Reynolds v Calvert

[2014] NZHC 2000

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2012-412-000910 [2014] NZHC 2000

BETWEEN

GRANT BRUCE REYNOLDS as

liquidator of JAMES DEVELOPMENTS LIMITED (in liquidation)

Plaintiff

AND

HILARY JANE CALVERT and HGW TRUSTEES LIMITED as Trustees of Frongopolus Trust of Dunedin

First Defendants

AND

CHRIS JAMES Second Defendant

Hearing:	21 August 2014
Appearances:	M J McCartney QC and A C Sorrell for Plaintiff M R Sherwood King and MAF Gilkison for Defendants
Judgment:	21 August 2014

JUDGMENT OF DUNNINGHAM J

[1]      This morning, the plaintiff has raised various objections to Mr Harvie’s brief of evidence, just before the defendant’s witness Mr Harvie was to be called to give evidence.  The concerns relate to breaches of, firstly, the hearsay rule at s 17 of the Evidence Act 2006. That of course provides that:

17       Hearsay rule

A hearsay statement is not admissible except-

(a)       as provided by this subpart or by the provisions of any other Act; or

(b)      in cases where-

(i)       this Act provides that this subpart does not apply; and

REYNOLDS v CALVERT and ANOR [2014] NZHC 2000 [21 August 2014]

(ii)      the   hearsay   statement   is   relevant   and   not   otherwise inadmissible under this Act.

[2]      There are also concerns that the opinion evidence rule at s 23 has been breached.  It is noted of course that, under s 24:

24       General admissibility of opinions

A witness may state an opinion in evidence in a proceeding if that opinion is necessary to enable the witness to communicate, or the fact-finder to understand, what the witness saw, heard, or otherwise perceived.

There is, too, the exception in s 25 for opinion evidence, but I think it is common ground that that exception does not apply here.

[3]      The plaintiff also cites the overarching rule at s 8 which provides that:

8         General exclusion

(1)      In any proceeding, the Judge must exclude evidence if its probative value is outweighed by the risk that the evidence will-

(a)      have an unfairly prejudicial effect on the proceeding; or

(b)      needlessly prolong the proceeding.

[4]      I have also had regard to s 7(2), which provides that:

(2)       Evidence that is not relevant is not admissible in a proceeding.

[5]      So the concerns generally focus on the fact that Mr Miller, who has already given evidence, was directly involved in the transactions in question, and much of what Mr Harvie’s evidence does is to provide an explanation of the events and the transaction, when he was not directly involved in those events and, effectively, he is endeavouring to provide some expert commentary on them, when he is not called as an expert witness, nor does he have the necessary quality of independence to be one.

[6]      I must state at the outset that it is highly undesirable that such points are taken so late in the piece.  As Mr Sherwood King points out, the brief has been with the plaintiff since 4 July 2014 and it replicates, in large part, evidence given by affidavit in earlier stages in the proceedings.   It seems to me, therefore, that the concerns raised by the plaintiff must have been apparent well before this juncture

and could have, at the very least, been signalled to the defendants earlier than this, where, at least some of the issues could have been resolved in advance.

[7]      I do not accept that Mr Miller’s evidence needed to be heard first for the objections to have been at least signalled.  That said, they are before me now and I address each of them in turn as follows:

(a)      The first objection is stated to relate to, para 2, but I perceive it to be in relation to both paras 2 and 3 which set out Mr Harvie’s qualifications and expertise.  I accept that paras 2 and 3 are irrelevant. They set up his qualifications and experience when Mr Harvie is not an expert witness.   All we need to know is his connection to the proceedings and that is dealt with in paras 1 and 4. Accordingly, paras

2 and 3 are excluded as inadmissible.

(b)The next objection is to paras 7 through to 10.  These paragraphs set out,  in  narrative  form,  the  transaction  involving  the  $740,000.    I accept  that  the  best  evidence  is  the  documents  recording  the transaction which were able to be produced by Mr Miller.  That said, this is merely narrative which Mr Harvie is as well placed to provide as  Mr Miller.    It  repeats  material  already before the Court  and  I consider it is unduly technical to treat it as inadmissible.

(c)       The next objection is to para 11,  which  refers to the meeting on

1 July 2009  at  which  the  resolution  that  is  at  the  centre  of  these proceedings  was  decided  to  be  approved.    It  is  not  apparent  that Mr Harvie was involved in this meeting.  This therefore is a hearsay explanation as to the reasons for the meeting.   If Mr Harvie can comment on any of this then that is an issue which needs to be led in evidence.   So this paragraph is inadmissible and Mr Harvie’s direct involvement in anything covered in that can be led in evidence.

(d)Paras 12 to 14 describe what Mr Miller did prior to the meeting and provides some explanation of the loan transactions as they are set out

in the records of his accounting firm.   Because it is not apparent to what  extent  Mr  Harvie  was  involved  in  this,  I  consider  this  is  a hearsay explanation and any evidence on Mr Harvie’s direct involvement in this again will need to be led.

(e)      Para 16 is a hearsay statement.   It is what is conveyed to him by Mr Miller about what was decided in the meeting and that should be excluded as inadmissible.

(f)      Paras 17 through to 25, I consider, are in the same category as paras 7 to  10.    While  the  best  evidence  is  in  the  documents  able  to  be produced by Mr Miller, it is merely a narrative of the accounting transactions  which  Mr  Harvie  is  as  well  placed  to  explain  as Mr Miller.   It repeats material already before the Court and again I consider it unduly technical to consider this inadmissible.  It can stay in.

(g)In para 26, the first sentence simply records a statement made by Mr Reynolds in evidence which is of course just a prelude to the explanation that follows.  It appears to be a factual explanation which I think Mr Harvie is as well placed as Mr Miller was, to provide to the Court of that accounting firm’s systems.

(h)Next is para 29.   Again the first sentence appears to be simply a repetition of what Mr Reynolds said in evidence which leads into the explanation given in the balance of the paragraph.   I see nothing objectionable in this and it can stay in.

(i)Para 30, is an explanation of why Mr Reynolds would have seen the resolution date of 1 July 2009.  I consider this paragraph deals with the firm’s systems and Mr Harvie is in as good a position to know the firm’s systems as Mr Miller, so, again, that can remain.

(j)Para 31, again, begins with a sentence from Mr Reynolds’ evidence by way  of  an  introduction  to  the  explanation  he  gives  that  follows. Again, this appears to be factual evidence about the firm’s systems which he is in as good a position to give evidence on as Mr Miller and it can remain.

(k)Para 32 simply recites letters received from other parties.  That can be deleted.   It is neither relevant nor of assistance.   I can refer to the document itself.

(l)Finally, there is para 36.   Again this does appear to be hearsay as Mr Harvie does not say he attended that meeting.   That should be deleted as inadmissible and evidence on that can only be led if he can establish he was directly involved in any matter there.

[8]      So the outcome is, I have ruled certain paragraphs to be inadmissible.  The paragraphs which should be deleted are paras 2, 3, 11, 12, 13, 14, 16, 32 and 36.

Solicitors:

Whitlock & Co., Auckland

MacKay and Gilkison, Wellington