Beslic v MLC Ltd

Supreme Court of NSW|2016-02-05|Before: Robb J

Judgment

The plaintiff in these proceedings is Mr Damian Beslic.
On 15 October 2004, the first defendant, MLC Ltd (MLC) issued to Mr Beslic a total disability income protection insurance policy under which MLC agreed to pay Mr Beslic a monthly benefit for the period in which he was totally disabled up to the maximum benefit period.
The second defendant, AXA Financial Planning Ltd, acted in effect as Mr Beslic's insurance broker for the purpose of advising him, and assisting him in completing the application form for the insurance policy issued by MLC. The employee of AXA who assisted Mr Beslic was Mr Woodward.
On 12 November 2005, MLC agreed to vary the policy by increasing the amount of the monthly payment to $10,493.09, following an application for that variation made by Mr Beslic.
Mr Beslic made a claim on the policy, and MLC made the monthly payment from 11 January 2009 until 9 October 2010. On 9 October 2010, MLC declined to make any further payments, and has pleaded in its defence that it has avoided the policy from its inception in accordance with s 29(2) of the Insurance Contracts Act 1984 (Cth).
The basis of MLC's defence is that Mr Beslic, in breach of his duty of disclosure under s 21 of the Insurance Contracts Act, falsely and fraudulently completed a number of responses in both his original application for the issue of the policy, and his later application for an increase in cover. It will be convenient to refer to the initial application as either the first application, or the 2004 application; and to the application for an increase in cover as the second application, or the 2005 application.

Claim against MLC

MLC's case is that Mr Beslic responded to a number of questions in his first and second applications in a manner that was false. MLC has concentrated on false responses to questions that elicited information concerning Mr Beslic's mental condition and history, but it also claims that he misrepresented his history of taking medication and his employment history.
MLC claims that, if Mr Beslic had answered the questions truthfully, it would not have issued the policy to him in the first place, and that MLC would not have agreed to increase the monthly benefit. If Mr Beslic had given correct responses in his second application, but not the first, MLC would have cancelled the policy.
MLC's case depends upon the proposition that, if Mr Beslic had given correct responses to the questions in the applications, that would have triggered an appreciation in the underwriters who processed his application that there was a medical underwriting issue that required special attention. In particular, the underwriters would have required Mr Beslic to provide additional information, including information from his treating general practitioner, and depending upon what information was received from that source, possibly also Mr Beslic's psychiatrist.
MLC has not served evidence of Mr Beslic's treating general practitioner or his psychiatrist as to what reports they would have made to MLC if at the time of Mr Beslic's two applications they had been requested with Mr Beslic's authority to provide responses to particular questions. Instead, MLC has relied upon the available evidence concerning Mr Beslic's medical history, including in particular reports made from time to time by treating psychiatrists. The essence of MLC's case is that the court may infer, based upon the actual medical history, what the relevant doctors would have reported had they been asked to do so at the time. This approach is based upon the assumption that the doctors would have given reports consistent with their knowledge as shown by the actual medical history.
As Mr Beslic has put it in his submissions, MLC through its underwriting witnesses seeks to establish a counterfactual. That is, it seeks to prove what it would have done in the hypothetical circumstance that Mr Beslic had responded to the questions in the applications differently, and correctly.
The provision of that counterfactual evidence necessarily involves a number of steps which include: what the relevant underwriters would have done if Mr Beslic had responded to the questions correctly; where the underwriters would have sought additional information; assumptions as to what additional information would have been provided; and what the underwriters responses would have been to that additional information.

The common exhibit

Before I consider the general, or in principle, objections that Mr Beslic has made to the evidence of MLC's underwriting witnesses, it will be convenient to consider a common feature of the way in which those witnesses' affidavits have been prepared.
The basis upon which MLC's underwriting witnesses prepared their affidavits is relevant to a number of the general objections made by Mr Beslic to the admissibility of their evidence.
Each of the six witnesses whose affidavits are listed in par 1 of Mr Beslic's notice of motion stated in his or her affidavit that he or she "had regard in the course of preparing this affidavit" to a bundle of documents that was exhibited. The documents in the exhibit are the same in each case.
As I have said above, the underwriting witnesses were not asked to respond to assumptions as to the additional information they would have received if MLC had made further enquiries; for example, of Mr Beslic's treating doctors, if he had disclosed to MLC the information MLC claims he should have disclosed. Instead, all of the witnesses were provided with a substantial number of documents, many of which post-dated the times when MLC issued the policy and later increased the amount of cover. In a number of respects the documents contained information that would not have been available to the witnesses, at the times they were involved in the decisions made by MLC.
As I have said, each of the witnesses said in his or her affidavit that he or she "had regard" to the documents. The expression "had regard" is inherently uninformative. It positively suggests that the witness took all of the documents into account, but says nothing about how the witnesses used the information in the documents for the purpose of preparing their evidence.
There were 21 categories of document. It is appropriate to set out the description of those documents, as contained in each of the affidavits, and to indicate the relevant contents of the documents when necessary. I have read all of the documents (to the extent that they are legible). However, the information in the documents is so extensive that it is only feasible for me to set out the most significant parts of the documents. I have approached the documents from the perspective that I should identify the parts of the documents that may be significant for the purposes of deciding whether the manner in which the witnesses' evidence was prepared provides a proper basis for the rejection of the tender of the evidence. I have not, of course, attempted to determine in a positive way what the significance of the information in the documents is to the credibility of the evidence given by the witnesses.
The following is the description of the categories of document in each of the exhibits that is contained in the witnesses' affidavits: (1) MLC's underwriting file in this matter which comprises of the following: (a) form dated 5 October 2004 (First Application); (b) First Underwriting Requirements form dated 11 October 2014; (c) Personal Protection Portfolio - Benefit Illustration dated 12 October 2014; (d) MLC Insurance - Outstanding Requirements dated 12 October 2004; (e) Document titled "Authority Level 3" (undated); (f) Application form dated 13 September 2005 (Second Application); and (g) underwriting file notes from 11 October 2004 to 27 January 2006 (underwriting file notes). (2) Underwriting Worksheet - Analysis of Non-Disclosure and Misrepresentation prepared by MLC's Glenn Freeman on 17 November 2010. (3) email correspondence between Glenn Freeman and MLC's Linda King of 31 May 2011 and including MLC internal email dated 19 July 2007, MLC underwriting guidelines, undated, and (sic) and file note dated 7 June 2004, all attached to the email from Mr Freeman dated 31 May 2011. (4) Records of Dr Todorovic. (5) Email from Linda King to Dr Sokolovic dated 19 May 2011. (6) Letter from MLC to Dr Sokolovic dated 6 October 2010. (7) Letter from MLC to Dr Sokolovic dated 20 August 2010. (8) Letter from MLC to Dr Sokolovic 6 May 2010. (9) Hand written note by Damian Beslic dated 14 July 2010. (10) Letter from MLC to Dr Sokolovic dated 28 May 2010. (11) Letter from Damian Beslic to Dr Sokolovic dated 17 December 2010. (12) Letter of referral from Dr Javen dated 19 February 2004. (13) Letter from Dr Todorovic to Dr Sokolovic dated 30 June 1998. (14) Report of Dr Sokolovic to MLC dated 24 April 2011. (15) Report of Dr Sokolovic to MLC dated 20 September 2010. (16) Report of Dr Sokolovic dated 25 July 2004. (17) Letter of referral from Dr Oreb to Dr Sokolovic dated 2 October 2001. (18) Records of Dr Kecmanovic. (19) Records of Dr Oreb. (20) Medicare and PBS records. (21) Document entitled "Medical Records Summary".
Category (1) contains, as its description suggests, documents from MLC's underwriting file. It includes documents relating to both the issue of the policy and the increase in the benefit. Of particular significance is a three page document that contains line items that record, in a very compressed way, steps taken by officers of MLC in making the two underwriting decisions. Some of those line items identify the person who took the particular step. The witnesses have referred to this document as the "underwriting file notes".
Category (2) is called "Underwriting worksheet - analysis of non-disclosure and misrepresentation". It is a form that makes provision for the insertion of information relevant to a determination of how MLC should respond to a non-disclosure or misrepresentation. All items on the form are blank, except for the heading "decision". That has been completed by Mr Glenn Freeman, who apparently was MLC's Technical Support Manager, Products & Services. Mr Freeman wrote on 17 November 2010: It is clear that had underwriting been advised of his history of mental health problems both applications would have been declined. He would not (sic) been offered a contract on any basis.
Category (3) contains an internal MLC email chain on 31 May 2011. Mr Freeman was asked to provide a supplementary opinion, as to the steps that MLC would have taken, if it had received a copy of the Fourth October Email. Mr Freeman replied: Having been notified that a psychiatrist had been consulted recently underwriting would have asked the applicant to complete a Mental Health Questionnaire and once the Psychiatrist details were available we would have requested a report. Our practice is to obtain a medical report when we are underwriting mental health conditions. The only exception is where the history is sufficiently detailed to allow the underwriter to accept the application at standard rates. In this particular case the brief description provided would not have been ignored.
This information, which was provided by a person who I infer was a senior officer of MLC, was a statement of what MLC would have done in 2004 and 2005, and what the relevant practices then were.
The category also includes an internal email dated 19 July 2007, which appears to have been circulated to many officers of MLC, by the then National Technical Manager MLC Products & Services. The email said: Quite a while ago John Leonard made a decision that where ever a history of mental illness was disclosed a report was to be obtained. It would appear that not everyone is aware of this. Please take this as a specific written instruction that you must write for a medical report wherever there is a history or current conditions of mental illness.
This email suggests that MLC believed that not all of its underwriters were aware of the standing practice that required a report to be obtained wherever an applicant disclosed a history or current conditions of mental illness.
The category also contains a MLC Underwriting Guideline entitled "Depression, Anxiety, Nervous Disorders". It states that the document contains MLC's approach to the assessment of insurance applications where there is current or a history of depression, anxiety, stress or other nervous disorder. It says that the document is a guideline only, and the individual circumstances of each case must be considered in determining the final underwriting decision. It deals with ratings for Income Protection and TPD. It deals separately with "Current symptoms and/or treatment" and "In history - treatment ceased, no further problems". The guideline for current symptoms distinguishes between symptoms that are "Mild/Moderate" on the one hand and "Severe" on the other. Severe cases are always to be declined. Where the symptoms are Mild/Moderate, cases of a single episode are to be considered if certain criteria are met. If they are not met cover will usually be declined. In cases where there are recurrent mild or moderate episodes within the last 12 months, the guidelines suggest that cover should be declined. The document suggests that, in cases of current symptoms which are mild with adequate treatment, the standard premium should be applied. In cases with moderate symptoms and adequate treatment, a loading of 50% should be applied.
Category (3) also contains a detailed document called "Rating severity". It says: Swiss Re Life & Health Global Underwriting Manual defines degrees of severity as follows: Mild Tendency to depression with or without psychosomatic reactions. Primary care by own doctor, never referred for specialist psychoanalyst, counselling or psychiatric treatment either on an out, or in-patient basis. Several favourable features present. No time off work. No behavioural abnormalities or physical illness. No apparent environmental stress factors persisting. No ECT or lithium. Moderate Occasional depression but with satisfactory response to treatment. Referred for specialist psychotherapy on an outpatient basis, but never as an in-patient. Infrequent disabling attacks causing no more than 1-2 weeks off work on any one occasion. No apparent environmental stress factors persisting. No ECT or lithium. Severe Recurring or deeper depression for which in-patient care may have been necessary. Several unfavourable features and few, if any, favourable features. Disabling episodes causing more than 2 weeks off work. Persisting work, social or domestic problems. May have been given ECT or lithium but in this case will have a formal diagnosis of major depression or bipolar affective disorder. [There is then an instruction as to what should be done where there is no formal psychiatric diagnosis of major depression or bipolar disorder. It is imperative to take note of any favourable or unfavourable features, and then a list of favourable and unfavourable features is given]. The evaluation of stress-related depression is most important for the disability underwriter.. A doctor's report may make reference to stress or depression precipitated by events, but with little other detail… This may be a benign situation; however, an underlying chronic depressive disorder could exist. In such cases the medical report and the overall picture should be reviewed carefully…
The final document is called "Mental Health Update 7/6/2004". It sets out the criteria that must be met where an exclusion may be considered for mental health.
It will not be appropriate for the court to speculate as to how the Underwriting Guideline should have been applied in Mr Beslic's case. Superficially, it appears Mr Beslic's symptoms probably fell outside the severe category. As he was treated on an outpatient basis by a psychiatrist, his symptoms appear to fit most naturally into the moderate category, although it is not clear that he was not suffering from mild symptoms.
The significance of the documents in Category (3) is that they appear to support a finding that, if MLC conscientiously applied its Underwriting Guideline, the decision as to how to respond to Mr Beslic's applications was not a straightforward one, and required a reasonably sophisticated analysis of his precise circumstances.
Categories (5) to (8) are communications over the period 6 May 2010 to 19 May 2011 by MLC to Dr Milorad Sokolovic, who was Mr Beslic's treating psychiatrist around the time he made his applications to MLC, concerning expert opinions requested by MLC. Category (10) is another such document, dated 28 May 2010.
Categories (9) and (11) are documents written by Mr Beslic, which probably would not have significant influence on any reconstruction by the underwriting witnesses of their underwriting decisions.
Categories (14) and (15) are reports made by Dr Sokolovic to MLC on 20 September 2010 and 24 April 2011. They contain relatively detailed opinions by Dr Sokolovic concerning Mr Beslic's medical condition at the time of the reports, and also Mr Beslic's psychological history. The first of the reports contains the following statement: At his last appointment at this office on 20 July 2004, before the writing of the report, Damien asked numerous questions about the nature of his mental problems, and inquired explicitly as to whether or not he was mentally ill. In answer to his questions, Damien was informed that though his parents' discordant relationship, his exposure to wartime stressors and migration as a refugee have led to the development of an avoidant personality traits and psychosocial dysfunction, it was not appropriate to classify him as mentally ill. He was informed that his symptoms were a result of maladjustment and socially reactive problems. The revelation of his lack of actual mental illness had an obvious positive effect on Damien. He did not attend his next schedule appointment and was not seen again for several years.
Dr Sokolovic observed, in his second report to MLC, regarding Mr Beslic's condition in 2004: On the basis of clinical judgment, Damien was labelled as having an adjustment problem of the person, personally disordered, and suffering from reactive anxiety and depression with existential problems.
The doctor also said in his later report, in relation to the way in which Mr Beslic had filled out his application form to MLC: As part of his therapeutic treatment, it was made clear to Damien that he was not mentally ill. It is possible that he was under the influence of this statement when he made his answer to that question. I do not have access to the questionnaire, but from your letter I believe that in a reasonable state of mind Damien should not have and said 'yes', however, given his personal characteristics, I can understand and I am not surprised that he answered as he did. In fact, his answer to this question serves as further evidence of his personality problem.
Again, it is neither necessary nor appropriate to draw any particular conclusions from these reports, but it does seem that Dr Sokolovic was of the view in 2004, and so advised Mr Beslic, that Mr Beslic did not have a mental illness, but that he had an adjustment problem, and was suffering from reactive anxiety and depression in response to his existential problems. When this is considered in conjunction with the contents of the Underwriting Guideline, it tends to confirm the observation that I have made above that MLC's reactions to Mr Beslic's applications should not have been an entirely open and shut matter.
Category (16) is a report addressed by Dr Sokolovic "To Whom It May Concern" dated 25 July 2014. Its apparent purpose was to explain Mr Beslic's psychological condition in a way that may persuade authorities with whom Mr Beslic had to deal to treat him in a way that took into account the difficulties that he had faced in life. Dr Sokolovic referred to psychiatric appointments with Mr Beslic on 24 July 1998, 21 November 2001, 11 January 2002, 12 March 2004 and 20 July 2004. The doctor's report included the following: On 12 March 2004, Damir requested a psychiatric appointment. Damir's presenting mental condition was worse than on previous appointments. He continued to complain about his difficulties in interpersonal relations in addition to difficulties generally at work. He also mentioned that he was made redundant some time before this appointment, but he believed that his loss of work was due to his employer's lack of tolerance for him… Since this appointment, Damir has attended regular psychiatric follow-up, and has been compliant with his treatment of antidepressant and anxioytic medical and supportive and cognitive therapy; however, his symptoms have only marginally improved. On his last appointment of 20 July 2004, Damir's mental condition appeared significantly worse. His mood was significantly depressed and his pessimist was compounded with suicidal ideation. He felt totally isolated, especially since his mother and sister have left Australia and returned to Bosnia…
MLC submitted during the hearing that it was reasonable to assume that, if MLC had asked Dr Sokolovic for a psychiatric report concerning Mr Beslic soon after he made his initial application for disability insurance, the doctor would have provided a report that was highly consistent with his 25 July 2004 report. That is an appropriate assumption for the court to make. However, it does not follow that Dr Sokolovic would have couched his report to MLC in the same language that is used in his 25 July 2004 report, which was directed at attempting to facilitate unidentified authorities treating Mr Beslic in a sympathetic way. If all of Dr Sokolovic's reports are considered together, it is clear that the doctor did not consider that Mr Beslic had a mental illness. He did suffer from a level of depression and anxiety, which apparently were relatively acute in July 2004. It is likely the doctor would have tailored his response to the particular questions asked by MLC. Dr Sokolovic's 25 July 2004 report is not a completely adequate substitute for evidence that the doctor could have given at the time of Mr Beslic's application for insurance in response to particular questions from MLC.
Category (18) is a report from Dr Dusan Kekmanovic dated 3 May 2011, in which he primarily summarised his experience of treating Mr Beslic on dates between 1993 and 1998. He said: "Mr Beslic has suffered from anxiety and depression that might be accounted for by difficulties he has had to adapt to a new social and cultural milieu".
I will not attempt to summarise the balance of the categories. A considerable part of these documents consists of doctors' notes that are difficult to read, or Medicare and PBS records the significance of which is unclear.

