ASIC v Vines [2003] NSWSC 1237 | Case summary

3138/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V GEOFFREY WILLIAM VINES & 2 ORS JUDGMENT 1 HIS HONOUR: The plaintiff is the corporations and securities regulator, and the first defendant, Mr Vines, was at the relevant times the chief financial officer of GIO Australia Holdings Ltd. The plaintiff seeks civil penalty, banning and compensation orders against Mr Vines and two others, alleging against Mr Vines breach of his statutory duty of care and diligence under, in substance, s 232(4) of the Corporations Law, with respect to his alleged role in the making of an inaccurate profit forecast in GIO's Part B Statement issued in response to a takeover bid by AMP Ltd in 1998. 2 On the present state of the authorities, civil penalty proceedings of the present kind are to be treated as civil rather than criminal proceedings, for the purposes of the law of evidence, although civil procedures have been adapted in civil penalty cases: Corporations Law, s 1317ED; Corporations Act 2001 (Cth), s 1317L; Adler v Australian Securities and Investments Commission (2003) 46 ACSR 504, at paragraphs 654-682 per Giles JA. Nothing in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 77 ALJR 1629 binds or permits me to take any different view on this point. 3 At the conclusion of the plaintiff's case, senior counsel for Mr Vines informed the Court that his client wished to go into evidence, and to rely (inter alia) on "character" evidence by four witnesses. The plaintiff objected on the ground that the evidence of the four witnesses is inadmissible. This judgment relates to the admissibility of the evidence. I have already announced the outcome to the parties. 4 The first defendant seeks to rely on an affidavit by Richard Charles Wilkinson, and witness statements by Don Findlater, David White and Robert William Tobias. For convenience, I shall refer to them as "the four witness statements", for nothing turns on the fact that one of them is in the form of an affidavit. 5 Mr Wilkinson is a director of KPMG Actuaries Pty Ltd and is a senior actuary specialising in the valuation of insurance companies. In 1999 he became the appointed actuary to Re AC, when Mr Vines was the chief financial officer of that company, and continued to work with Mr Vines when Mr Vines became the chief executive officer of that company in 2000. Mr Findlater is a chartered accountant practising as a senior audit partner in KPMG's Australian audit practice, specialising in the insurance industry. He is the audit partner at KPMG responsible for Re AC, and worked particularly closely with Mr Vines after Re AC suffered heavy losses as a result of exposure to European storms in December 1999, and went into run-off. Mr White is a director of Port Jackson Partners Ltd, a company that provides strategic consulting advice to large corporations. He was previously with a large international management consultancy firm, McKinsey & Company. He worked closely with Mr Vines in 1998, when he was the McKinsey partner responsible for providing GIO with strategic consulting advice, and he has done some work for Re AC while Mr Vines has been chief executive officer. Mr Tobias is a senior commercial solicitor with special expertise in corporate acquisitions. He is a partner at Phillips Fox, providing legal services to Re AC and dealing closely with Mr Vines as chief executive officer. 6 The evidence has a common pattern. After stating their qualifications, their present and (in some cases) past positions, and summarising (in identical terms) their understanding of the allegations against Mr Vines, they give an account of their initial contact with him, which shows that each of them knows him well. Then they express opinions under two headings. 7 Under the heading "observations on Mr Vines" each of the four witnesses makes remarks that might broadly be described as amounting to character references. Thus: · Mr Wilkinson describes Mr Vines as "very professional", and "very open, cooperative and willing to be challenged". He says he has observed Mr Vines in his dealings with other employees of Re AC, and says he is prepared to challenge his underwriters and claims people in a constructive way to achieve what Mr Wilkinson regards as a sensible outcome, and that he has always been willing to get further information, and legal advice, to help clarify the issues concerning the most appropriate level of reserves to be carried. Mr Vines is, according to Mr Wilkinson, a good businessman trying to do the best for shareholders, and "at the top end of people in his position". Mr Wilkinson says Mr Vines and Re AC are one of the most professional reinsurance operations in Australia with regard to managing the run-off of their claims liabilities. · Mr Findlater says he has observed Mr Vines interacting with KPMG staff, staff of Re AC and APRA, and expresses the view that Mr Vines is a balanced and well rounded professional who always looks at both sides of an issue. He says he has always found Mr Vines to be calm and considered and that he never lets his emotions "run away" from him. He says he would discuss audit issues with Mr Vines in the first instance to get his input, and that Mr Vines has always been cognisant of the issues facing Re AC and its position and the need for him to get advice to support management's positions for presentation