3WJ Pty Ltd & Anor v Kanj

LEGISLATION CITED: Evidence Act 1995 Suitors' Fund Act 1951

Baulderstone v Gordion Runoff [2008] NSWCA 243 Ghazal v GIO (1992) 29 NSWLR 236 Ghazal v GIO of NSW (1992) 20 NSWLR 336 Glover v Australian Ultra Concrete Floors Pty Limited [2003] NSWCA 80 CASES CITED: Inzaurralde v GIO (Court of Appeal, 28 October 1992, unreported) Jazairy v Najjar [1999] NSWCA; (1999) 27 MVR 4398 Kirby v Sanderson Motors Pty Limited [2002] NSWCA 44; (2001) 54 NSWLR 135 R v Reardon [2002] NSWCCA 203 Regina v Le [2002] NSWCA 186 Stanoevski v R [2001] HCA 4; (2001) 202 CLR 115

3WJ Pty Limited (First Appellant) PARTIES: Mahmoud Awada (Second Appellant) Jamal Kanj (Respondent)

COUNSEL: N C Hutley SC; A P Quinlivan (Appellant) M L Williams SC; D M Macfarlane (Respondent)

SOLICITORS: A R Conolly & Company (Appellants) Carroll & O'Dea Lawyers (Respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40016/08 DC 1219/04

ALLSOP P HODGSON JA IPP JA

24 NOVEMBER 2008 3WJ PTY LTD & Anor v Jamal KANJ Judgment

1 ALLSOP P: I will ask Ipp JA to deliver the first judgment. 2 IPP JA: This appeal turns on issues involving the law of evidence. 3 The respondent, Mr Kanj, was the plaintiff below. The first appellant, 3WJ Pty Ltd, was the first defendant and the second appellant, Mr Awada, an employee of 3WJ, was the second defendant. Mr Kanj was injured at the premises of 3WJ when he fell two or three metres from the back of a truck while loading it. He alleged that he fell because a forklift, negligently driven by Mr Awada, collided with the truck. He claimed damages for his injuries from 3WJ and Mr Awada. 4 The appellants denied liability. They contended that the forklift did not collide with the truck and did not cause Mr Kanj's fall. Whether the forklift was moving prior to the fall and whether it struck the truck were the key facts in issue at the trial. The appellants contended that Mr Kanj simply fell while climbing off the truck. 5 Mr Kanj has no independent recollection of the accident. He relied on an eyewitness, Mr Omar El Ghazzaoui, another employee of 3WJ, to prove his case. Several witnesses testified on the appellants' behalf. 6 The trial judge, Johnstone DCJ, accepted Mr El Ghazzaoui's version of the events and upheld Mr Kanj's claim. 7 There were several grounds of appeal but it is necessary only to refer to two, namely: (a) The trial judge erred in refusing to allow the appellants to call witnesses to give evidence that Mr Kanj "had suborned or attempted to suborn witnesses to support his case";