Four objections in principle to MLC's underwriting evidence

Mr Beslic made four objections that were described as "in principle objections" to MLC's underwriting evidence. They were: 1. The evidence is not relevant within the requirements of ss 55 and 56 of the Evidence Act. 2. The evidence is inadmissible opinion evidence under ss 76, 78 and 79 of the Evidence Act. 3. No basis is given in the evidence for the opinions expressed. 4. The evidence should be excluded under s 135 of the Evidence Act, because its probative weight is substantially outweighed by the danger that the evidence might be unfairly prejudicial, misleading or confusing.

The relevance objection

Mr Beslic developed his relevance objection in the following way. The evidence is directed towards proof by MLC that, if Mr Beslic had complied with his duty of disclosure under s 21 of the Insurance Contracts Act, MLC would not have issued the policy within the meaning of s 29(1)(c) of that Act, so MLC was entitled to avoid the policy under s 29(2), because Mr Beslic's nondisclosure was fraudulent. Mr Beslic described the evidence as being evidence to establish a counterfactual - that is, what MLC would have done if Mr Beslic had disclosed what he was required to disclose.
Mr Beslic submitted that, for the counterfactual evidence to be relevant, MLC was required to call evidence from the underwriter who had the responsibility for making the decision as to whether or not to enter into the contract of insurance. He submitted that MLC's evidence did not identify who actually made the decision to enter into the policy. The evidence given by the underwriting witnesses did not show that any of them made the decision.

Is the underwriting evidence irrelevant?

