Bodycorp Repairers v Maisano

Supreme Court of Victoria|2013-05-17|Before: ELLIOTT J

EVIDENCE - the coincidence rule - evidence taken on voir dire - ruling followed - questions to be addressed - requirement that evidence be of significant probative value - Evidence Act 2008 (Vic), s 98(1).

EVIDENCE - general discretion to exclude - (Vic),

1 By written notice dated 8 May 2013, the plaintiff ("Bodycorp") notified the defendants of an intention to adduce evidence of certain events. This notice was given pursuant to s 98(1)(a) of the Evidence Act 2008 (Vic). It was accepted by the defendants that the notice was reasonable notice for the purposes of that provision.

2 Before turning to the terms of the notice, I refer to the relevant part of the pleadings to which the notice relates.

3 By its amended statement of claim ("ASOC"), in paragraph 15, Bodycorp alleges in the period March 1998 to July 1998 the 1st respondent, defined as "Maisano", and the 8th respondent, defined as "Munro", stated to each of the "category A franchisees" words to the effect that:

(a) It would be in the best interests of the franchisee for it to terminate its franchise agreement with [Bodycorp]; and

(b) If it did so, the franchisee would continue to be recognised by AAMI as a recommended repairer, but would no longer have to pay an 8% management fee to [Bodycorp],

4 The category A franchisees are defined in paragraph 14 of the ASOC to refer to Bodycorp Geelong, Bodycorp Clayton, Bodycorp Caulfield and Bodycorp Nunawading. The particulars provided to paragraph 15 are set out in schedule A to the ASOC. Those particulars provide:

In the case of each of the category A franchisees, the Statement was oral. It was constituted by a conversation, by telephone, between Maisano and/or Munro and a representative of the franchisee, as follows:

(a) Stan McHugh on behalf of the Nunawading franchisee;

(b) Kevin Old on behalf of the Geelong franchisee;

(c) Jim Poulis on behalf of the Clayton franchisee; and

(d) Lorenzo Pinton on behalf of the Caulfield franchisee.

In each case, the relevant substance of the conversation was as alleged in paragraph 15 of the [ASOC].
In each case, the conversation took place in the period preceding the termination of the franchise the date of which is specified in the particulars under paragraph 17 of the [ASOC].

It is not necessary for me to now go to those dates for the purposes of this ruling.

6 None of the witnesses referred to in schedule A (ie the category A franchisees) is to be called by Bodycorp.

7 Pausing there, 2 observations about the pleaded case should be made. First, the ASOC refers to respondents, rather than defendants, as this proceeding was transferred from the Federal Court. Secondly, and more substantially, to the extent the allegations are made against Munro, those allegations may now be put to one side. Yesterday the court made orders by consent dismissing the case against Munro and also the 7th defendant, Melton Bodyworks Pty Ltd, with no order as to costs.

8 Returning to the pleaded case, the Statement is the basis of a claim against Maisano for inducing breach of contract. It is alleged the category A franchisees were induced to breach their franchise agreements with Bodycorp as a result of the Statement. It is further alleged that the breaches of the franchise agreements resulted in Bodycorp suffering loss and damage.

9 Like allegations are made in the ASOC against the 4th defendant ("AAMI"), and the 6th defendant ("Martin"). The statement alleged to be made by AAMI is defined as the "AAMI Statement".

10 In substance, what is pleaded in paragraph 25 of the ASOC is the same as paragraph 15, except that it is alleged that AAMI made the AAMI Statement to different persons, namely "category B franchisees". The category B franchisees are defined in paragraph 14 of the ASOC as Bodycorp Sunbury, Bodycorp Spotswood, Bodycorp Heidelberg, Bodycorp Mornington, Bodycorp Moorabbin and Bodycorp Melton.

11 The particulars to paragraph 20 are set out in schedule B to the ASOC. They are lengthy, so I will not quote them. Suffice to say that particulars are provided of the alleged conversations, said to be between Martin, or Martin and others on behalf of AAMI, and representatives of each of the category B franchisees. Again, the court has been informed that Bodycorp will not be calling any of the representatives of the category B franchisees.

12 In paragraph 25 of the ASOC, allegations are made against Martin which effectively replicate the allegations made against AAMI. The particulars to those allegations are the same, namely those set out in schedule B.

13 The elements of a cause of action for inducing breach of contract are well settled. It is sufficient for present purposes to refer to the case of Allstate Life Insurance Company v Australia and New Zealand Banking Group Limited.[1] That case, and the authorities there referred to, make it plain that for a case to be made out, not only must it be established that the defendant did something which in fact induced a party to a contract to breach it, but also that the breach was knowingly and intentionally procured by the defendant.

