used by prosecution authorities to enhance material already held by them so that, for example, they might embark on new lines of inquiry or otherwise pursue courses not previously considered. That of itself might be considered a prejudice or danger to Mr Barr, even if evidence adduced from him under the protection of a s 128 certificate could not be tendered in any reactivated or new criminal proceedings.

17 Although these matters were canvassed before me, I must say that I do not consider them to be of any great relevance to the question posed by s 136(a). Mr Barr, for whatever reason, will not be giving evidence in these proceedings. I am aware of suggestions in the decided cases that the reasons why a person does not give evidence so as to be susceptible to cross examination can be relevant to the exercise of the s 136(a) discretion. For my own part, I doubt that the reason matters. The thing to be taken into account in deciding whether a danger of the s 136(a) kind exists is the fact of the person’s unavailability to be cross-examined, not the reason for the unavailability. The approach to the s 136(a) issue would be the same, in my view, if, in the present case, the reason for Mr Barr’s failure to give evidence was some disabling illness. The reason may, of course, be very relevant to quite separate decisions about the weight to be given to statements in his documents – and inferences to be drawn from his failure to testify.

18 I was taken to statements in decided cases about the significance of inability to cross-examine in the s 136 context, that being, as I have said, the real question for consideration in the s 136(a) context. One point made – for example, by Sackville J in Seven Network Ltd v News Ltd (No 8) [2005] FCA 1348; (2005) 224 ALR 317 – is that the s 136 discretion is to be exercised in the context of the Evidence Act as a whole, including s 60. That section provides, in effect, that hearsay evidence that is made admissible by the Act (for example, through the business records exception) is admissible for all purposes. Any exercise of the s 136(a) discretion of the kind now sought cuts across that policy. It follows that the court should, before exercising the discretion, be satisfied that there is a good and substantial reason to depart from the policy.

19 The same message had already emerged clearly from the decision of the High Court in Papakosmas v The Queen [1999] HCA 37; (1999) 196 CLR 297. There was emphasis there on the need to exercise discretions conferred by provisions such as ss 135 and 136 so as not to subvert the policy of the legislation.

20 Inability to cross-examine on representations of a person contained in a document does not necessarily make the evidence in the document unfairly prejudicial. I agree, in that respect with what Einstein J said in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 222 at [46]. At the same time, the Court of Appeal has observed that that matter is one that can be relevant to a decision on the question whether a s 136(a) danger exists: see, for example, Bakerland Pty Ltd v Coleridge [2002] NSWCA 30 at [55].

21 The real issue, it seems to me, is that identified by McHugh J in Papakosmas v The Queen (above) at [91], that is, whether there will, in the words of Hunt CJ at CL in R v BD (1997) 94 A Crim R 131 at 139, be a danger of prejudice “because there is a real risk that the evidence will be misused by the jury in an unfair way”. In the present context of trial by judge alone, the question will be whether absence of cross-examination and of the consequent lack of opportunity to test and challenge entails a real risk that a process of fact finding unfair to the defendant will result – or, putting it another way, that the finder of fact will make a decision otherwise than on a basis logically connected with the issues in the case.

22 Having regard to the body of documentary evidence to which I have already been taken in some detail, I am of the opinion that no such risk is likely to arise here or, more precisely, that such risk as there is not sufficient to warrant a departure from the clear policy of the legislation. The other documentary evidence contains, in large measure, statements by or attributed to professional consultants, government and local government authorities and officers and other unrelated business people whose accounts might, in the ordinary course, be expected to be reliable unless shown otherwise. That evidence, supplemented by the affidavit and oral testimony of such persons, seems to me to provide a reasonable basis for testing the matters emerging from Mr Barr’s representations.

23 In short, I am not satisfied that the absence of an opportunity to cross examine Mr Barr is the source of a danger of the kind with which s 136(a) is concerned, so far as Mr Barr’s reports are concerned.

24 I pass now to the second class of documents sought to be tendered by the plaintiffs and the subject of submissions by the defendant. Again, the defendant accepts that the documents are admissible but contends that, pursuant to s 136(a), the use to which they are put should be limited in the way already mentioned in relation to documents in the first class. The particular documents are faxes and letters authored by Mr Barr and sent to various people involved in the events with which these proceedings are concerned.

25 The documents of the second class contain statements of the same kind as has been mentioned in relation to Mr Barr’s reports, that is statements by Mr Barr as to things that have been said or done by him and others – often statements glaringly at odds with inferences strongly suggested by other elements of the documentary evidence.