MLC has served affidavits of senior underwriters who assert that, at the relevant times in 2004 and 2005, MLC's underwriting procedures did not involve a single underwriter being responsible for, and having the authority for, processing the whole of MLC's response to an application for insurance, or an increase in cover, and for deciding whether or not MLC should accept the risk, or the increase in risk. Instead, MLC had a pool of about 20 underwriters in its Sydney office who had varying levels of experience and authority. MLC's practice was that, in order to process the next step required by a particular application, the file would be distributed for action by the next underwriter who became available, in an order whereby files with the longest outstanding steps would be distributed first. This procedure was apparently adopted to ensure that all files would be processed as expeditiously as possible. If it happened that a file was distributed to an underwriter with inadequate authority, there were protocols in place for the relevant underwriter to obtain confirmation of that particular proposed step in the underwriting process from another underwriter who had the requisite authority.
This evidence was given in the affidavit of Mr John Leonard, who was at the relevant times the Chief Underwriter at MLC, in pars 4 to 8 of his 19 November 2015 affidavit. Similar evidence was given in par 2 of the second affidavits of Ms Tracy Peterson, Ms Janet Kennerley and Ms Terese Norman sworn or affirmed on 25 November 2015, 26 November 2015 and 22 December 2015 respectively.
As I have recorded above, Mr Beslic submitted that the evidence of MLC's underwriters, whereby they stated what they would have done in relation to a particular step that they in fact performed in MLC's underwriting process in response to Mr Beslic's applications, if Mr Beslic had disclosed additional information to MLC, is irrelevant because the only relevant counterfactual evidence can be given by the underwriter who processed Mr Beslic's applications, and made the decision on MLC's behalf to grant the applications.
I do not accept Mr Beslic's submission that, what he called counterfactual evidence, can only be given where there happens to be a single underwriter with full responsibility for the file, and it is that underwriter who gives the counterfactual evidence.
Section 56 of the Evidence Act provides that, generally, evidence that is relevant in the proceeding is admissible in the proceeding, and s 55(1) of the Evidence Act has the effect that evidence is relevant if it could, if accepted, rationally effect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. That being the case, the nature of the evidence that is relevant to a determination of the probable outcome of a particular administrative process within an organisation will depend upon the nature and manner of operation of the process.
The evidence given by MLC's witnesses is capable of establishing that MLC had an administrative process that would always lead to a decision to reject an application or accept it, or accept the application on conditions. The process did not involve a single underwriter. The process consisted of a number of steps which had to be completed in a way that in aggregate, led MLC to adopt one of the available outcomes. Some steps may have been conditions to the application proceeding to later steps, and other steps may have required additional steps to be taken, before the application could proceed. In either case, individual underwriters processed applications at each step, by implementing a system that insured that there was authority for each step to be processed. If each step was processed with a positive outcome, the ultimate result would be for MLC to accept the application, or to do so on conditions. If the outcome was not positive, the application would be rejected. This process was effective without an individual underwriter having sole responsibility and authority for the application.
It follows that the sort of counterfactual evidence that Mr Beslic accepted could be given, in cases where there was a single underwriter with authority to accept the risk, will be admissible in relation to the administrative process adopted by MLC, subject to the qualification that the nature of the counterfactual evidence that will be admissible will be different, and probably more limited, by reason of the fact that individual underwriters only have a limited and contingent role in relation to the individual steps in the process.
A material consideration identified by Ms Peterson and Ms Kennerley in their affidavits is that, if the provision of different information by Mr Beslic as part of his application had led individual underwriters to take additional steps that were not taken (in particular requesting further information from Mr Beslic, his general practitioner, or treating psychiatrists), the receipt of that information by MLC, at some later time, would have the result that MLC's administrative process for distributing files to the next available underwriter might have meant that the underwriter who took the next step (and may have given evidence of that next step in an affidavit in these proceedings) may not in fact have been the underwriter who took that step.
As I understand the effect of this evidence, individual underwriters who in fact processed steps in Mr Beslic's applications up to the point where a different course would have been taken, if Mr Beslic had given different information, will be able to give counterfactual evidence limited to what they personally would have done, had Mr Beslic given that different information, in relation to the particular step that may have led to a different outcome. It is then necessary to make an assumption of fact as to what would have occurred if Mr Beslic had provided the different information. That will lead to a new step in MLC's administrative process, but it cannot be assumed that the underwriter who in fact took that next step in Mr Beslic's actual application would have done so. MLC's process of distributing the file to the next available underwriter would have been implemented. So far as the evidence can now establish, all of MLC's 20 underwriters in its Sydney office would have had an equal chance of being given the file in order to implement the next step to take into account the new information that has been assumed.
If that process of reasoning is true, then no underwriter witness will be able to give counterfactual evidence on the basis that he or she would have been that witness who actually implemented the next step. The most that each witness can do is to say, on a counterfactual basis, what they would have done if they were in fact the underwriter to whom the file was distributed.
In my view, that limitation in the nature of the counterfactual evidence that MLC's underwriter witnesses can give does not make the evidence irrelevant. It has less probative value than if it were clear that the witness giving the counterfactual evidence would have been the underwriter who implemented the step. The probative value of the evidence is reduced because it is really only evidence of a chance of what would have happened, if the particular witness had received the file. The inherent susceptibility of counterfactual evidence would be magnified by the consideration that there is a chance that the witness may well not have taken the next step. The overall cogency of the evidence may depend upon the extent to which equivalent counterfactual evidence is called from all of the underwriters who had a chance of the file being distributed to them.
However, even if equivalent counterfactual evidence is not called from all of the underwriters, it does not follow that the evidence is irrelevant. It is a matter that goes to the weight of the evidence. That is particularly so because the effect of the evidence may need to be considered in the context of the whole of the evidence, including evidence of such matters as the formal operating procedures adopted by MLC, and the steps taken by MLC to train its underwriters to act in accordance with established underwriting practices.
One effect of the process adopted within MLC for assessing applications is that each underwriter who was employed at the time of the 2004 and 2005 applications will have had a chance of the file being distributed to that underwriter, if additional information had been obtained by MLC as a result of enquiries made following the initial consideration of the contents of the applications. The counterfactual evidence of a particular underwriter would not be irrelevant by reason of the fact that that underwriter did not actually take part in the consideration of a particular application, provided the underwriter was employed at the time of that application.

The opinion objection

Mr Beslic suggested that the underwriting witnesses expressed two types of opinion. The first was described as being evidence of the form: if Mr Beslic had disclosed X, Y and Z, I would have done A, B and C, because of my usual practice and/or MLC's guidelines. The second took the form that underwriters at MLC (being underwriters generally, and not the witness) would have done A, B and C, if Mr Beslic had disclosed X, Y and Z.
Mr Beslic submitted that the opinion evidence is inadmissible under s 76 of the Evidence Act, unless it falls within ss 78 or 79 of that Act.
He submitted that the underwriters' evidence is not state of mind evidence, as may be admissible under the principles discussed in Seltsam Pty Ltd v McNiell [2006] NSWCA 158; (2006) 4 DDCR 1 at [112] to [124]. Mr Beslic's basis for this submission appeared to be that Seltsam shows that state of mind evidence has relatively little probative value, because "the insurer logically doesn't want its underwriters' evidence to be only admitted on that low…threshold" (T 29), and MLC wants the evidence to go in as an opinion, because its probative value will be greater if "it is the product of the application of specialised knowledge to a set of circumstances" (T 30). Mr Beslic expressly suggested that MLC was trying to "slide…through" state of mind evidence as opinion evidence (T 30). Mr Beslic nonetheless submitted that the underwriters' evidence is not state of mind evidence. See also T 33.
Mr Beslic's submission does not appear to be based on the inherent evidentiary effect of the evidence, but on the proposition that the court should take MLC to be submitting the evidence as opinion evidence (with high probative value), because if it was only submitted as evidence of state of mind, then only low probative value could be attributed to the evidence. That is a novel approach to the characterisation of evidence.
Mr Beslic's "fall back" was that, if the underwriters' evidence is admitted, it should only be admitted as evidence of the individual underwriters' own state of mind.
Mr Beslic submitted that the underwriters' evidence could not be admitted as evidence of lay opinions, under s 78 of the Evidence Act, relying upon Lithgow City Council v Jackson [2011] HCA 36; (2011) 244 CLR 352. I accept this submission, and will not say anything further on the issue.
Mr Beslic submitted that admissibility under s 79 of the Evidence Act requires that the person giving the evidence has specialised knowledge, based on the person's training, study or experience, and that the opinion of that person is wholly or substantially based on that knowledge. He submitted that the evidence took the form of an opinion as to what the witness or other underwriters would have done, if they had had particular information, and a person cannot have specialised knowledge by education, training or experience as to how that person, or some other persons, would have acted in particular circumstances. That is a matter of conjecture or speculation. Legitimate opinion evidence may have been able to be given, if it was evidence of what a reasonable underwriter would have done in particular circumstances with particular information. That was not, however, the nature of the evidence in the underwriters' affidavits.

State of mind or opinion evidence?

As I understand it, Mr Beslic has used the expression "state of mind evidence" to refer to counterfactual evidence of the form: I understood A so I did X, but if I had understood B I would have done Y, for the following reasons.
Mr Beslic submitted that MLC's underwriters' evidence, where it appeared to give evidence in that form, was really being tendered as expert opinion evidence, as to what the particular witness would have done.
I do not accept Mr Beslic's submission that the court can conclude that the evidence is opinion evidence, rather than state of mind evidence, because MLC, for forensic reasons, would prefer that outcome because opinion evidence is essentially more probative than state of mind evidence. First, in my view, the court has to take the evidence as it finds it, and to characterise the evidence on the basis of its form and content. The forensic preference of the party tendering the evidence cannot be material, and the party cannot tender evidence on a basis that the evidence cannot sustain, simply because it would be more probative on that basis.
In Seltsam, Bryson JA, with whom Handley and Tobias JJA agreed, said in relation to the admissibility of evidence relevant to causation of physical injury, where the respondent to the appeal, who gave evidence of gathering up material with his hands, when asked what he would have done if there was a warning that the material contained fibro sheeting said "I would never have used it": [114] The appellant contended on appeal that this evidence was inadmissible as opinion evidence for the purpose of Evidence Act 1995 (NSW) s 76 but not satisfying the requirements for admissibility of opinion evidence under ss 77, 78 and 79 of the Evidence Act. (Indeed it does not fall within ss 77, 78 or 79). [115] Where the state of a person's mind is a relevant fact, there can I think be no doubt of the admissibility of evidence by that person about the state of his mind. I see no room for a supposition that such evidence is opinion evidence. It is a commonplace for a person to give evidence about what his state of mind would have been in some contingency which did not happen; for example, that if he had known some fact, he would not have decided to act as he actually did. In any case where the absence or the terms of a warning is said to show negligence I find it difficult to suppose that the evidence of a person complaining about the warning would conclude without that person's being asked what effect a warning would have had, whether by that person's own counsel or in cross-examination. [116] In Hoyts Pty Ltd v Burns (2003) 77 ALJR 1934 Kirby J at 1941 [40] and [41] narrated the events, in a case where the absence of a warning sign was said to show negligence, in which the Trial Judge raised the lack of evidence about the subject. The plaintiff's evidence on the subject, including cross-examination, is set out in the judgment of McHugh J. and others at 1936-1937[13]. The Trial Judge concluded that the plaintiff was mistaken in her evidence about the effect of a warning notice. Kirby J. said (at 1943 [54]): [54] It is important to remember that the evidence on this point was only introduced because the primary judge called the suggested evidentiary omission to notice. Both trial counsel for the respondent and, later, trial counsel for the appellant protested that the "evidence" about what would have been done if a sign had been displayed was a matter of "speculation". So indeed it was. Whether or not, strictly, such evidence is admissible, it is commonly received in Australian courts (Chappel v Hart (1998) 195 CLR 232 at 272-3 [93.7]; 156 ALR 517 at 547-8; Rosenberg v Percival (2001) 205 CLR 434 at 483-7 [153]-[159]; 178 ALR 577 at 615-18; Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 572). Presumably this practice emerged once it was established that the relevant test of causation applicable in Australia was a subjective one… Nevertheless, the evidence of what a claimant would have done if a non-existent warning had been given by a hypothetical sign is so hypothetical, self-serving and speculative as to deserve little (if any) weight, at least in most circumstances (A point made in Ellis (1989) 17 NSWLR 553 at 582 per Samuels JA; cf at 560; Chappel (1998) 195 CLR 232 at 272 [93.7]; 156 ALR 517 at 547-8; Rosenberg (2001) 205 CLR 434 at 486 [158]; 178 ALR 577 at 617). [117] In my opinion the observations of Kirby J. and the decisions to which his Honour referred show that, notwithstanding concerns about the value of such evidence and the weight to be accorded to it, there is a well-established practice in Australian courts of admitting such evidence. If the evidence is admitted, its weight remains to be addressed by the court, as Judge Duck observed during argument on the objection (Black 12). However the weight to be accorded to it is a question of fact, which must be addressed later than the admissibility of the evidence, to which Ground 7 is directed. [118] In All State Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 5) (1996) 64 FCR 73 Lindgren J. ruled on objection to passages in an affidavit of a witness who gave evidence of the effect which would have been produced, if he had known some details about guarantee liabilities, on a recommendation he made relating to an investment. As well as stating that he would not have made a recommendation in the circumstances, the passage under objection went on to state the considerations which would have caused him not to make the recommendation. In support of the objection it was contended that the statement in the affidavit was opinion evidence under the general law of evidence and was rendered inadmissible by s 76 of the Evidence Act (Cth) which is in the same terms as s 76 of the Evidence Act (NSW). In Lindgren J.'s view the passage under objection did not express an opinion to which s 76 applied. Lindgren J. observed (at 76) to the effect that there were no authorities dealing squarely with the objections raised, but went on to review a number of decisions, including decisions of this court, to which he had been referred. Lindgren J. said at 75-76: The expression "opinion" is not defined in the Act. In the context of the general law of evidence, "opinion" has been defined as "an inference from observed and communicable data": Wigmore on Evidence, J H Chadbourn (ed), Little, Brown & Co, 1978, vol 7, s1917; and see J D Heydon, Cross on Evidence, 5th ed, Butterworths, Sydney, 1996, para [29010], p 782; Australian Law Reform Commission, Interim Report on Evidence, ALRC 26, 1985, vol 2, para 96, pp 168-9. The origin of the courts' aversion to evidence of opinion is in the common law's concern to receive the most reliable evidence; cf Cross, supra, para [29001], p 781. One might be excused for thinking that often the most reliable evidence, and certainly the most obvious evidence, of what a person would have done if facts had been different from what they were, would be that person's own evidence on the matter. Paragraph 27 does not state an inference drawn or to be drawn from observed and communicable data. It purports to be "direct" evidence from the person uniquely placed to give it, of what that person would have done in a hypothetical situation. This is not "opinion" of the kind against which the general rule against the admissibility of evidence of opinion is directed. In one sense there can never be "direct" evidence of what a person would have done in a situation different from that which occurred. But where that is what is to be proved, the person in question is better qualified than all others to give evidence on the matter. To exclude his or her evidence would be to exclude the "most direct" evidence available. … [119] Lindgren J. pointed out with care (at 78) the distinction between admissibility and weight. Lindgren J. referred to several decisions which, while not dealing directly with the question whether evidence of the kind under consideration is opinion evidence, clearly showed contemplation that evidence of that kind is admissible; and in some circumstances courts have expressed views which seem to show that they regarded the tender of such evidence as desirable… [120] In Hughes Aircraft Systems International v Airservices Australia (No 3) (1997) 80 FCR 276 Finn J referred to and followed the decision of Lindgren J. in All State Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 5), as a matter of comity. … [122] I do not think that this Court should depart from what I regard as an established state of opinion in the Federal Court on cognate legislation unless there are clear grounds for concluding that those decisions were wrong. I would respectfully say that my reluctance is enhanced by the reputation and standing of Lindgren J. and of Finn J. as well as by the number of instances including decisions in this Court, in which evidence generally of this kind has been treated as admissible, or its absence has been adversely commented on, although without examining whether s 76 relating to opinion evidence was applicable. [123] At the heart of the controversy, I do not find it possible to see evidence given by a person about his state of mind, in an actual or hypothetical situation, as an opinion. The state of a person's mind is a fact and remains a fact whether what is under the discussion is an actual state of mind, or the state in which a person's mind would be in some contingency which has not happened. The strongest theme of dissatisfaction with such evidence is its lack of reliability because of its self-serving nature, given as the evidence is when it is known with hindsight that the subject is of importance to the party who gives the evidence. This source of dissatisfaction is not in my opinion a reason in principle for rejecting the evidence; if it is relevant it is admissible, and this source of dissatisfaction is to be met by taking appropriate care in deciding whether the evidence is to be believed, which remains a decision of fact. One point at which endeavours to examine such evidence in terms of its being an opinion fails is the difficulty of saying what is the area of expert knowledge to which the opinion relates. It is not possible to define that area of expertise in relation to evidence given by any particular party about what he would have done in stated circumstances, and it is not possible to suppose what study or knowledge might equip a person to give an opinion about it. Although "opinion" is not defined in the Evidence Act, and as a concept in the general law of evidence cannot be exhaustively defined, it is my view that the word "opinion" where it appears in s 76 does not include evidence of this kind. [124] In my opinion Judge Duck was not in error in admitting the evidence. If disposition of Ground 7 were necessary for disposition of the appeal, I would not uphold it.
In my view, the decision of the Court of Appeal in Seltsam establishes that evidence given by a particular person as to what that person would have done in a hypothetical situation that did not actually occur is not opinion evidence, and may better be described as evidence going to that person's state of mind. For convenience in what follows, I will describe evidence of that type as Seltsam evidence. Evidence of that kind can be given even where the hypothetical change in circumstances is not simple and where the person has a binary choice, to act one way or another in response to a single new input. Evidence can be given where the witness must hypothesise as to what the witness would have done based upon a complex set of contingencies. In this case while the witness may give evidence that in fact draws upon specialised knowledge that the witness has based upon the witness' training, study or experience, the evidence is not opinion evidence. While it may be unreliable because it is a retrospective hypothesis, that does not make it inadmissible.
Evidence will be opinion evidence if it is an assertion about what others would have done in the hypothetical circumstances, or what reasonable persons would have done in those circumstances.

