Trade Practices Commission v Arnotts Ltd

[1989] FCA 440

Re: TRADE PRACTICES COMMISSION
And: ARNOTTS LIMITED; ARNOTT'S BISCUITS LIMITED; FLEDSPAC PTY. LIMITED
AND THE DICKENS CORPORATION PTY. LIMITED
No. G1316 of 1988
FED No. 440
Evidence

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Evidence - tender of document under business records provisions of Evidence Act - whether maker of statement relevantly "qualified"

HEARING

SYDNEY

#DATE 11:8:1989

Counsel and Solicitors Mr. B.C. Oslington Q.C.,
for Applicant: Mr. D. Staelhi and Mr. M.R.J.

Ellicott instructed by the Australian Government Solicitor

Counsel and Solicitors Mr. C.A. Sweeney Q.C. and

for first and second Mt. Mr. P. Comans instructed by
respondents Clayton Utz

ORDER

Rule that the statements in the letter dated 11 May 1988 (part of Ex. 85) are admissible only for the limited purposes for which they have already been admitted.

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

JUDGE1

Part of Exhibit 85 is a confidential document, being a copy of a letter written by Mr. A. to Mr. B., an officer of X Pty. Limited (hereafter "X"), dated 11 May 1988. The letter has been admitted into evidence, without objection, as a business record for certain limited purposes, to be mentioned shortly. On behalf of Arnotts, it is submitted that the statements in the letter should also be admitted as evidence of the truth of what was stated in the document to have been said by several third parties in the course of interviews with the writer of the letter, Mr. A.

2. The background to the present question, without disclosing confidential details, is as follows. Mr. A. is an officer of Y Pty. Ltd. (hereafter "Y"), a company which, it may be inferred, provides retail marketing services. X are marketing consultants. The copy letter to Mr. B. states, inter alia, as follows (confidential matter has been excised):

"Dear (B)

As discussed I visited (a city of Australia) on Thursday, 5th May to complete interviews with the three major accounts, namely (three retailers are mentioned) concerning the possible introduction of a new range of biscuits.

(First named "retailer")

I spoke with...(Perishable Buyer) and...(Merchandise Manager). Even though they do not stock the lines they are extremely familiar with the market and with their major clients, namely, (several "client" retail outlets). They indicated that these major clients would enthusiastically support another entrant into the biscuit market particularly biscuits of an established quality.

(A named supplier) is considered to be 'the best' and the other two companies participating in the biscuit market, namely (other named suppliers), perform very poorly. It would necessitate individual promotional activity to be arranged with these groups but no up front costs would be involved apart from advertising or promotional activity.

I list below the promotional charges applicable for these smaller operators.

(First named "Retailer")

Bonus Buys $850 or %990 plus case off Mark Downs $400 plus case off or 5 products for $1600

..."

3. It is common ground that the statements in the letter are evidence of (a) the terms of the communication between Y and X; (b) the opinions held by Mr. A. as an expert in the area, as to the likely future conduct of the retailers; and (c) the process of reasoning adopted by Mr. A. to form that opinion. But Arnotts seeks to go further and submits that each of the statements in the letter should also be received as evidence of the truth of the statements attributed to the retailers pursuant to the "business records" provisions of the Evidence Act 1905 ("the Act").

4. I cannot accept Arnotts' submission.

5. Section 7B of the Act is as follows: "(1) Subject to this Part, where, in any proceeding, evidence of a fact is admissible, a statement of the fact in a document is admissible as evidence of the fact if -

(a) the document containing the statement forms part of a record of a business, whether or not the business is in existence at the time when the question of admissibility arises;

(b) the statement was made in the course of, or for the purposes of, the business; and

(c) the statement was made by a qualified person or reproduces, or was derived from, either or both of the following descriptions of information:

(i) information in one or more statements, each made by a qualified person in the course of, or for the purposes of, the business;

(ii) information from one or more devices designed for, and used for the purposes of the business in or for, recording, measuring, counting or identifying information, not being information based on information supplied by any person.

(2) This section makes a statement admissible notwithstanding -

(a) the rules against hearsay;

(b) the rules against secondary evidence of the contents of a document;

(c) that any person concerned in the making of the statement is a witness in the proceeding, whether or not he gives testimony consistent or inconsistent with the statement; or

(d) that the statement is in such a form that it would not be admissible if given as oral testimony.

but does not make admissible a statement that is otherwise inadmissible.

(3) In this section, 'fact' includes opinion."