(b) The trial judge erred in permitting Mr Kanj to cross-examine Mr El Ghazzaoui pursuant to s 38(1)(c) of the Evidence Act 1995, in allowing Mr El Ghazzaoui's prior inconsistent statements to go into evidence, and in treating representations in the prior inconsistent statements as evidence of the truth thereof. 8 I turn to the first ground, namely, that relating to his Honour's refusal to allow the appellants to call witnesses to testify that Mr Kanj had suborned witnesses. 9 Counsel appearing for the appellants at the trial put to Mr El Ghazzaoui that Mr Kanj offered to give him money to be a witness. Mr El Ghazzaoui denied this. Counsel then put to Mr El Ghazzaoui that he told Mr Kanj that, for money, he would do whatever Mr Kanj wanted. Mr El Ghazzaoui denied this. Counsel put to Mr El Ghazzaoui that Mr Kanj told him that he should say, "one of the forklift drivers knocked the truck when at work" and offered to give him $10,000. Mr El Ghazzaoui denied these propositions. The same propositions were put to Mr Kanj, who also denied them. The questions identified the occasions when the offers were made, who was present, and what was said. 10 Later, during the course of the trial, counsel for the appellants sought to call two witnesses in order to prove that Mr Kanj had attempted to persuade Mr El Ghazzaoui to give false evidence, as counsel had put to Mr El Ghazzaoui and Mr Kanj. Counsel for Mr Kanj objected to these witnesses being allowed so to testify. 11 Counsel for Mr Kanj relied on UCPR 14.14(2)(a), which provides that a party must plead any matter that, if not pleaded specifically, might take the opposite party by surprise. He submitted that the suborning of Mr El Ghazzaoui amounted to an allegation of fraud, and this needed to be pleaded because that took him by surprise. Counsel for the appellants responded that the rule was limited to matters intrinsic to the cause of action. Johnstone DCJ remarked, "I disagree and the cases make it clear that the rule extends more broadly to matters going to the conduct of the trial generally in which it could be said that the plaintiff is taken by surprise by such matters." 12 In discussing the surprise rule generally, Hodgson JA in Kirby v Sanderson Motors Pty Limited [2002] NSWCA 44; (2001) 54 NSWLR 135 at [20] stated that the rule applies to material facts relevant to the cause of action relied upon. The dishonesty of a witness, testifying in support of a cause of action or defence in which dishonesty in any form is not an element, is not a material fact that has to be pleaded. In fact, as Mahoney JA observed in Ghazal v GIO of NSW (1992) 29 NSWLR 336 at 347F-G, in a case like the present (a standard motor accident claim), where fraud is neither an element of the claim nor a defence, the fraudulent or otherwise dishonest giving of evidence "is not a pleadable matter". As is made clear in Ghazal by Kirby P at 344G-346D and Mahoney JA at 347F-348A, the obligation of a party who wishes to contend that a witness has been suborned, or has given fraudulent or otherwise dishonest testimony, is to make clear at an appropriate time that the honesty of the witness's testimony is a real issue in the trial and the witness should be fairly confronted with the allegations in question. 13 Ghazal and the earlier case of Inzaurralde v GIO (Court of Appeal, 28 October 1992, unreported) were relied upon by Mason P (with whom Sheller JA and Powell JA agreed) in Jazairy v Najjar [1999] NSWCA (1999) 27 MVR 498 at 506 where his Honour said: "It was not incumbent upon the Nominal Defendant to plead fraud in answer to a motor negligence claim: see Inzaurralde v GIO … ; Ghazal v GIO … . But the cases just cited emphasise the duty, in fairness, to confront a plaintiff with such a contention before it is proper to rely upon it as a possible answer to an otherwise clear case of negligence, … ." 14 The situation involving a witness who is said to be suborned is different from the situation in a case such as Glover v Australian Ultra Concrete Floors Pty Limited [2003] NSWCA 80. In Glover the defence contained a plea of non-admission and the defendant sought to advance an affirmative case. The court held that the affirmative case should have been pleaded. The underlying rationale for this decision was that the affirmative case constituted material facts that should have been pleaded so as to comply with the surprise rule. That situation is to be contrasted with a case such as the present where the defendant is not advancing new circumstances to support a denial of the plaintiff's allegations in his statement of claim, but is attempting to prove, simply, that a witness has given dishonest evidence. Put in another way, the allegation that Mr El Ghazzaoui had been suborned to give dishonest evidence was not a material fact in the appellants' defence. 15 A further aspect that I would stress is that no case management issues arose. The case was not managed in the District Court. There was no exchange of statements. At trial, the issue of potential delay caused by the proposed evidence was not taken up by counsel for Mr Kanj and was not considered by the judge. His Honour dealt with the question of whether the evidence should be allowed solely on the basis of a pleading point. Because his Honour thought that the attempt to suborn the witness should have been pleaded, he refused to allow the evidence to be led. 16 The appellants were not required to plead the attempt to suborn Mr El Ghazzaoui. Indeed, it was not a pleadable allegation. His Honour's reasoning in this respect was erroneous. The evidence the appellants sought to adduce was admissible under s 106(a) of the Evidence Act and the appeal must succeed on this ground alone. 17 I now turn to the second ground of appeal. 18 When Mr El Ghazzaoui first gave evidence in chief he stated that he could not say whether the forklift moved before Mr Kanj fell "because I am not there sitting watching what people are doing." He also said that he did not see the forklift move at any time before Mr Kanj fell off the truck. Counsel for Mr Kanj then made an application under s 38 of the Evidence Act to question Mr El Ghazzaoui as if cross-examining him "on the basis of prior inconsistent statements that have been made". 19 Counsel for the appellants objected on various grounds, including that under the section there were "a number of discretionary factors to be taken into account". Counsel referred to s 192 of the Act and submitted that there should be a voir dire "to test the validity of the statement as to whether he understands and knew what he was signing at the time". 20 Johnstone DCJ, however, rejected the submissions of counsel for the appellants and granted the application. He did not give any reasons for his decision. 21 Section 38, read with s 192 of the Evidence Act, required his Honour, in deciding whether to give counsel leave under s 38 to question Mr El Ghazzaoui "as though [he] were cross-examining the witness", to take into account the matters prescribed by s 192(2): Stanoevski v R [2001] HCA 4; (2001) 202 CLR 115 at [41] per Gaudron, Kirby and Callinan JJ. 22 It is not always necessary for a judge to refer expressly to the matters set out in s 192 when making a decision to which the section applies. In R v Reardon [2002] NSWCCA 203 Hodgson JA said at [30]: "In my opinion, unless the contrary may be inferred from the circumstances or from what a judge does say, it should be assumed that a judge hearing a case will continually be having regard, in making such decisions as in the judge's other acts and omissions during the course of hearing, to … the matters referred to in s 192(2)."