The basis of opinion

This objection is based upon the evidence given by all of the underwriting witnesses that they "had regard in preparing [their] affidavit[s]" to all of the documents in the 21 categories in the exhibits to their affidavits. Mr Beslic submitted that the witnesses did not identify the assumptions upon which any opinion they expressed was based; rather they expressed an opinion based upon all of the documents in the 21 categories, including a great many documents that were not in existence at the time the policy was issued or the cover increased. If Mr Beslic had made the disclosures that MLC says he ought to have made, then MLC could have sought additional information from Mr Beslic, or from relevant medical practitioners. If the underwriting witnesses are entitled to give opinion evidence, they should have been given assumptions as to what further information would have become available if they had made additional enquiries. Instead, without explanation, the witnesses relied upon all of the records produced by Medicare and the Pharmaceutical Benefits Scheme; the medical records of treating doctors; ex post facto reports of treating doctors; MLC's own enquiries of those doctors; and internal records produced at the time MLC purported to avoid the policy, which asserted that the policy would not have been issued, or the cover increased, if Mr Beslic had made the relevant disclosures.
Mr Beslic said that it may have been permissible if, notwithstanding that each of the underwriting witnesses had been given all of the documents in the exhibit, they had carefully identified the particular information that they assumed to be true, as the basis for forming their opinions. However, they have not done that (including in the second tranche of affidavits that were prepared in the knowledge that Mr Beslic was challenging the admissibility of the evidence); which has the result that neither Mr Beslic nor the court has evidence that identifies the assumptions of fact upon which the witnesses' opinions were based. It is implicit in Mr Beslic's submissions that, in these circumstances, he should not have to cross-examine the witnesses concerning the validity of their opinions, where he does not have the starting point of the identification by the witnesses of the assumptions upon which they relied.
As I have held that the Seltsam evidence is not opinion evidence, this submission strictly must fail.
However, there is a basis for arguing that an equivalent submission is available where a person gives evidence as to what that person would have done in a hypothetical situation, which involves a change in the circumstances that led to the person actually acting in a particular way. It may be that if the person does not identify with sufficient precision what the hypothetical change in circumstances is, the court may be required to conclude that the evidence is not simply inherently unreliable, but it fact meaningless. It may cease to be relevant, because it is incapable of rationally affecting the assessment of the probability of the existence of a fact in issue.
For practical reasons, it is necessary to defer further consideration of this submission until after the contents of the underwriters' affidavits have been considered.

The objection under s 135 of the Evidence Act

Mr Beslic submitted that the evidence of the underwriting witnesses was "contaminated" irremediably, by reason of the fact that they had all been given all of the documents in the 21 categories contained in their exhibits. These documents included a statement by MLC's Technical Support Manager in 2011, which stated after the fact: "It is clear that had underwriting been advised of his history of mental health problems both applications would have been declined. We would not have offered a contract on any basis". The evidence was also based on a substantial amount of information that only came into existence after MLC issued the policy, and increased the cover. Much of that evidence is expansive on various topics connected with Mr Beslic's psychological condition, and the circumstances in which he made his applications to MLC. The evidence was not limited to the result of a request to Mr Beslic's treating doctors, particularly his psychiatrist, of the form: doing the best you can what information would you have provided to MLC at the time of Mr Beslic's applications, if we had asked you questions X, Y and Z.
Mr Beslic referred to the observations made by the Court of Appeal in Day v Perisher Blue Pty Ltd [2005] NSWCA 110; (2005) 62 NSWLR 731, while acknowledging that there were material differences between the way in which the witnesses' evidence had been prepared in the two cases. Mr Beslic criticised the prejudicial effect caused by the way in which the evidence had been prepared, without impugning the conduct of the persons who prepared the evidence.
Mr Beslic also said that there has been no attempt in MLC's evidence to deal with the contamination, in the sense of getting the witnesses to say how they actually used all of the documents in the 21 categories, and what their evidence would have been if they had only been given the limited information that should have been given to them.
In these circumstances, Mr Beslic submitted, the underwriting witnesses' evidence could only be of low probative value, because it is no longer possible for the court to reliably assess what the witnesses' evidence would have been, if they had not first been provided with so much prejudicial information that was irrelevant to the preparation of their own evidence, compared to the evidence that they have given. Consequently, allowing the evidence would be unfairly prejudicial to Mr Beslic, or alternatively misleading or confusing. It therefore follows that the evidence should be rejected under s 135 of the Evidence Act.
It is also necessary to defer consideration of the validity of this submission until after the contents of the underwriting witness' affidavits have been considered.

The underwriting evidence

As I have noted above, MLC has served additional affidavits since Mr Beslic filed his notice of motion. Those affidavits include an affidavit by Mr John Leonard, MLC's Chief Underwriter at the time of Mr Beslic's applications, as well as supplementary affidavits by four of MLC's underwriters.
It will be convenient to deal with Mr Leonard's affidavit first, as it deals with a number of relevant underwriting practices adopted by MLC. When considering the evidence of the underwriters who have made supplementary affidavits, I will deal with the affidavits in reverse chronological order, as it may be that the later affidavits cure evidentiary shortcomings in the earlier affidavits.