to the board. He says he has no reason to doubt Mr Vines' openness nor his integrity. He regards Mr Vines as astute and commercially successful in retaining key staff, and has been instrumental in holding Re AC together by helping to focus on commuting critical cedant relationships. He expresses the view that Re AC's run-off is likely become a case study of how to manage an insurance company run-off. · Mr White describes Mr Vines as a pleasure to deal with, saying that he is personable, honest, frank, extremely intelligent, financially literate, very thoughtful and reflective in relation to his business, cautious, careful and prudent. He says he has often observed Mr Vines to be thoughtful about proper process, and that he does not show much variation in mood under pressure. He says that Mr Vines is very probing in terms of the accuracy of information and numbers, and about the effect of any conclusions that others reach. He says Mr Vines will always want to know what investigations have been carried out. · Mr Tobias says that Mr Vines is a person who seeks legal counsel and appears to accept the advice he receives. He says that Mr Vines always appears to know, or to want to know, the requirements of regulatory bodies that he lists. He describes Mr Vines as a very open person who appears to have good relationships with the employees of Re AC, and to have managed to keep a good team at Re AC which appears to operate harmoniously and successfully. He expresses the view that Mr Vines is a very good client, who is prepared to debate issues but is reasonable in his demands, and is a professional chief executive officer. 8 In each of the four cases, the witness purports to express opinions about the character of Mr Vines rather than to give an account of facts from which inferences about his character might be drawn. Although the opinions are in each case said to be based on a substantial course of dealings with Mr Vines and upon knowing him well, the opinions themselves are expressed in very general terms. 9 Under the heading, "my response to the claims", each of the four witnesses makes remarks purporting to refute the claims made by ASIC against Mr Vines. Thus: · Mr Wilkinson says that to describe Mr Vines as someone who would not exercise due care and diligence does not reflect the person he knows. He says Mr Vines is always very careful and when challenged comes back to him with a proper professional response. He says Mr Vines is efficient and prompt, and ensures that Mr Wilkinson gets answers to his questions either through his staff or his own knowledge of the market, or by getting legal advice. · Mr Findlater says he has seen nothing in his extensive involvement with Mr Vines that would suggest that Mr Vines is otherwise than careful and diligent in the discharge of his functions. He says Mr Vines always explains why he has a particular view, and says what evidence he has to support that view. He says his experience with Mr Vines would be totally contrary to any allegations that Mr Vines would not take due care and diligence in his work, and that Mr Vines goes out of his way to look at matters in a considered fashion and to get outside advice when necessary. · Mr White describes Mr Vines as a man of great integrity, in the top 10% of people he has dealt with in his business career in terms of character and integrity. He says there is not a single thing in his dealings with Mr Vines that would lead him to suspect he was otherwise than diligent. He says his dealings with Mr Vines lead him to believe that Mr Vines would always act appropriately. · Mr Tobias says he has observed nothing that would cause him to suspect that Mr Vines was not diligent or that he would act without proper care. He says Mr Vines has never put him under any pressure to resolve a matter in a particular way and that he does not ask for favours. He says he would be surprised if Mr Vines would act in any way other than carefully and diligently in the discharge or his duties. 10 Once again, these are statements of opinion rather than statements of fact, and although they are said to be based on extensive dealings with Mr Vines and on knowing him well, they are expressed in general terms. 11 The admissibility of this evidence at the final hearing in this Court is governed by provisions of the Evidence Act 1995 (NSW). The provisions requiring close attention in this case are ss 55(1), 56, 76, 78, 97(1) and 135. Relevance 12 Section 56 is the pivotal provision. It states: "56(1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding. (2) Evidence that is not relevant in the proceeding is not admissible." 13 Thus, once evidence is judged to be relevant, it is admissible at the hearing unless it is made inadmissible by some other provision of the Act, such as the opinion rule dealt with in ss 76-79 or the tendency rule dealt with in s 97. 