See also Regina v Le [2002] NSWCCA 186. 23 The decision to allow counsel for Mr Kanj to question Mr El Ghazzaoui as though he were cross-examining him was capable of having a profound effect on the ultimate decision to which his Honour came. The case, in effect, turned on what Mr El Ghazzaoui said and how the judge viewed his credibility. 24 As I have previously stated, when first giving evidence in chief Mr El Ghazzaoui testified that he was not able to say whether the forklift moved. On the basis of that evidence, had it stood, Mr Kanj would not have succeeded in his case. It is noteworthy that, after leave had been given, and after experiencing some difficulty in the questioning process, Mr El Ghazzaoui changed his evidence and testified that he had indeed seen the forklift move and collide with the truck. He adhered to this evidence when cross-examined by counsel for the appellants. His Honour believed him. So, but for the decision his Honour made in allowing Mr El Ghazzaoui to be questioned under s 38, Mr Kanj's claim would have failed. 25 Significant issues had to be considered in deciding whether or not to grant leave under s 38, not only because of the potential importance of Mr El Ghazzaoui's evidence to which I have referred but also because there were real questions as to the reliability of Mr El Ghazzaoui as a witness. These arose from the quality of his evidence initially in chief and from the fact that his prior statements were in English and his evidence was given in Arabic (and translated by an interpreter). His Honour was called upon to weigh the various factors for and against his decision in the balance before coming to a conclusion. The importance of the decision was so great that one would expect his Honour to explain how he had resolved the matter and to refer to the weight that he had attached to each of the matters that he took into account. His Honour, however, did not undertake this exercise. The inference arises that his Honour did not consider the factors set out in s 192(2). 26 Counsel for the appellants had sought a voir dire. This was not an unreasonable request, as it would have been a useful exercise to determine the reliability of the prior inconsistent statements and would have enabled counsel for the appellants to question the witness without his answers becoming part of the case against the defendant. Johnstone DCJ said, however: "I think all those things go to cross-examination, not to the application". 27 This observation by his Honour reinforces the inference that his Honour did not apply his mind to the factors to which he was required to have regard under s 192(2) of the Act before granting the application under s 38. 28 Accordingly, in my opinion his Honour made a material error in discretion by granting the application without taking into account the factors in s 192(2) and I would uphold the appeal on this ground as well. In coming to this conclusion I express no view as to the appropriateness of the merits of his Honour's decision. 29 I would add briefly that I would not uphold the appellants' contention that his Honour treated the representations contained in the prior inconsistent statements as evidence of the truth of the facts asserted therein or that he relied on the statements otherwise than for the purposes of determining Mr El Ghazzaoui's credibility (see s 38(3) of the Evidence Act). These views, however, have no bearing on my conclusion as to the ultimate disposal of this appeal. 30 The matter has to be remitted for retrial, as it is not possible for this court to decide on the respective merits of the parties' contentions without having seen or heard the witnesses. 31 I would add that it will be a matter for the trial judge, should the question again arise, as to whether to allow Mr El Ghazzaoui to be questioned on behalf of Mr Kanj under s 38(1). 32 I propose the following orders:

(1) The appeal is upheld. (2) The judgment of Johnstone DCJ is set aside. (3) The matter is remitted to the District Court for a new trial. (4) The respondent is to pay the appellants' costs of the appeal. (5) The costs of the trial are to be at the discretion of the trial judge who hears the remitted trial. (6) The respondent is to have a certificate under the Suitors' Fund Act 1951 if otherwise qualified. 33 ALLSOP P: I agree with the orders proposed by Ipp JA and with his Honour's reasons. My agreement with his Honour's reasons is in no way a weakening of the statements of principle now often made as to the requirement of parties to co-operate in defining issues in litigation. (See generally and most recently Baulderstone Hornibrook Engineering Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[170]). 34 The question here was dealt with by the learned trial judge as a question of pleading. The asserted untruthfulness of a witness in relation to the plaintiff's case is generally not a matter to be pleaded and was not a matter to be pleaded here. 35 Case management in a particular case may require the disclosure of the issue in question, but not the rules of pleading. This is not to say the discretion under the Evidence Act 1995 (NSW), s 135 in the management of the trial and the admission of evidence might not also arise. No such issues are raised here because the matters were dealt with as a question of pleading and there was no case management. 36 Case management is not the only context in which issue definition should be undertaken. However, how to challenge a witness said to be lying for corrupt reasons is a very difficult and delicate issue to run. This is not, for instance, a question of film in a compensation case which might well go to the medical evidence about a witness and which might have to be disclosed for the better disposition of the medical evidence. 37 Few general rules can be laid down. But the asserted dishonest giving of evidence may be one, in the circumstances, which can only be dealt with by way of confrontation in the witness box. 38 How a trial should be conducted is a matter of discretion for the trial judge. Bearing in mind the lack of any case management here, how an issue such as this should have been dealt with is a delicate and difficult question. That is not, however, how this matter arose. Here it arose as a pleading issue. 39 With those additional comments, I agree with Ipp JA.

40 HODGSON JA: I also agree with the orders proposed by Justice Ipp and with his reasons. 41 If fraud had been an element of the defence in this case, it would have been necessary to plead it. However, as Mahoney JA pointed out in Ghazal v GIO of NSW (1992) 20 NSWLR 336 at 347, this is not the case if fraud is alleged otherwise than as an element of a defence or a cause of action. As the President has pointed out, it may be appropriate as part of case management prior to a trial that such allegations be disclosed; and if this does not happen and such an allegation is raised for the first time at the trial, questions may arise as to whether there should be an adjournment or whether admissible evidence should be rejected under s 135 of the Evidence Act. Such a course would require careful consideration of issues of fairness between the parties. This did not happen in this case, because the primary judge considered the matter to be one of pleading. 42 As regards the s 38 issue, I adhere to the view I expressed in R v Reardon [2002] NSWCCA 203 at [30] that it is not always necessary to deal explicitly with the matters set out in s 192 of the Evidence Act. In the present case, however, there are indications that the primary judge did not address the s 192 issue. 43 The prior statements of the witness alleged to be inconsistent with his present evidence were potentially of vital importance in the case. This very importance suggested that serious consideration needed to be given as to whether there should be a voir dire, to establish whether the statements were made in circumstances such that they should be accepted as prima facie representing what the witness then intended to say, in circumstances where he was unable to read English. The importance of the issue in this case did in my opinion require some explicit addressing by the primary judge of s 192 considerations.

44 ALLSOP P: The orders of the Court are as proposed by Justice Ipp.

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