John Leonard

Mr Leonard affirmed an affidavit on 19 November 2015.
Mr Leonard was MLC's Chief Underwriter from 1993 to July 2006: par 2. There were approximately 20 underwriters in the Sydney office during that time period: par 3.
Mr Leonard explains the operation of the Policy and Development Team (PDT) in par 4.
In pars 5 to 9, Mr Leonard explains MLC's practice of distributing files requiring processing to the next available underwriter.
In par 10, Mr Leonard describes MLC's practices designed to achieve consistency and underwriting approach.
In par 11, Mr Leonard exhibits MLC's underwriting file concerning Mr Beslic's applications, MLC's Underwriting Guidelines, and medical records concerning Mr Beslic up to 25 July 2004.
In par 12, Mr Leonard says he has no specific recollection of having any personal involvement in Mr Beslic's applications, and has no reason to suppose that he was specifically aware of his applications at the time. This evidence establishes that Mr Leonard had no personal involvement in Mr Beslic's applications in any capacity.
Mr Leonard says, in par 13, what he would have done if he had been consulted by any MLC underwriter concerning either of Mr Beslic's applications. This evidence should be rejected, on the ground that it is irrelevant and inadmissible, as Mr Leonard was not consulted. Mr Leonard did not give any evidence of a practice by which junior underwriters would have consulted him, nor did he say anything about the likelihood or circumstances in which he would have been consulted.
In par 14, Mr Leonard gives opinion evidence as to his confidence as to what any underwriter at MLC would have done, as a result of the "systems [Mr Leonard] had put in place when Chief Underwriter at MLC and based on [Mr Leonard's] observations of the work practices of the individual underwriters", if Mr Beslic had answered "Yes" to Question 39. I do not accept that this is admissible opinion evidence. It is evidence of what Mr Leonard is "confident" would have occurred. It is in essence a speculation about what other persons would have done, and the likelihood that they would have done it.
Mr Leonard's evidence, in pars 15 to 17, takes the form of what he would have done, if he had known of certain identified parts of Mr Beslic's medical history. This evidence is not admissible as Mr Leonard cannot give Seltsam evidence. He has not established that he had any role in relation to Mr Beslic's applications that led to any chance that he may have processed any step in the applications.
In par 18, Mr Leonard begins with a sentence, couched in terms of a bare assertion, concerning the relative significance of mental health claims for life insurers in Australia, and then purports to state what the MLC underwriters were aware of in relation to the need to carefully assess applications which disclosed a history of mental illness. This paragraph is not admissible. I do not accept that Mr Leonard has established a proper basis for stating, as an absolute opinion, what all MLC underwriters were aware of.
In pars 19 and 20, Mr Leonard gives evidence concerning the identification of MLC's Underwriting Guidelines. He says that the Underwriting Guidelines were available to all underwriters and they were encouraged to consult them frequently and regularly. He says that from his observations, the underwriters referred to the Guidelines many times in any working week. I accept that this evidence is admissible in relation to the general principle objections made by Mr Beslic, as evidence of the available Guidelines and the practices of MLC's underwriters.
In par 21, Mr Leonard gives evidence albeit in a slightly confused way, as to what would have happened if the Guidelines had been consulted by an MLC underwriter, and if he had been aware of the basic facts of the plaintiff's mental history. The confusion between what an MLC underwriter would have done, and what Mr Leonard would have done, is carried over into pars 22 and 23. These paragraphs are not admissible, as Mr Leonard has not established a basis for giving opinion evidence about what all MLC underwriters would have done, and is not entitled to give Seltsam evidence himself.
Mr Leonard gives evidence, in pars 24 and 25, to the effect that Mr Beslic would not have been offered a mental health exclusion. By implication Mr Leonard is speaking on behalf of MLC as a whole. This evidence is not admissible, as the individual underwriters actions are relevant, and there is no relevant sense in which MLC acted individually.
Par 26 is also inadmissible on the same ground, i.e. that Mr Leonard purports to give evidence of what MLC would have done, if Mr Beslic had disclosed in 2005 the medical history that MLC claims he should have disclosed in 2004.

Janet Kennerley

Ms Kennerley has affirmed affidavits on 2 May 2013 and 26 November 2015.
Ms Kennerley cannot remember what her work title was when employed by MLC as at 2004, but she says that she had sufficient authority to sign off on any application for cover. She was employed by MLC between October 2001 and the end of 2006. She was therefore available to work on processing both of Mr Beslic's applications.

26 November 2015 affidavit

Ms Kennerley explains, in par 2, MLC's practice of distributing files to the next available underwriter.
In pars 3 to 7, Ms Kennerley explains what she would have done, if she had been asked to process Mr Beslic's 2004 application, assuming she had been made aware of Mr Beslic's history of depression and anxiety.
In par 8, Ms Kennerley identifies the applicable MLC Underwriting Guidelines, and explains in par 9 that it was her practice to review the Guidelines frequently.
She says in par 10, how she would have responded to Mr Beslic's application, on the basis of her general appreciation of the effect of the Guidelines.
In pars 11 to 12, Ms Kennerley explains in detail how she would have applied the Guidelines.
In par 14, Ms Kennerley states "for the avoidance of doubt" that in her first affidavit and this affidavit she has only taken into account those aspects of Mr Beslic's mental health history that would have been available to her at the time of assessing the 2004 and 2005 applications. That evidence, if accepted by the court at the trial, is capable of dispelling the appearance from par 3 of the Ms Kennerley's first affidavit, that she had regard to all of the material in the documents in the 21 categories in the exhibit to her affidavit, even if brought into existence after the relevant dates in 2004 and 2005. That evidence has the effect that the court should not reject the substance of the first affidavit in its entirety on the ground that Ms Kennerley's process of reasoning was contaminated by information that would not have been available to her, if she had been the underwriter who processed any aspect of Mr Beslic's applications.
I find that none of the parts of Ms Kennerley's second affidavit that are referred to above are inadmissible on the grounds of any of Mr Beslic's in principle objections.
In par 12, Ms Kennerley refers to the possibility that she would have acted on a recommendation to "discuss with the P & D team". It is sufficient to say that that team was a group of underwriters within MLC with some supervisory authority over individual underwriters. In par 13 Ms Kennerley states: Based on my experience of the PDT, I have no doubt that, in the unlikely event that I had referred either of the plaintiff's applications to PDT, the PDT would have declined the application".
I rule that this paragraph is not admissible. The evidence is opinion evidence. It is doubtful that Ms Kennerley could have established a proper basis that qualified her to give opinion evidence as to what the persons who happened to be members of the PDT team at the time would have done, that is other than speculation. However, she has not attempted to provide a basis that would support that opinion.

2 May 2013 affidavit

In pars 4 to 18, Ms Kennerley gives evidence which interprets MLC's underwriting file notes. Those notes consist of a number of very briefly described line items. Ms Kennerley explains what each of the notes mean, and whether or not a particular note indicates that it records some step taken by her. I do not understand that any of Mr Beslic's in principle objections relate to this evidence. In my view, a senior underwriter at MLC is qualified to give evidence that goes no further than interpreting the short form notes by expanding their meaning.
This evidence is significant to the extent that it identifies the underwriters at MLC who actually made decisions to process Mr Beslic's two applications, on the basis that the information that he had provided concerning his medical condition justified MLC in proceeding without requiring more detailed information concerning his medical condition. The only underwriters who can give Seltsam evidence of what they would have done themselves are underwriters who made the decision to process Mr Beslic's applications on the basis of his responses in the application forms, concerning his medical history without requiring that additional information be provided; as well as any other underwriters who may, by reason of seniority, have had a supervisory role, who also reviewed the underwriting file and approved it on the basis of the responses to the medical questions given by Mr Beslic.
Ms Kennerley gives evidence in relation to the 2004 application, in pars 5 and 6, that she assessed the application, observed that there was nothing remarkable or relevant to the assessment in his medical history, and recorded "OK", indicating that the application was acceptable. That evidence is admissible.
Ms Kennerley deals with the 2005 application in pars 7 to 18. She notes in par 7 that Terri Norman assessed the 2005 application on 21 September 2005. Ms Norman can therefore give Seltsam evidence. In par 9 she notes that Ms Norman's recommendations were then referred to the PDT, and that Tracy Peterson of the PDT agreed with Ms Norman's recommendations. Ms Peterson therefore can give Seltsam evidence. Ms Kennerley's involvement was limited to discussing the occupational class with the agent, and she does not say that she considered the significance of the medical responses given by Mr Beslic. It may be that she did bring to bear her own consideration about whether the application should be approved, but her evidence in its present form does not establish that she did. Accordingly, Ms Kennerley cannot give Seltsam evidence concerning the 2005 application. However, as I read Ms Kennerley's affidavit, she does not give evidence concerning what she personally would have done, if Mr Beslic had accurately disclosed his medical history in the 2005 application form.
In pars 11 to 18, Ms Kennerley describes the involvement of Colin Fegent, Andrew Mortiss and the principal underwriter, Melissa Harrison, in the 2005 application. Her description does not make clear which, if any, of these underwriters made the decision to process the application on the basis of Mr Beslic's medical responses, without requiring additional information concerning his medical history. It will be necessary to defer considering the evidence that those three persons can give until the point where their affidavits are considered below.
In pars 19 and 20, Ms Kennerley gives evidence in the form of identifying what she describes as the significant aspects of Mr Beslic's medical history that she has found in categories (4) to (21) of the exhibit. This step in her evidence is preparatory to what follows.
Ms Kennerley has only identified aspects of Mr Beslic's medical history that occurred in the period up to 25 July 2004. Therefore, while in par 3 of her affidavit she said that she "had regard" to all of the documents in the 21 categories, the proper way to interpret the whole of her evidence is that, in pars 19 and 20, she identified the aspects of the documents that she considered to be relevant. When her affidavit is seen in this way, Mr Beslic's attack on the basis upon which her affidavit was prepared appears to be wrong in fact.
It should not be forgotten that, although in par 19 Ms Kennerley says that she has identified the relevant aspects of the documents in categories (4) to (21), it remains the case that in par 3 she said that she had regard to the documents in all of the categories. The documents in category (1) are restricted to MLC's underwriting file concerning how it processed the two applications. I do not think that Ms Kennerley's reliance on the underwriting file has in any way contaminated her evidence (when her evidence is considered as a whole, including her explanations).
Categories (2) and (3) include the statements made by Mr Freeman, MLC's Technical Support Manager, Products & Services, in 2011. Accordingly, Ms Kennerley has given her evidence knowing that Mr Freeman has stated his own opinion to the effect that MLC would not have agreed to either of Mr Beslic's applications "on any basis".
In my view, it was inappropriate for Ms Kennerley to have been given the evidence concerning Mr Freeman's opinion, in the course of the preparation of her first affidavit, and that should not have been done. I am not satisfied, however, that Mr Beslic has made out his case that, as a result, Ms Kennerley's evidence has been contaminated in a way that requires that the substance of that evidence be rejected as a whole. As I understand Mr Beslic's argument, he put it that Ms Kennerley's evidence was contaminated by the whole of the documents in categories (1) to (21), including not only Mr Freeman's opinions, but also a substantial amount of information concerning Mr Beslic's medical situation that post-dates the times when MLC processed is applications. Ms Kennerley's evidence, when taken as a whole, is capable of dispelling the contamination in relation to the later information. In my view, Mr Beslic should be able to deal with the significance of Ms Kennerley being aware of Mr Freeman's opinions adequately in cross-examination.
After setting out her analysis of the relevant aspects of Mr Beslic's medical history, Ms Kennerley then, in pars 21 to 33, gives evidence of what she would have done, had she "been aware of this history at the time of assessing the plaintiff's applications". Subject to the following qualifications, in my view that evidence is admissible on the Seltsam principle.
The qualifications refer to aspects of Ms Kennerley's evidence where she departs from stating what she would have done, and giving her explanations. The following aspects of these paragraphs of Ms Kennerley's first affidavit are not admissible: 1. In par 22 the words "and, in my experience, other underwriters I have worked with", are not admissible, as the evidence is a statement of opinion, and Ms Kennerley has not provided a basis for that opinion. 2. In par 25 the words "and other underwriters with whom I have worked" are not admissible, on the same basis as in (1). 3. I will reject from par 26 down to the end of the first sentence in par 29, as in form it is evidence not of what Ms Kennerley would have done, but of what MLC would have done. In my view the Seltsam principle does not extend to permit Ms Kennerley to give evidence of what MLC as a whole, or other underwriters, would have done. I add that some of this evidence may be being rejected because it has been interpolated into Ms Kennerley's evidence about what MLC or other underwriters would have done. I refer particularly to the reference to the Personal Medical Attendant's report, and the Mental Health Position Questionnaire, in pars 27 and 28. Ms Kennerley may have intended to give part of this evidence in support of what she personally would have done. Aspects of this evidence may fall within the field where trial judges often grant leave to adduce additional oral evidence, when they find it necessary to reject the whole of a piece of evidence, part of which may be admissible, if tendered on a different basis.