14 The concept of relevance is explained in s 55(1), which states: "55(1) The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding." 15 Senior counsel for Mr Vines submitted that a fact in issue in the present proceeding is whether or not Mr Vines was told by Mr Schneider, manager of GIO Re's technical services department, that Hurricane Georges was a $100 million event, or that a contract-by-contract analysis had established that it would be a $100 million event. The only evidence led by ASIC to establish that fact is the evidence of Mr Schneider. Mr Vines has denied that Mr Schneider ever said such things to him. 16 According to senior counsel for Mr Vines, ASIC will claim that, having been told these things by Mr Schneider, Mr Vines failed to discharge his statutory duty of care and diligence by not appreciating the significance of what he was told or its effect on the GIO Re's profit forecast. He then submits that the evidence in the four witness statements is relevant because it shows a propensity on the part of Mr Vines which is inconsistent with behaviour such as that alleged by ASIC. Further, he says, the character evidence tends to prove a propensity on the part of Mr Vines that if he had been told by Mr Schneider that Hurricane Georges was a $100 million event, he would have done something about it. 17 Senior counsel for Mr Vines submitted that another fact in issue, dependent upon Mr Schneider's evidence alone, is ASIC's allegation that Mr Vines authorised Mr Schneider to enter into the American Re retrocession contract on 13 November 1998. Mr Schneider has given evidence of a conversation he claims to have had with Mr Vines in which that authority was given, but Mr Vines has denied that the conversation took place, saying that such a matter would be for the Executive Director of GIO Insurance to decide. Although the submission was not developed, presumably it would be said on behalf of Mr Vines that the evidence in the four witness statements shows a tendency on his part not to usurp the functions of another senior executive in the GIO organisation. 18 It appears to me plain that the evidence in the four witness statements would be relevant evidence for the purposes of ss 55 and 56, in the manner claimed on behalf of Mr Vines. To adopt the language of Sackville J in Jacara v Perpetual Trustees WA Limited (2000) 106FCR 51, at 66, the evidence is "relevant to a fact in issue via propensity", and is "a link in the process" of refuting ASIC's case, although in the present case the evidence tends to establish a propensity for Mr Vines not to act in the manner alleged by ASIC, rather than any propensity for him to act in a particular way. The opinion rule 19 The opinion rule is stated in s 76(1), which provides: "76(1) Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed." 20 The principal parts of the four witness statements in this case are evidence of opinions (in the sense in which the word "opinion" was described in Allstate Life Insurance Co Ltd v Australia and New Zealand Banking Group Ltd (No 5) (1996) 64 FCR 73, at 75 per Lindgren J), tendered to prove the existence of facts about Mr Vines' likelihood to have acted in the manner alleged by ASIC. They are therefore excluded by s 76 unless saved by s 78 (lay opinion evidence) or s 79 (expert opinion evidence), regardless of whether they might also fall within the tendency rule or some other rule established by the Act. 21 Senior counsel for Mr Vines did not contend that the four witness statements contain expert opinion evidence to which s 79 applies. It was right not to seek to invoke s 79. The opinions expressed in the four witness statements are opinions about the character of Mr Vines. Each of the four witnesses has specialised knowledge, broadly speaking in the fields of actuarial science, audit, corporate strategic advice and commercial law respectively. But none of those fields of expertise would qualify the witnesses to give an opinion on the character of a human being, regardless of whether that human being works in a field to which their expertise is connected. In terms of s 79, their character evidence is not evidence wholly or substantially based on their specialised knowledge. It follows that the opinion rule will exclude the substantial part of each of the witness statements unless the qualification of the rule contained in s 78 is available. 22 Section 78 states: "78 The opinion rule does not apply to evidence of an opinion expressed by a person if: (a) the opinion is based on what the person saw, heard or otherwise perceived about a matter or event; and (b) evidence of the opinion is necessary to obtain an adequate account or understanding of the person's perception of the matter or event." 23 In a general way, the opinions contained in the four witness statements are "based on" what the witness saw, heard and perceived about Mr Vines' character and his tendency to act carefully and diligently. I have some doubts as to whether the witness statements do enough to establish the connection between what the witness saw, heard and perceived about Mr Vines and the very general expressions of opinion that each of the witnesses proffer, but it is unnecessary for me to decide that question. This is because the requirements of subparagraphs (a) and (b) are cumulative. In my opinion subparagraph (b) does not apply in the present case. 24 Section 78 was considered by Kirby J, but not the other members of the High Court, in Smith v The Queen (2001) 75 ALJR 1398. In that case the main issue was whether evidence by two police officers, that in their opinion the person shown in photographs taken by bank security cameras was the accused, was admissible. Gleeson CJ, Gaudron, Gummow and Hayne JJ held that the evidence was inadmissible because it was irrelevant, being founded on material no different from material available to the jury from its own observation. Kirby J held that the evidence was inadmissible under the opinion rule. He said (at 1408): "Neither police officer was present at the 'matter or event' in question at the appellant's trial, namely the robbery. Although the security photographs record the robbery taking place, the opinion of the police officers is 'based on' the photographs and not, as such, 'based on' the robbery itself which they did not see, hear or otherwise perceive. The Australian Law Reform Commission's report makes it clear that this provision of the Act was addressed, essentially, to the opinion of eye-witnesses [citing Report No 26, paragraphs 739-740]. It exists to allow such witnesses to recount, as closely as possible, 'their original perception [so as] to minimise inaccuracy and encourage honesty'." 