26 For the reasons I have expressed in relation to Mr Barr’s reports (the first class of documents with which I have dealt), I am of the opinion that inability to cross examine on documents in the second class is not productive of a s 136(a) danger.

27 The third class of documents raises additional considerations and it is necessary to deal with the documents individually.

28 The document at Tab 155 of the proposed tender bundle is a statutory declaration made by Mr Barr on 19 March 1999 which, as appears from a letter of Mr Sippel dated 22 March 1999 at Tab 156, was sent by Mr Sippel to Tweed Shire Council as part of a submission made by Mr Sippel on behalf of the defendant that existing use rights or continuing use rights attached to relevant land of the defendant. The position the defendant takes in relation to the statutory declaration is that it is not a business record within s 69(1), with the result that the hearsay material in it does not have the benefit of s 69(2) and is excluded by the hearsay rule in s 59.

29 I am of the opinion that the statutory declaration is a business record. It was created by Mr Barr, who was then, through a corporate vehicle, a consultant to the defendant, to support a submission to be made on the defendant’s behalf by another of its consultants (Mr Sippel) to advance the commercial interests of the defendant in establishing certain rights of user in respect of its land. The original of the statutory declaration and the original of Mr Sippel’s letter no doubt went to the Council. But copies must have been kept in the defendant’s records. I infer that these are those copies. The copies are clearly within s 69(1)(a). In addition, the fact that the content of the statutory declaration was made for the purpose I have stated means that s 69(1)(b) is satisfied. The objection based on inapplicability of s 69(2) fails.

30 The defendant next says in relation to the statutory declaration (Tab 155) that, in terms of s 135, the probative value of its content is substantially outweighed by the danger that it might be unfairly prejudicial to the defendant. I am not satisfied that this is so, given that inability to cross examine is the suggested source of potential prejudice. There will be a body of evidence that not only counters many suggestions made by Mr Barr but also puts the court in a position to draw conclusions about the reliability of his contemporary statements in general. There is the added point that some of the events referred to by Mr Barr supposedly happened before he was born. The danger of the possibility of unfair prejudice does not outweigh the probative value of the statements.

31 Finally, in relation to the statutory declaration at Tab 155, the submission based on s 136 made in relation to the earlier documents is repeated. For the reasons I have given in relation to the other documents, there should be no limitation under that section.

32 I deal next (within the third class) with the documents at Tabs 661 and 672 of the proposed tender bundle, being a letter of 1 March 2002 and a letter of 12 March 2002, both from Mr Barr to Mr Ell of Leda Holdings. The submission here is, first, that the court should refuse to admit under s 135 and, in the alternative, that there should be a limitation under s 136 in the same terms as sought in relation to the earlier documents.

33 There was discussion, in relation to these two documents, of the question whether a business record exists when a piece of paper is fed into a sending fax machine and another piece of paper bearing identical images emerges from a receiving fax machine. That question does not need to be considered at this point. The submission is only that there should be a s 135 exclusion or, failing that, a s 136(a) limitation.

34 As previously, inability to cross examine is the basis for the submission. The considerations already discussed indicate that neither form of relief should be granted.

35 The next document to be considered is that at Tab 698, a fax sent by Mr Barr to Mr van Rij of Leda Holdings and dated 7 May 2002. That fax contains representations by Mr Barr about existing use or continuing use rights in respect of relevant land and says that a development application was lodged only “to calm the peace” with a councillor; also recorded is something Mr Brinsmead of Hickeys had said to Mr Hart, a consultant to the defendant at the time. The defendant says, first, that this is not a business record; second, that if it is a business record it is excluded by s 69(3); third, that if is otherwise admissible, it should be excluded under s 135; and, fourth, that there should be, in any event, a limitation under s 136.

36 As to the question whether the fax is a business record, there is reliance on the difference, just mentioned, between the sheet fed into the sending fax machine and the sheet produced by the receiving fax machine. Mr Einfeld made reference, in this connection, to the decision of Hunt J in Compafina Bank v Australia and New Zealand Banking Group Ltd [1982] 1 NSWLR 409. That, however, predated the Evidence Act and I am of the opinion that the analysis indicated by the legislation is that put forward by Mr McHugh – in substance, that a combination of the temporal specification in s 69(1)(a)(ii), the ability created by s 48(1)(b) to resort to a copy or reproduction to prove the content of a document and common knowledge about the workings of fax machines means that the document retained at the sender’s end is a business record of the commercial recipient, even if its retention in the sender’s file does not warrant its being regarded as a business record of the sender.