Tracy Peterson

Ms Petersen swore affidavits on 29 April 2013 and 24 November 2015.
According to par 2 of the first affidavit, Ms Petersen was employed as an underwriter within the PDT between April 2005 and October 2005. Accordingly, Ms Petersen could only have been involved in the 2005 application.

24 November 2015 affidavit

In par 2, Ms Petersen gives evidence about MLC's practice of distributing files to the next available underwriter; in par 3 she explains the purpose of the PDT, and in par 4 she gives evidence about MLC's Underwriting Guidelines.
As I understand Ms Petersen's evidence, in pars 5 to 11, she gives evidence of what she would have done, if she had been involved in the assessment of Mr Beslic's 2004 and 2005 applications. She deals with her possible involvement in both applications in the one breath, as it were. As Ms Petersen was not employed by MLC in 2004, she cannot admissibly give evidence as to what she would have done in relation to the first application. I have taken the reasoning expressed by Ms Petersen in pars 7, 9 and 10 as being explanations for the Seltsam evidence that she purports to give in other paragraphs.
Ms Petersen's entitlement to give evidence concerning the possible involvement in the 2005 application will be deferred until her earlier affidavit is dealt with.
Ms Petersen states in par 11 that, in both affidavits, she has only taken into account those aspects of Mr Beslic's mental health history that could have been available to her when assessing his 2004 and 2005 applications. As was the case with Ms Kennerley's evidence, this qualification undermines Mr Beslic's argument that Ms Petersen's evidence has been fatally contaminated, because she had regard to subsequent information about his medical history. It is now a matter for cross-examination as to whether par 11 of Ms Petersen's affidavit should be accepted.

29 April 2013 affidavit

In par 4, Ms Petersen notes Mr Beslic's responses to relevant questions in his 2004 application, and states in par 5 that he gave the same responses in his 2005 application.
Ms Petersen discusses her own involvement in the 2005 application, as well as the involvement of Terri Norman in pars 6 to 9. Ms Norman assessed the 2005 application on 21 September 2005, and noted that there were no concerning medical aspects (line 1600 of MLC's file printout), and then referred the application to Ms Petersen for approval. Ms Petersen gives evidence in par 8 about what her usual practice was in relation to processing the application, and then notes in line 2010 that she states that she agreed with Ms Norman's recommendation to obtain blood tests, and that the application be re-quoted. Ms Petersen's evidence concerning her usual practice is admissible.
In par 10, Ms Petersen states that she has had regard to the documents in categories (4) to (21), and then notes aspects of the documents (all pre-dating the date of the first application) that would have been significant to her assessment of the 2005 application, and would have been significant, had she been involved in the 2004 application. This evidence relates to what Ms Petersen would have done at the stage of deciding whether to approve the application with additional knowledge of Mr Beslic's medical history. Ms Petersen can give this Seltsam evidence concerning the 2005 application, but not the 2004 application.

Melissa Crawford (nee Harrison)

Ms Crawford swore affidavits on 6 May 2013 and 4 December 2015.
She was employed as an underwriter by MLC between 2000 and late 2010. As at late 2004, Ms Crawford was part of the PDT.
In pars 2 and 3, Ms Crawford gives evidence of why she would not, either in 2004 or 2005, have approved the issue of a policy to Mr Beslic subject to a mental health exclusion.
In par 4 Ms Crawford identifies the aspects of Mr Beslic's mental health history that she regarded as being important.
She then says in par 5 that, if she had been aware of all or any of the matters referred to in par 4, she would have required detailed information from the plaintiff's general practitioner and psychiatrists. In par 6 she says that, if she received information that confirmed the matters set out in par 4, she would have rejected the application.
Ms Crawford also, in par 7, says that she has only taken into account those parts of the plaintiff's mental health history that could have been available to her at the time of assessing the 2004 and 2005 applications.

6 May 2013 affidavit

Ms Crawford says in par 5 that she has no recollection of either of the applications made by Mr Beslic.
Ms Crawford interprets MLC's file notes concerning the first application, in pars 6 to 11. Ms Crawford was not personally involved. As I understand it, Mr Beslic's in principle objections do not apply to evidence of this type.
Paragraphs 12 to 21 deal with Ms Crawford's interpretation of MLC's file notes concerning the 2005 application. She notes in par 13 that Ms Norman considered the application was "medically clear", and in par 15 that Tracey Petersen of the PTD agreed with Ms Norman's recommendations. At par 19 she notes that Mr Fegent considered the application was acceptable subject to receipt of a quote based on the correct occupation rating, and as his authority was low, the application was referred to Ms Crawford as Principal Underwriter. Line 3500 indicates that Ms Crawford agreed with his assessment. This appears to have been Ms Crawford's only actual involvement in the 2005 application.
Ms Crawford then, in pars 22 to 23, gives evidence of what she would have done if Mr Beslic had answered "yes" to Question 39 in his first application. This evidence is not admissible, as the evidence shows that Ms Crawford was not the underwriter who made the decision in relation to the 2004 application to proceed without seeking further evidence concerning Mr Beslic's medical condition.
In pars 24 to 30, Ms Crawford appears to have shifted to saying what she would have done in relation to both applications, if she had been involved in processing them with the knowledge that would have come from a request that further information be provided concerning Mr Beslic's condition. It therefore appears to be admissible Seltsam evidence, as Ms Crawford was employed by MLC at the time each of the two applications was made.
The evidence in par 31 is merely the obvious statement that, if the first application had been declined, there would not have been a second application.

Terese Norman

Ms Norman swore affidavits on 30 April 2013 and 22 December 2015.
Ms Norman was employed by MLC at the time of the 2005 application.

22 December 2015 affidavit

Ms Norman gives evidence of MLC's practice of distributing files to the next available underwriter at par 2.
At pars 3 to 6, Ms Norman gives evidence of what she would have done in either 2004 or 2005, in the hypothetical scenario that Mr Beslic had disclosed his mental health history. In particular, she says in par 3 that she would have sought a detailed report from Mr Beslic's general practitioner and/or psychiatrist, if he advised of certain listed matters.
In pars 4 to 6, Ms Norman says what she would have done in respect of both applications, had she learned certain identified additional information about Mr Beslic's mental condition.
Ms Norman cannot give admissible evidence as to what she would have done in 2004, either at the stage of processing Mr Beslic's initial application, or on the assumption that she had received the file after additional information concerning Mr Beslic's medical condition had been obtained, because she was not employed as an underwriter by MLC in 2004.
I will return to the admissibility of Ms Norman's evidence concerning what she would have done in 2005, when I consider her earlier affidavit.
Ms Norman also gives evidence, in par 7, that in both of the affidavits she has only taken into account matters relating to Mr Beslic's mental health history that would have been available to her at the time of assessing the 2004 and 2005 applications.

30 April 2013 affidavit

In par 5, Ms Norman says that she received the second application on 25 September 2005, and noted certain matters, including that Mr Beslic was "medically clear". Ms Norman is therefore able to give admissible evidence of what she would have done, if Mr Beslic had disclosed his medical condition in the 2005 application, as Ms Norman was the underwriter who decided to progress the application on the basis of the answers given.
Ms Norman says in par 6 that she had little authority, and was granted approval by Ms Petersen of the PTD. She had no further involvement in the application: par 7.
Ms Norman gives general opinion evidence in par 8 as to a number of generally expressed requirements that are to be considered in assessing applications for policies of life insurance. I have treated these general statements as being part of the explanation that follows, as to how she would have processed Mr Beslic's applications.
Ms Norman then gives evidence, in pars 9 to 14, of what she would have done if she had been required to assess both the 2004 and 2005 applications with additional knowledge of Mr Beslic's mental condition.
Ms Norman cannot give this evidence in relation to the 2004 year because she was not employed by MLC as an underwriter.
She can give this evidence in relation to the 2005 application, as Mr Beslic's application could have been distributed to her. I am satisfied that Ms Norman's evidence concerning her hypothetical response to the 2005 application, if Mr Beslic had disclosed his mental condition, is not inadmissible on the basis of Mr Beslic's general in principle objections.
However, in par 11 Ms Norman states: "I believe that MLC would have declined the first Application", and then sets out the factors that led her to that conclusion in the balance of the paragraph. Ms Norman has not established a basis for that opinion, which is expressed as a belief, in her affidavit.

Colin Fegent

Mr Fegent has affirmed one affidavit on 1 May 2013.
Mr Fegent was employed as an underwriter by MLC between 2005 and 2007, so he can only give evidence concerning Mr Beslic's second application.
He notes in par 5 that his name appears in line 3400 of MLC's file notes, and his notes appear at lines 2900 to 3300. He has no independent recollection of the second application: par 6.
Mr Fegent discusses his involvement in the second application in pars 7 to 10. He became involved after Ms Norman ordered blood tests for Mr Beslic. I infer that Ms Norman made the decision to process the file on the basis of Mr Beslic's responses to the questions in the application form, and Mr Fegent became involved later in the process. He does not appear to be an underwriter who made the decision to proceed on the basis of Mr Beslic's application. The relevance of Mr Fegent's evidence may be limited, but it should not be excluded upon the basis of Mr Beslic's general in principle objections.
In pars 11 to 22, Mr Fegent gives evidence of what he would have done in relation to both applications, if Mr Beslic's applications had disclosed a previous history of anxiety, stress or depression. Mr Fegent cannot give that evidence in relation to the 2004 application, but in principle he can give Seltsam evidence in relation to the 2005 application.
Mr Fegent says in par 4 of his affidavit, as do the other underwriting witnesses, that he has had regard to the documents in the 21 categories. Unlike the witnesses considered above, Mr Fegent has not sworn a supplementary affidavit in which he has asserted that he only had regard to information that pre-dated the time when MLC processed the applications. However, on a fair reading of Mr Fegent's explanation in pars 11 to 22, it is relatively clear that Mr Fegent is only referring to information that existed before the applications were considered (for example, in par 12 he refers to "an application in which there was a history of psychiatric or psychological treatment").
I am not satisfied that the fact that Mr Fegent had access to Mr Freeman's opinion, or information concerning Mr Beslic's mental condition that was brought into existence after the applications were considered, is a sufficient reason for rejecting his evidence. In my view Mr Beslic should be able to deal with this issue adequately in cross-examination.