25 Here the evidence in the four witness statements is not based on what the witnesses saw, heard or perceived about any "event". Assuming that subparagraph (a) is satisfied at all, it is satisfied because their opinions are based on what they saw, heard or perceived about a "matter", namely the character of Mr Vines with respect to his tendency to act carefully and diligently. But the evidence of their opinions cannot be said to be "necessary to obtain an adequate account or understanding" of their perception of that matter. Their opinion evidence is itself the articulation of their perception of the matter. The language of s 78(b) shows that the section was not intended to apply in such circumstances. The tendency rule 26 According to the submissions of senior counsel for Mr Vines, Mr Vines seeks to rely on the evidence in the four witness statements, in the manner explained above, to prove a tendency for him to act in a particular way, that is with due care and diligence contrary to ASIC's allegations with respect to the two facts in issue that have been identified. Therefore this evidence is tendency evidence falling within s 97(1) and is not admissible unless the requirements for admissibility in that section are satisfied. 27 This is a case where two exclusionary rules may come into play, namely the opinion rule because the evidence is opinion evidence, and the tendency rule because the evidence is adduced to prove a tendency. It appears to me that, in such a case, the evidence is inadmissible if it falls foul of either exclusionary rule, and is not saved from inadmissibility under one rule simply because it survives the other. Since I have held that the evidence is inadmissible under the opinion rule, strictly it is unnecessary for me to go further. However, in case there may be some basis for arguing, contrary to my view, that s 97(1) is capable of rendering admissible evidence of an opinion that would otherwise be inadmissible under s 76, and bearing in mind that the application of s 97(1) was fully argued, I should express my views on the application of that section. 28 Section 97(1) provides: "97(1) Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person's character or otherwise) to act in a particular way, or to have a particular state of mind, if: (a) the party adducing the evidence has not given reasonable notice in writing to each other party of the party's intention to adduce the evidence; or (b) the court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value." 29 In Jacara at 63, Sackville J described the tendency rule of s 97(1) as a "contingent exclusionary rule", "contingent in the sense that the tendency evidence is excluded only if the Court forms a view that the evidence would not have significant probative value". The submissions made on behalf of Mr Vines place the admissibility of the evidence squarely in the category of evidence relevant "via propensity" and in no other way, and so the difficulty considered by Sackville J in Jacara at 64-67, of determining whether the evidence is tendency evidence, is avoided in this case. 30 ASIC does not claim that Mr Vines failed to give reasonable notice for the purposes of subparagraph (a). The question is whether subparagraph (b) applies. Unless it does, the evidence is excluded by the tendency rule, regardless of whether it would be admissible as lay or expert opinion evidence under s 78 or s 79. 31 The issue under subparagraph (b) is whether the Court thinks that the evidence, either by itself or having regard to other evidence, would have "significant probative value". It is not enough, under the statute, to show that the evidence is relevant to a fact in issue. What is required is that the evidence "could rationally affect the assessment of the probability of the relevant fact in issue to a significant extent; that is, more is required than mere statutory relevance": Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171, 175-6 per Lehane J. This appears to mean something more than mere relevance but less than a "substantial" degree of relevance: Jacara, and 69, and cases there cited. 32 Senior counsel for Mr Vines drew an analogy between the expression "significant probative value" in s 97(1), and Deane J's discussion of the word "substantial" when used in s 45D of the Trade Practices Act 1974 (Cth), in Tillman's Butcheries Pty Ltd v Australian Meat Industry Employees Union (1980) 42 FLR 331, 348. I do not find his Honour's reflections on the meaning of a different word another statutory context to be helpful in the present case. Although the Australian Law Reform Commission in its report on Evidence, Report No 38 (1987) ("Final Report"), paragraph [175], proposed that the tendency provision should use a test in which the words "substantially and relevantly similar" would be used, rather than "significant probative value", there is nothing in the legislative materials to indicate that, in preferring the latter word, Parliament had in mind Deane J's exposition of the meaning of the word "substantial" in the Trade Practices context. 