37 I am satisfied that the Tab 698 document is a business record within s 69.

38 As to exclusion of the Tab 698 document under s 69(3), some matters of context must be mentioned. Leda had entered into an arrangement with TBPL for the acquisition or potential acquisition of land. Four days before the date of the Tab 698 letter, the defendant had purported to terminate the lease held by TBPL in respect of the land (TBPL’s option to purchase from the defendant was contained in the lease). Three days after the date of the letter, solicitors for TBPL wrote to solicitors for the defendant foreshadowing legal action.

39 The submission made on behalf of the defendant is that the Tab 698 letter was, in the sense relevant to s 69(3), written in contemplation of the litigation foreshadowed by the letter sent by TBPL’s solicitors to the defendant’s solicitors three days later.

40 I am of the opinion that the Tab 698 letter is excluded by s 69(3) from the beneficial operation of s 69(2). The letter sent by TBPL’s solicitors only three days later shows that the distinct possibility of resorting to litigation over the purported termination of the lease must have been in the mind of Mr Barr and therefore in the contemplation of TBPL when the Tab 698 letter was written. Circumstances when the letter was composed and sent were therefore such that the potentially distorting influences against which s 69(3) is directed were already at work. The context, at the time of the preparation and dispatch of the Tab 698 letter, was one encouraging resort to self-justification. The letter is a self-serving letter. It was not addressed to anyone directly involved in the contemplated litigation but the addressee was someone who would logically be expected to discuss the matter of the TBPL lease and its status with TBPL itself. There is a clear danger that the content of the letter was affected by a desire on the part of Mr Barr (and therefore TBPL), with the litigation at the forefront of the mind, to portray matters in a light favourable to the outcome of that litigation, possibly at the expense of accurate and objective portrayal.

41 The Tab 698 letter will therefore be rejected as hearsay.

42 The next particular document to be addressed is at Tab 701 of the proposed tender bundle. It is another letter from TBPL to Leda. It bears the date 8 May 2002, that is, one day after the Tab 698 letter. The position in relation to the Tab 701 letter is the same. It too will be rejected.

43 The next document is at Tab 705. It is a letter from TBPL to the National Parks and Wildlife Service. The only submission in relation to this document is that a s 136(a) limitation should be imposed because of the defendant’s inability to cross examine Mr Barr. The submission has the same basis as the earlier s 136(a) submissions. For the reasons expressed in relation to earlier documents, there will be no s 136(a) limitation.

44 I come finally to the fourth category of documents, being those at Tabs 498, 693 and 733 of the proposed tender bundle. These are all documents generated by third parties standing at arm’s length from the parties to this case and their associates. Again, it is necessary to deal with them individually.

45 The document at Tab 498 is a copy of minutes of a meeting attended by Mr Barr and several of the consultants involved in the land development project. It contains a number of passages purportedly recording things said by Mr Barr at the meeting (he, as I have said was not the author). The only submission made is that the court should, pursuant to s 136(a), limit the use to which this document can be put, with the limitation and the rationale for its imposition being as in the earlier cases. For the same reasons, no limitation is warranted.

46 I consider next in the fourth class the document at Tab 693. It records notes made by Mr van Rij of Leda after a meeting he had on 24 April 2002 with Mr Barr. Again, things are recorded as having been said by Mr Barr. It is not suggested by the defendant that the business records exception is not applicable. The defendant says, however, that there should be exclusion under s 135 or a limitation under s 136(a) in respect of the statements attributed to Mr Barr. The basis of the submission is the same as that for the earlier like submissions. For the same reasons, there will be no exclusion or limitation.

47 The last document calling for consideration is at Tab 733. It records notes made by officers of Tweed Shire Council of a meeting they had with Mr Barr on 5 July 2002. The document refers to things said by Mr Barr. Exclusion under s 135 or limitation under s 136(a) is sought but again, and for the same reasons, neither is warranted.

48 In the result, therefore, there will be a ruling that the documents at Tabs 698 and 701 of the proposed tender bundle be rejected and that all other documents the subject of the submissions relevant to the objections delineated as mentioned in paragraph [2] above be admitted without, in relation to any of them, any limitation on use under s 136 of the Evidence Act.

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