Andrew Mortiss

Mr Mortiss affirmed an affidavit 2 May 2013.
He was employed by MLC as an underwriter from October 2003 to May 2011: par 3.
Mr Mortiss has no independent recollection of Mr Beslic's applications. He sees from the underwriting file notes that he had some involvement with the second application, in that he signed off on a quote that a previous underwriter had requested on the basis that the occupation code needed to be changed: par 5.
Mr Mortiss did not look at the application medically: par 6.
He then, in pars 8 to 15, gives evidence of what he would have done, had he assessed the two applications medically and been aware of Mr Beslic's mental health history. Mr Mortiss was employed as an underwriter by MLC at the time both applications were processed. In principle he can therefore give Seltsam evidence in relation to both applications.
Mr Mortiss is in the same position as Mr Fegent, in that, in par 4, he gives evidence of having regard to all of the documents in the 21 categories, but has not expressly qualified that evidence by saying that he only relied upon information brought into existence before the dates when MLC processed the two applications. However, in my view Mr Mortiss does give some explanation of his process of reasoning that identifies the information that he would have regarded as being significant, although that explanation is limited.
I would not reject Mr Mortiss' Seltsam evidence on the basis that it has been irremediably contaminated by his knowledge of all of the information in the documents in the 21 categories, as I consider that Mr Mortiss' evidence should be of relatively limited weight, and Mr Beslic should be able to deal with this issue adequately in cross-examination.

Conclusion concerning underwriting evidence

Where an underwriting witness gives Seltsam evidence about a step that the witness actually took in processing one of Mr Beslic's applications, and says that a difference step would have been taken, if Mr Beslic had responded differently in his application, the evidence is admissible, as it is relevant state of mind evidence. That said, the weight of the evidence will be affected by the considerations discussed in Seltsam.
I have held that the underwriting witnesses are entitled to give relevant Seltsam evidence, if they were employed by MLC at the time one of the applications was processed, and there was a chance that the file would have been distributed to them to be processed. The uncertainty about whether the particular witness would have been the one who processed the application should not logically make the evidence irrelevant. However, the weight of the evidence should further be diminished in proportion to the chance that the witness would in fact have processed the application. That chance appears to be 1 in 20. As the evidence of only a small number of underwriters will be admitted on this basis in relation to each of the applications, out of all the employed underwriters, the weight of the evidence is likely to be very limited.
I am generally satisfied that the underwriting witnesses have provided sufficient detail as to the information in the 21 categories that they took into account, and at least in four out of the six cases, that they only had regard to information that came into existence before the applications were processed. I am satisfied that it would not be appropriate to reject the witnesses' evidence outright on the ground that it has been irremediably contaminated, or that it is not sufficiently possible to identify the basis upon which the witnesses would have acted. Furthermore, it is not warranted that the evidence be excluded by applying s 135 of the Evidence Act. In my view, while there are serious deficiencies in the way in which the witnesses' evidence has been prepared, Mr Beslic should be able to deal with the evidence fairly and adequately in cross-examination.

The claim against AXA

Mr Beslic makes a claim against AXA, in the event that MLC succeeds in establishing that it is not liable to pay Mr Beslic under the policy because of fraudulent nondisclosure. In his second further amended statement of claim, Mr Beslic alleges that AXA owed to him a duty of care to ensure that it correctly advised him as to the information required to be disclosed, and the information disclosed, to MLC (par 20). He also makes a claim against AXA based upon misleading and deceptive conduct in relation to the provision of financial services (par 30).
Mr Beslic pleads that he dealt with Mr Woodward on behalf of AXA. He pleads that, since 2003 he had informed Mr Woodward of the fact that he had had psychiatric consultations previously (par 18), and that in the process of completing the application form to be submitted to MLC, Mr Beslic orally informed Mr Woodward that he had had psychiatric consultations, but had been advised that he had not suffered a mental illness, and that he had not regularly taken medication in the last five years (par 19). He pleads that Mr Woodward advised him to tick "no" in answer to the relevant questions in the MLC application form, and asked Mr Beslic to provide him with further details of his medical history (par 21).
The allegation that is material for present purposes is found in par 22 of the further amended statement of claim. Mr Beslic alleges that, pursuant to the agreement in par 21, he provided two emails to AXA on 5 October 2004. He says, in pars 23 to 25, that Mr Woodward added the information contained in one of the two emails to the completed application form, but did not add the information contained in the other of the email which included Mr Beslic's psychiatric consultation with Dr Sokolovic in July 2004.
In par 26 of its defence, AXA does not admit that Mr Beslic sent the two emails to Mr Woodward. It does not admit that the second of the two emails referred to Mr Beslic's psychiatric consultation with Dr Sokolovic (par 28), and it does not admit the allegations in par 25 (par 29). As I understand it, Mr Woodward will give evidence that he does not recall receiving the relevant emails.
AXA contends that the Fourth October 2004 email was fabricated, and the evidence of Mr Klein which Mr Beslic contends should be ruled inadmissible at this stage of the proceedings will be relied upon by AXA to support its argument that the email was fabricated.

Mr Klein's evidence

AXA wishes to rely upon reports prepared by Mr Nick Klein of Klein & Co, dated 5 September 2014 (First Klein Report) and 20 August 2015 (Second Klein Report). (It is immaterial that the dates of these reports are different to the dates of the reports referred to in the notice of motion).
Mr Klein is a forensic computer expert. He has examined one computer that was used by Mr Beslic. The computer was acquired in 2010, and was not the computer commonly used by Mr Beslic as at 5 October 2004. He examined two computers used by Mr Woodward, which were also not the computers that were in use by Mr Woodward on 5 October 2004.
In submissions, Mr Beslic approached the two reports on the basis that the Second Klein Report was in substance an elaboration of the First Klein Report, and that it was appropriate to deal with the application by concentrating on the Second Klein Report. Although Mr Beslic's written submissions deal separately with both reports, his closing submissions focused solely on the Second Klein Report. I propose to take the same approach.
The Second Klein Report is 33 pages long. Apart from formal and introductory material, it takes the form of answering 21 questions posed by the solicitors for AXA. It is written in concise, even compressed language, as is common in reports written by technically qualified experts. It is accompanied by 270 pages of annexures.
I am satisfied that Mr Klein has the expertise in principle to give expert evidence of this nature. The contrary was not contended by Mr Beslic.
Paragraphs 1 to 54 of the Second Klein Report provide an introduction and background to the substantive response that follows. Mr Beslic submits that all of these paragraphs are inadmissible, as the background to a report is irrelevant if the substantive opinions are inadmissible.
I propose to set out some of the questions that were posed to Mr Klein, and an outline of his responses. I have had regard to the whole of his responses, but they are too lengthy to warrant being set out in full. My summaries of the responses are intended to assist in the explanation of these reasons, and are likely to over-simplify the evidence given by Mr Klein. It will not be necessary for me to deal in the same extensive detail with all of the questions posed to Mr Klein.

Questions (a) and (b)

(a) Please confirm by highlighting in yellow on the attached unmarked copies of those email chains what emails from the following email chains were located; (i) the 5 October Email Chain; (ii) the August Email Chain; and (iii) the September Email chain. (b) Do you have any comments about the form of the emails found?
The 5 October Email Chain is the one primarily relevant in these proceedings.
Mr Klein says in pars 56 and 57 that no email messages from any of these email chains were located on the Woodward Computers, or within the Woodward Emails.
In pars 58 to 82, Mr Klein gives detailed objective evidence of which of the emails in the identified email chains were found in various identified locations on Mr Beslic's computer, and in what form (i.e. email format, Word or PDF).
So far as the 5 October Email Chain is concerned, Mr Klein said that he found two copies of the First October Email, which was an email from Mr Woodward to Mr Beslic. By inference, Mr Klein did not find a copy of the Fourth October Email, which was the email that Mr Beslic claims advised Mr Woodward that he had seen a psychiatrist around July.
This evidence would appear to show that, even though the Beslic computer was acquired in 2010, about six years after the relevant time, some of the emails in the identified email chains had in various forms been saved onto the computer, but the relevant 5 October 2004 email had not.
Mr Beslic's position concerning pars 56 to 82 is that all of the paragraphs, save for par 74, are provisionally relevant under s 57 of the Evidence Act "if the opinion of Klein is admissible". As I understand it, Mr Beslic's argument is that, as his subsequent submissions show that what he describes as Mr Klein's opinions are inadmissible, then this provisionally relevant evidence should also be rejected at this stage.
Mr Beslic submits that par 74 is inadmissible, because it is irrelevant (ss 55 and 56); it is inadmissible opinion evidence (s 76); and it should be excluded (s 135). Paragraph 74 states: The above findings indicate that this email [being a 20 September 2004 email contained in Annexure X] was opened in or copied into the Microsoft Word program, then saved as a PDF document. As I described below at paragraph 102, this is one possible method that can be used to manipulate an email message.
The grounds for inadmissibility are lack of relevance, because a possibility is irrelevant. It does not establish actual manipulation. Mr Beslic submits that the opinion is not based on specialised knowledge, being computer forensics. The reasoning process is not exposed, and involves conjecture and speculation and alternative explanations. Mr Beslic also relies upon s 135 of the Evidence Act.

Question (c)

(c) What reasons could account for some emails being located, but others not?
Mr Klein gives four possibilities in par 83. First, it could be that the missing emails were sent and received through computers previously used by Mr Woodward and Mr Beslic, but were not transferred across from these older computers to the current computers. Mr Klein added: "however this seems unusual in the case when some emails of particular email chains are present, while others are not".
Secondly, some of the emails from the email chains may have been deleted before the new computers were acquired, while others were not.
Thirdly, it may be that all of the emails were transferred to the current Beslic computer, possibly by accessing an identified email account, however some emails have since been selectively deleted and no remnants of them can be recovered.
The fourth possibility is that some of the emails did not exist in their current form, and therefore cannot be located.
Mr Beslic contends that par 83 is inadmissible, as it is an opinion regarding "possibility", and a possibility is irrelevant. The location of emails does not establish actual "manipulation". The opinion is not based on specialised knowledge (computer forensics). The reasoning process is not exposed. It is conjecture, speculation and alternative explanations that are inadmissible.
It is likely that, in relative terms, the evidence in par 83 may be important to AXA's case. The making of Mr Beslic's objection highlights the fact that, although AXA has served the Second Klein Report, it has not yet sought to tender it into evidence. The hearing has not yet commenced; the parties have not yet opened their cases; Mr Beslic's evidence has not been tendered; and he has not yet been cross-examined. MLC has not yet conducted its case. Mr Beslic's application requires the court at this stage to decide that evidence from Mr Klein as to the four reasons why some of the emails in the email chains may be found on the 2010 Beslic computer, and not others, is necessarily irrelevant. The basis of the submission is that Mr Klein gives four possibilities, and does not give an expert opinion as to which possibility applies. Mr Beslic submits that the opinion is not based upon specialised knowledge. That submission is mere assertion. It is true that Mr Klein does not set out an elaborate explanation as to why these are the only four possibilities, but it does not follow that his opinion as to the possibilities is not based upon specialised knowledge.