33 In the present state of the authorities, I agree with Sackville J's observations in Jacara, at 69: "I doubt that it is useful to attempt any more precise reformulation of the terms of s 97(1) of the Evidence Act [than Lehane J's formulation in Zaknic , quoted above]. The statutory language provides the standard that is to be applied and judicial statements as to the construction of the legislation cannot supplant that language: Ogden Industries Pty Ltd v Lucas [1970] AC 113 at 127, quoted in Brennan v Comcare (1994) 50 FCR 555 at 572, per Gummow J. Moreover, the statutory language incorporates a test which, although it will normally be applied before facts have been found, involves 'a degree and value judgment' having regard both to the evidence to be adduced and other evidence adduced or to be adduced: s 97(1)(b); Fleming v Hutchinson (1991) 66 ALJR 211. Indeed the tendency rule is framed in terms of whether the Court 'thinks' that the evidence would not have significant probative value." 34 Later on the same page, his Honour said: "Perhaps the only additional point that should be made is that the probative value of the evidence must derive from its tendency to prove (in the words of s 97(1)) that a person has or had a tendency to act in a particular way. As has already been noted, if the evidence has probative value for some other reason, it will not be rendered inadmissible by s 97(1), at least to the extent that it is tendered for a purpose other than its value as tendency evidence. The probative value of the evidence as tendency evidence must depend on the circumstances of the case. The facts to take into account would usually include the cogency of the evidence relating to the conduct of relevant person, the strength of the inference that can be drawn from that evidence as to the tendency of the person to act in a particular way and the extent to which the tendency increases the likelihood that the fact in issue occurred." 35 As counsel for ASIC pointed out, the facts of Jacara were significantly different from the facts before me now. In that case the evidence in contention was tendered to prove a tendency on the part of the agent of a shopping centre owner to make certain misrepresentations to induce the appellant to take a lease of premises in the centre. The evidence was not character evidence. It was evidence of the agent's conduct in making representations to five other prospective tenants. The trial judge excluded the evidence because he did not think it had significant probative value, and his decision was upheld on appeal. His Honour's statement of the factors to be taken into account is obviously directed to a "conduct" case, rather than a "character" case. 36 In my opinion, where the evidence is character evidence, the prospect that it will have a significant probative value in proving that the person had a tendency to act in a particular way or to have a particular state of mind, is if anything less than in a case where the evidence is evidence of conduct. The Australian Law Reform Commission identified some of the difficulties presented when character evidence is tendered to prove a tendency to act in a particular way, in its interim report on Evidence, Report No 26 (1985) ("Interim Report"). 37 There the Commission (at paragraphs 395-398) distinguished between reputation evidence and opinion evidence of character, quoting American authority critical of reputation evidence. The Commission then distinguished between non-expert and expert opinion evidence of character. As to non-expert opinion evidence of character, the Commission quoted the view of the New South Wales Law Reform Commission (Working Paper, Evidence of Disposition (1978) paragraph 2.11; see also Working Paper, The Course of the Trial (1978), paragraph 8.33) that statements of opinion should not be admitted "because opinion is unreliable unless supported by evidence of specific instances of conduct; if such evidence is available, it should be given and not the evidence of opinion". Reference was also made to the generality of opinion evidence as to character, and therefore its lack of probative value of a person's behaviour in a specific situation. As to expert opinion evidence of character, the Commission conceded that the advantages of receiving it would on occasion outweigh the disadvantages, and "adequate judicial control could be exercised via relevance determinations, rules controlling the admission of expert evidence and other rules controlling the situations and circumstances in which may be admitted" (Interim Report, paragraph 397). 38 Indeed, in its Final Report the Commission recommended that, except in the special criminal context to which Part 3.8 of the Act now applies, character evidence to prove a tendency to act in the particular way should not be admissible at all. The utility of character evidence in criminal cases is well established (for a recent discussion, see R v Ravindra [1997] 3 NZLR 242). But the Commission treated civil proceedings quite differently. 