6. Reference should also be made to s.7H, which empowers the court, for the purpose of determining admissibility, to draw inferences from the form or content of the document as well as from other matters. Mention should also be made of s.7M(1)(c), which provides that where a party to a proceeding tenders any evidence under s.7B, and it appears to the court that the evidence may be unfair to any other party, the court may reject the evidence, or if it has been received, the court may exclude it. The present question is not, strictly speaking, whether the material should be excluded in any entire sense but, rather, whether it should be admitted for a particular, limited purpose only. In my view, the power conferred by s.7M(1)(c) is available to be used so as to restrict the purposes for which a statement is admitted (cf. Hughes v. National Trustees, Executors and Agency Company of Australasia Limited (1978) 143 CLR 134 at p 153).

7. It is convenient to deal with each of the four ingredients of s.7B separately as follows:

(1) Where evidence of a fact or of an opinion is

admissible, a statement of that fact or opinion in a document is admissible as evidence of that fact or opinion (see s.7B(1)). What is the relevant fact or opinion here? The extract from the letter which is set out above states, inter alia, the following relevant facts and opinions:
(a) On 5 May 1988, Mr. A. interviewed officers of a major

"retailer" of food, asked them their attitudes to a possible new entrant into the biscuit market and received a positive response;

(b) The officers also provided Mr. A. with details of retail

"promotional charges".

8. Is either (a) or (b) a relevant fact or opinion?

9. In my view, the expert opinions of the officers of the retailer described in (a) is relevant, at least in the adjectival sense, to a matter in issue in the principal proceedings. Further, in my view, the facts being the details in (b) are also adjectivally relevant.

10. (2) The document must form part of a record of a business (see s.7B(1)(a)). Since it may be inferred that both Y and X were systematically collecting this information as part of a market research exercise, the letter was part of the records of the businesses of both those companies (see Compafina Bank v. Australia & New Zealand Banking Group Ltd. (1982) 1 NSWLR 409).

11. (3) The statement must be in the course of, or for the purposes of, the business in question (see s.7B(1)(b)). In my opinion, the statement was made in the course of Y's business and for the purposes of X's business.

12. (4) The statement must be either (a) made by a "qualified" person or (b) reproduced, or derived from, inter alia, information in a statement made by a "qualified person" (see s.7B(1)(c)). A "qualified person" is defined in s.7A(1) as follows: "qualified person", in relation to a statement made in the course of, or for the purposes of, a business, means a person who -

(a) at the time when the statement was made, was -

(i) an owner of the business or a person carrying on the business;

(ii) a servant or agent employed or engaged in the business;

(iii) a person retained for the purposes of the business; or

(iv) a person associated with the business in the course of another business; and

(b) at that time -

(i) in the case of a statement that is not admissible in evidence unless made by an expert on the subject matter of the statement - was such an expert; or

(ii) in any other case - had, or may reasonably be supposed to have had, personal knowledge of the facts stated;"

13. It will be noted that the person must be qualified qua the business in question.

14. In my view, Mr.A. is a "qualified person" in respect of the business of Y. He is "qualified", in respect of that business, in two areas: (a) as to the facts being the communications passing between himself and the retailers he interviewed; and (b) as to any opinions he held as an expert in market research. However, in my opinion, Mr. A. was not "qualified" to speak in respect of the businesses of the three retailers (see Re Marra Developments Ltd. and the Companies Act (1979) 2 NSWLR 193 at pp 205-6; Ross McConnel Kitchen & Co. Pty. Ltd. (In Liq) v. Ross (1985) 1 NSWLR 233 at p 236; Atra v. Farmers & Graziers Co-op Co Ltd (1986) 5 NSWLR 281 at p 287; ALC Ligertwood, Australian Evidence, 1988, at p 408).

15. It must follow, in my opinion, that the statements in the letter are not admissible as evidence of the truth of the statements there attributed to the three retailers. Mr. A. was not "qualified" to speak for their businesses. Nor was there any relevant relationship of "association" for the purposes of sub-para.(a)(iv) in the definition of "qualified person" in s.7A(1). It is true that Mr. A. interviewed the officers of the retailers. But that circumstance does not warrant the conclusion that, therefore, Y and the retailers were "associated" for present purposes.

16. In the circumstances, it is not necessary to deal with the Commission's alternative argument of unfairness based on s.7M.

17. I make the following orders:

Rule that the statements in the letter dated 11 May 1988 (part of Ex. 85) are admissible only for the limited purposes for which they have already been admitted.