Question (d)

(d) The timestamp on the First and Second October Email displays +1000 (EST) whereas the timestamp on the Fifth October Email displays +1100 (BST). Please describe the meaning of "timestamp" within the context of these email messages.
It should be noted that the 5 October Email Chain is a chain of five emails exchanged between Mr Beslic and Mr Woodward. It is only the last of those emails, the Fifth October Email, which appears with a date and timestamp. The four earlier emails are only extracted as to their content. The Fifth October Email is apparently a response by Mr Woodward to Mr Beslic concerning the relevant Fourth October Email. The Fifth October Email said:" Hi Damian, All sorted out, you should receive something within 2 weeks."
In his answer, Mr Klein explained how, depending upon whether the email has been viewed by an email program such as Microsoft Outlook, or through an Internet browser, the service provider's email server will insert a timestamp on the email to indicate a particular time in the transmission of the email at which the timestamp has been placed upon the email.
Mr Beslic has objected to pars 84 to 86, and apparently not pars 87 to 90. The reason for the selective objection is unclear. The objection is given on the basis of relevance, s 59 (this may be an error, as it is unclear what the hearsay rule has to do with this evidence), the opinion rule, and s 135. The only explanation given concerns relevance, and the submission is: "Not clear how this proves manipulation and/or fabrication. Speculation."
In fact, the evidence given is merely a technical opinion as to the process whereby email service providers cause timestamps to be placed on emails during the course of transmission.

Question (e)

(e) You state in your letter dated 17 April 2013, that you consider that the timestamp difference is an anomaly. You further explain that in your experience, two things could account for this timestamp anomaly, being a misconfiguration of a server at Yahoo!, or a manipulation of the Fifth October Email message. In your experience, have you ever observed or heard of a Yahoo! server malfunctioning so as to show an incorrect timestamp?
The anomaly referred to arises out of the fact that the Second October Email (which may be found within Annexure L as a separate email) has a timestamp +1000 (EST) while the Fifth October Email has a +1100 (EST) timestamp. Both emails were apparently written on 5 October 2004. As at 5 October 2004, Eastern Daylight Saving Time had not started (it did so on 31 October 2004). Accordingly, the correct timestamp was +1000 from Greenwich Mean Time, not +1100.
Mr Klein explained these matters in pars 91 to 93.
Question (e) had suggested two possibilities for the anomaly, based upon Mr Klein's 17 April 2013 letter. In par 94, Mr Klein says there is a third possibility, being that the user's location was incorrectly configured in their Yahoo! email account. That would require that Mr Beslic's computer had been incorrectly configured to be in Tasmania, which was the only State that had daylight saving at that time. Mr Klein expressed the opinion in par 95 that he does not believe this occurred, since the First October Email was also found on the Beslic Computer, and its time zone is accurately represented as +1000 (EST).
In par 96 Mr Klein explains why he is not of the opinion that the anomalous timestamp on the Fifth October Email may be explained by the email being printed out on a later date, after daylight saving had commenced.
In par 97 Mr Klein says that he has seen examples of a Yahoo! Email Server showing incorrect timestamps, due to misconfiguration of user location settings, but he has not observed nor heard of a Yahoo! Email Server showing the correct time zone (EST), but an incorrect time zone effect, as seen on the Fifth October Email.
Mr Beslic submits that all of pars 91 to 97 are inadmissible. He relies upon the same paragraphs of the Evidence Act as for the preceding objection (without reference to s 59), but only explains the relevance objection using the same words as the preceding objection.
Mr Beslic's submissions do not explain why it is irrelevant to the issues in the present case that the only copies of the relevant Fourth October Email that exist (which are in hard copy form, as part of the 5 October Email Chain) are part of a chain which has an anomalous timestamp on it.
Nor do Mr Beslic's submissions explain why the evidence is mere speculation.
Mr Klein gives expert evidence as to the possible explanations for the anomaly, and then provides some technical evidence as to the circumstances that would have to exist in order to make a particular explanation the likely true explanation.
Mr Beslic does not appear to have made a separate objection to the evidence in par 97, which is evidence of Mr Klein's own experience.

Question (f)

(f) In your experience, how can an email be manipulated?
In pars 98 to 102, Mr Klein describes a number of processes that, in his experience, can be applied to manipulate the content on an email, in the sense of making it appear that the email is a genuine email, when it was not in fact created and transmitted in the form in which it appears.
Mr Beslic objects to this evidence on substantially the same basis as the preceding paragraph, and only explains the relevance objection in terms: "No opinion regarding manipulation in this case. Speculation."
It does not follow that at the hearing expert evidence of the manner in which an email may be manipulated could not be relevant to the issues in the proceedings.
Mr Beslic does not explain why the evidence is not admissible expert evidence, save to use the word "speculation". It is not speculation; it is evidence of technically possible ways to manipulate an email.

Question (g)

(g) Please review paragraphs 127 to 130 of the Evidentiary Statement of Damian Beslic dated 1 April 2015. To the extent that you are able, expressing your opinion within your field of expertise, please comment on the statements made by Mr Beslic in those paragraphs.
In pars 103 to 106, Mr Klein provides technical comments on evidence in Mr Beslic's statement concerning the circumstances in which emails will be stored on a computer, and when they may be recovered. He agreed with some of the statements made by Mr Beslic, although he pointed out that in the circumstances where Mr Beslic used Microsoft Outlook, it is likely that Microsoft Outlook would make copies of email messages on the user's computer.
Mr Beslic objects to the whole of pars 103 to 106, on the ground of relevance, and also because it is an opinion about possibilities.
It is difficult to see how the evidence could be irrelevant, if it is a technical response to evidence proposed to be given by Mr Beslic.
The evidence is not speculation. It is simply technical evidence about the circumstances in which a user's computer will store email messages, and also the circumstances in which email messages may be recoverable from an email service provider's server.

Further questions

I do not think it is necessary to set out all of questions (h) to (u), and to analyse Mr Klein's responses in detail and the basis of Mr Beslic's objections.
The questions are, in outline: (h) How might an email be saved to the Beslic Computer if it was not sent from that computer? (i) What is a "PST" archive? (j) A number of specific questions about a particular email archive located on the Beslic computer. (k) The purpose and effect of compaction of an email archive. (l) The time and date when compaction of Mr Beslic's email archive was undertaken. (m) The effect of a particular compaction of Mr Beslic's PST email archive on 20 March 2014. (n) The purpose and effect of a disk defragmentation. (o) The purpose and effect of a "disk cleanup". (p) The time and date when defragmentation of the Beslic Computer was undertaken. (q) The time and date when a disk cleanup of the Beslic computer was undertaken. (r) How is it possible to determine when a backup drive has been connected to a computer? (s) When was the last backup drive connected to the Beslic computer? (t) What is a backup log and what information does it contain? (u) What does the backup log show concerning emails in the Beslic computer being backed up onto an external drive, and that these emails are no longer on the Beslic computer?
Mr Klein gave answers to all of these questions in the same manner, and generally with the same level of technical detail, as he did for the questions considered separately above.
Mr Beslic has objected to all of this evidence, in pars 107 to 156, on grounds similar to those taken in respect of the earlier paragraphs in the Second Klein Report.
It should be mentioned that the questions that I have summarised above concerning compaction of the email archive on a computer, disk defragmentation, disk clean up, the use of a backup drive, and the significance of a backup log, all concerned actions apparently taken by Mr Beslic concerning the 2010 computer, in the period before it was delivered into Mr Klein's possession for analysis. Some of these steps were taken in the days immediately before delivery. Speaking generally, it appears that Mr Beslic subjected his computer to these processes, before he delivered the computer to Mr Klein. The questions are designed to elicit technical evidence as to the nature of the processes, and the consequences of their implementation, for the way that information remains stored in the memory of the computer; and in particular whether the processes may lead to the loss of information, or make it more difficult for a forensic computer expert to recover information that has been deleted.
Mr Beslic submits that Mr Klein's responses to all of these questions should be ruled inadmissible now because Mr Klein's opinion as to how the implementation of these processes may have impeded his ability to successfully analyse Mr Beslic's computer is a matter of "possibility [and] is not evidence of manipulation or fabrication". He submits that the assumed facts are not identified, nor is the reasoning process given. In relation to the application of s 135 of the Evidence Act, Mr Beslic submits: "It is unfair to allow this evidence as alternative inferences [are] available as to why a computer user may [implement the particular process]".
It is true that Mr Klein's expert opinion evidence on these subjects does not positively assert that the Fourth October Email is a fabrication. Nor does Mr Klein assert in a positive way that the implementation by Mr Beslic of any of these processes necessarily had the consequence that some evidence that might support an inference that the Fourth October Email is a fabrication has been suppressed.
Rather, it is limited expert evidence that is capable of explaining the effect of some processes, and the possible consequences of those processes being implemented.
Evidence of that type is not per se irrelevant, even though it may turn out that, if AXA seeks to rely upon it at the hearing, it will have no forensic effect, because of the absence of other evidence to which it may be linked to permit a relevant inference to be drawn.
In a procedural regime whereby parties are obliged to serve written reports by the expert witnesses that they anticipate before the commencement of the hearing they will call to give evidence, the court should not be ready to reject the evidence in limine, before the commencement of the hearing, because the evidence does not tend to establish some proposition relevant to an issue in the proceedings in a self-contained way. Where, as in the present case, proper expert evidence appears to be contained in an expert witness report, which may in a somewhat piecemeal way be relevant to the issues, in conjunction with other evidence that may be tendered at the hearing, or not as the case may be, it is not appropriate for the court to reject the evidence at a preliminary hearing under s 192A of the Evidence Act.
I am not satisfied that Mr Beslic has established his claim that Mr Klein's two reports should now be rejected in their entirety in advance of the commencement of the hearing.
There is some evidence that Mr Beslic has retained his own forensic computer expert, although the evidence is scant as to what that expert has been required to do thus far. There is no evidence that it would be costly for Mr Beslic to obtain an expert response to Mr Klein's reports. I consider, based upon my own review of Mr Klein's reports, that it is sufficiently unlikely that emulating the investigations that Mr Klein has carried out would be unduly expensive and time-consuming, and that the court would require evidence before it found that Mr Beslic would be subject to undue expense or inconvenience if he were required to make his own election as to whether or not to contest Mr Klein's reports.
In general, I do not accept Mr Beslic's submissions that Mr Klein has not adequately explained his reasons for his conclusions. It is true that many of Mr Klein's conclusions are sparsely explained. Many of Mr Klein's conclusions are simply statements of what Mr Klein learned from his investigations. In other cases, Mr Klein has given short reasons that are likely to be intelligible to the lay reader, in circumstances where Mr Klein regards his conclusions as being obvious, and where a rigorous technical explanation would be incomprehensible and unnecessarily detailed. It is quite possible that, if Mr Klein is called to give evidence at the trial, the trial judge may seek elaboration of the reasons for some of his conclusions, for the purpose of enabling the judge to understand the effect of the evidence. That does not mean that Mr Klein's reports are defective in their present form.
I propose to reject Mr Beslic's application for rulings under s 192A of the Evidence Act that the whole of Mr Klein's reports are inadmissible, without making a ruling that they are wholly admissible, in a manner that may preclude objections being made to aspects of the reports, if and when they are tendered at the trial by AXA. In my view, the proper way to deal with the admissibility of Mr Klein's reports is for that to be within the control of the trial judge, and to be undertaken at the time and in the context in which the reports are tendered by AXA.
I will direct the parties to bring in short minutes of order to give effect to these reasons for judgment.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 June 2016

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