Ali v Hartley Poynton Limited [2001] VSC 50

14. On resumption, he was questioned further about the conversations. He again went through his conversation with Mr. Selimi and then said that he had also received a phone call from Mr. Barba on the next day. Counsel for the plaintiff then interrupted to suggest that that issue was not part of the questioning. Counsel for the defendant sought to pursue the matter, saying that it was Mr. Barba who had been saying those things. Mr. Ali clarified that what he was attempting to do was explain what it was that was distressing him. Counsel for the defendant then asked Mr. Ali what Mr. Barba had said. He commenced his response by saying "what he basically said your Honour was that Chris Martin...". Counsel stopped him and said "Not what he basically said; what did he say to you?" to which the witness replied "I don't remember word for word". I then asked him what it was that had caused him concern. He responded as follows:

"What was it that caused me concern was that he said Chris Martin had just phoned and Chris Martin was saying that basically they were going to sue for defamation, personal defamation, and they are going to - and if it is in any interest that I should have a talk with my father and ask him to - he said that there was going to be a settlement figure offered of $550 -"

18. Counsel for the plaintiff then intervened and the witness was asked to leave the court while the situation that had emerged was discussed. During that discussion no objection was taken to the matter proceeding and no reference was made to the evidence of the statement of the possible offer. Counsel indicated that he would need the transcript and go on to another subject. Counsel for the defendant, on the witness' return, resumed cross-examination on the merits of the matter.

21. On the following day, I was invited by both parties to stand the matter down while negotiations took place. Those negotiations were unsuccessful.

24. When the matter resumed on Friday morning counsel for the defendant made this application that the trial be terminated relying upon the evidence of Mr. Ali of his conversation with Mr. Barba in the course of which he said Mr. Barba had said that Mr. Martin had said "that there was going to be a settlement figure offered of $550."

27. It is common ground that, assuming negotiations were taking place at the relevant time, anything conveyed to Mr. Ali as asserted by him in his evidence was privileged. In that sense it is put that the position differs from the revelation of payments into court because the provisions in the rules relating to non-disclosure of payments into court have been held to be directory only. It seems to me, however, that to the extent that this issue bears on my decision, there is no evidence to suggest that the communication, if made to Mr. Barba, was made in the course of any settlement negotiations. Rather, Mr. Ali's account as to what was said points only to the possibility of such negotiations being opened.

30. Counsel were not able to direct me to any authority directly in point which might shed light on the issues to be considered in the exercise of the discretion. The cases that look at the problem of disclosure of payments into court talk about the causing of "embarrassment" to the judge.

33. It seems to me that it would be relevant to consider, inter alia,

(a) Whether the Judge would in fact find himself or herself embarrassed in the decision-making process; and

(b) Whether the appearance of justice has been compromised.

As to the latter, it would be relevant to consider a test akin to that for apprehended bias, namely, whether a fair-minded observer might reasonably apprehend that the Judge's decision might, when made, be affected by the evidence.

40. Both parties were careful to avoid any suggestion that any offer of settlement had in fact been made. At the same time they were careful to avoid indicating that such an offer had not been made. The issue has to be resolved by considering what the witness said.

43. Mr. Beaumont argued that his client cannot obtain a fair trial before a judge having knowledge of this conversation. He submits that it does not matter whether what Mr. Ali said was true or not. What matters is that there is evidence of an intention to make an offer and in that situation anyone considering the conversation alleged might well conclude the defendant thought it was liable and thought it was liable at least for the $300,000 which was given by the Ali interests to the defendant to purchase shares and was lost and liable for the lost opportunities in respect of investment of that amount together with some money for interest. He submitted that a judge could be embarrassed if he or she had decided that the plaintiff was entitled to the money back of say $300,000 and then had to consider whether to award damages for lost opportunity to invest that money and what interest was payable. He argued that it creates a situation where the Judge would have a basis for thinking that any award for the plaintiff under $550,000 was likely to have cost implications for the plaintiff. Thus, he argues, that the Judge must be embarrassed should that decision have to be made and, should any award close to $550,000 be made, the appearance of justice would be compromised.

46. Counsel for the plaintiff submitted that assuming the accuracy of the conversation, there was no basis from which anyone might infer an admission of liability from such an offer, assuming it was about to be made. He argued that there could be a variety of reasons in a dispute, like the present one, which would explain why a party might make such an offer in such an amount. He further submitted that if the evidence be accepted, it was no more than a statement that an offer was going to be made. It was not an offer and there was no evidence that it had ever been made. In addition, the evidence of the settlement figure was on its face incomplete and there was no evidence as to what the "550" was to cover; for example, did it include interest and did it include costs? One might also ask whether it applied to all causes of action or one or some and, if so, which. Counsel submitted that the evidence was of an incomplete statement of something that was a possibility and therefore it was innocuous.

49. Both counsel accepted that it was relevant to consider the stage of the trial at which this incident has occurred and the costs incurred to date and the cost to be incurred in the future. Counsel for the defendant is correct in his submission that the trial is at an early stage as far as evidence is concerned. It has, however, been running for 18 days with about 28 days of evidence to go. A substantial amount of time to date has been taken up with debate about amendments sought by the plaintiff but the defendant bears some of the responsibility for that time. The defendant also carries responsibility for other time spent on matters other than evidence. In my view the costs and convenience issues are nicely balanced between the parties. I do not take into account the convenience of the Court or of other litigants.

52. In considering the issue of embarrassment on my part, it is relevant to note that I felt no embarrassment at the time the evidence was given. Looking at that issue now, I remain of the same view. I am well aware of the weakness of human perception and memory, the dangers of hearsay evidence, particularly triple hearsay, and the difficulty of accurately relaying the content of conversations. For that reason alone, I would not dream of assuming that Mr. Martin had in fact made the statement alleged. Further, I have no basis for thinking that Mr. Martin had direct knowledge of any such proposal. My view now, as it was when I first heard this particular piece of evidence of Mr. Ali about alleged statements by Mr. Martin, is that no credence could be given to its hearsay aspects.

55. In my view the evidence is also "innocuous" for the reasons put forward by counsel for the plaintiff. I would add that whatever may have been under consideration by the defendant on the 21st and 22nd February when the alleged conversation occurred, it is most unlikely that the defendant's position is now the same after further evidence and a day of negotiation. Assuming it did make an offer in those negotiations, the offer may well have been higher or lower than the figure referred to by Mr. Ali. By the end of the trial in six weeks time there is a real possibility that both sides will have made further offers of compromise that bear no relation to the figure Mr. Ali mentioned. By then, and in that context, the evidence of the possibility of the making of an offer many weeks before of "$550" will be an inconsequential irrelevance.

58. In addition, I believe, looking at the situation of a fair-minded observer aware of the circumstances, and assuming that person was unaware of my own views, such a person would also, in my view, reject any suggestion that such a piece of evidence might affect the judge's ultimate decision.

61. For these reasons, the application should be dismissed.