39 It appears from paragraphs 172-178 of the Final Report, and from paragraphs 394-404 the Interim Report, that the Commission sharply distinguished between character evidence relevant to the issues in the case, and conduct evidence relevant to the issues (distinguishing both of these from character and conduct evidence relating to the credibility of a witness). Thus, paragraph 175 of the Final Report was headed "Conduct evidence - Interim Report proposal", while paragraph 177 turned to the topic "Character evidence - Interim Report proposal". 40 In summary, the Commission said (Final Report, paragraph 174(a)): "The main proposal is a general rule excluding evidence, whether of character, reputation, conduct or tendencies, which is relevant to prove a person's tendencies. Exceptions are created for evidence of conduct and an accused's evidence of his own good character." 41 Section 97(1) departed from this recommendation in several ways. First, it articulates a "tendency rule" which is an exception to the general proposition that relevant evidence is admissible. Secondly, s 97(1) expressly contemplates that evidence of character or reputation, as well as evidence of conduct or tendency, may be admissible in a civil proceeding if proper notice is given, unless the court thinks that the evidence would not have significant probative value. The explanatory memorandum to the Commonwealth Bill, clause 97(1) (which was in the same terms as s 97(1) of the legislation as enacted in the Commonwealth and New South Wales) gives no explanation for these differences between the Commission's proposal and the Bill: see explanatory memorandum, paragraph 165. 42 It follows that, notwithstanding the Commission's recommendation, character evidence is admissible if the conditions set out in s 97(1) are satisfied. But the Commission's observations in its Interim Report as to the weaknesses and difficulties of character evidence identify some obstacles to the admissibility of such evidence which are germane under the statutory formula in s 97(1)(b). 43 In the present case, ASIC's case against Mr Vines has been pleaded extensively and in detail, and the Court will be asked to determine whether its detailed allegations have been made out on the facts. It appears from ASIC's evidence that the circumstances confronting Mr Vines in October-December 1998 were special in various ways. There was a relatively new chief executive officer for GIO. GIO was responding to a hostile takeover bid by AMP, and Mr Vines was extensively involved in GIO's defence. Mr Fox replaced Mr Robertson as Executive Director of GIO Insurance early in November 1998, although he remained involved in aspects of the administration of GIO Re. An important issue for GIO was whether to maintain an existing profit forecast for GIO Re, and GIO generally, in circumstances where a difference of views had emerged between Mr Robertson and Mr Schneider (who was in effect acting as GIO's internal actuary). 44 These and other circumstances might have influenced a reasonably prudent and cautious chief financial officer to behave atypically. There is a broad analogy at this level between the present circumstances and the circumstances described by Giles JA in Townsend v Townsend [2001] NSWCA 136, at paragraphs 77 and 78, where his Honour said that the evidence of behaviour on other occasions was "of such generality that little meaningful tendency was established". 45 General evidence of the character of Mr Vines, given by witnesses on the basis of their observation of him in contexts other than the context in which he is said to have failed to discharge his statutory duty of care and diligence, frequently at a later time than the events of the present case, is unlikely to establish any firm or concrete tendency to act carefully and diligently in the different and particular circumstances pleaded against him. Specifically, my opinion is that the evidence in the four witness statements would not have significant probative value with respect to the two facts in issue identified by senior counsel for Mr Vines, having regard to these differences. Section 135 46 Section 135 authorises the Court to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, or be misleading or confusing, or cause or result in undue waste of time. In my opinion, if the evidence in the four witness statements were admissible notwithstanding ss 76 and 97(1), it ought to be excluded under s 135. There would be a substantial danger that the evidence would be misleading because the witnesses have not placed themselves in the position confronted by Mr Vines in the detailed circumstances of the case, and that the exploration of their evidence would therefore cause or result in undue waste of time. Conclusion 47 The evidence in the four witness statements is inadmissible both under s 76 and under s 97(1). Were it not so, I would exclude it under s 135. 48 This decision is not intended to bear on the question whether character evidence might be admissible should the Court find the allegations against any defendant proven and then come to decide on the most appropriate orders. **********

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ASIC v Vines

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