14 Therefore, in this part of the case, both the conduct and the state of the mind of the relevant defendants are brought into question.

C. Section 98(1) of the Evidence Act

15 Section 98(1) relevantly provides:

Evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events or the circumstances in which they occurred, or any similarities in both the events and the circumstances in which they occurred, it is improbable that the events occurred coincidentally unless -

...

(b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.

16 The correct approach to the application and operation of this subsection was considered by the Court of Appeal in CGL v The Director of Public Prosecutions.[2] That was a case involving sexual offences against 4 different complainants. Evidence was sought to be led by the Crown of events relating to each of those complainants in a single presentment. The accused applied to the trial judge for severance of the counts. The trial judge allowed the application in relation to one complaint and ordered severance in relation to it. Otherwise the application was dismissed.

17 In allowing the appeal of the accused, the Court of Appeal held that the proposed coincidence evidence suffered from serious defects.[3] However, before so finding, the Court of Appeal identified the questions that needed to be addressed in relation to coincidence evidence as a result of the language set out in s 98(1).

18 The Court of Appeal said as follows:[4]

[T]he questions to be addressed in relation to coincidence evidence are as follows:

Are the similarities in the specified events and/or in the circumstances in which they occurred such that it is improbable that the events occurred coincidently?
If so, would the evidence of those events and circumstances tend to prove that the accused:

(a) did the specified act; or

(b) had the specified state of mind

where doing that act or having that state of mind is a fact in issue or is relevant to a fact in issue?

If so, does the evidence have significant probative value, either by itself or having regard to other evidence adduced or sought to be adduced by the prosecution?
If so, does the probative value of the evidence substantially outweigh any prejudicial effect it may have on the accused? (Original emphasis.)

19 Question 4 there posed is only relevant in the context of a criminal trial: see Evidence Act, s 101. The Court of Appeal expressed some limitations in relation to the questions as formulated above. It stated that in argument before it, it only directed itself as to the lack of probative value of the coincidence evidence. Their Honours said, accordingly, their comments on other aspects of the coincidence evidence were intended to be of assistance, but in the circumstances should be treated as tentative views.[5]

20 These questions as formulated by the Court of Appeal had been the subject of some criticism.[6] However, I need not dwell on such matters as the Court of Appeal has confirmed the approach taken in CGL v Director of Public Prosecutions.[7]

21 Accordingly, I proceed by addressing the 3 relevant questions formulated by the Court of Appeal.

22 Before turning to those questions, it is appropriate that I make some observations about the evidence already before me in this case.

23 Both Bodycorp and the defendants have advanced evidence to support the following propositions:

(1) To be a recommended repairer is very valuable to a panel beater.

(2) A recommended repairer of AAMI is given a sign to display at its shop.

(3) The sign is also very valuable to a panel beater.

(4) Whether or not a panel beater is to be recognised as a recommended repairer of AAMI is solely and entirely within AAMI's discretion, as AAMI has the ability to terminate a recommended repairer agreement without cause upon giving 14 days' notice of termination.

24 From these facts that are common ground, it is incontrovertible in my view that it would not be in the commercial interests of any current recommended repairer to voluntarily give evidence in a court case for a party whose interests were inimical to those of AAMI. In the particular circumstances of this case, the relevant franchisees would have no interest in giving evidence for Bodycorp given that Bodycorp's case is that these franchisees wrongfully breached their respective franchise agreements.

25 To be clear, in making these observations, I say nothing about AAMI's position. I certainly do not make any suggestion that AAMI's conduct in relation to such matters is anything other than proper. The simple point is that it is not surprising that Bodycorp does not have the franchisees referred to as the category A franchisees and the category B franchisees as witnesses in its case.

E. The evidence and materials the subject of the application

26 In order to seek to establish that the Statement and the AAMI Statement (as pleaded respectively in paragraphs 15 and 20 of the ASOC) were made and that they were made with the requisite intention to establish the causes of action, Bodycorp has sought to adduce evidence from Bodycorp franchisees at the relevant times. None of these franchisees were category A franchisees or category B franchisees as defined in the ASOC.

27 Pursuant to orders of the court, outlines of evidence were filed. The relevant evidence to be led as identified in those outlines is as follows:

(1) Nick Ciancio, being a franchisee at the Glenroy franchise:

In early 1999, Ciancio was visited at his Glenroy shop by Mr Barry Martin, the Repairer Liaison Manager of AAMI, on a number of occasions. Martin told Ciancio that Bodycorp has issued legal proceedings against AAMI and him (Martin) personally.
Martin said to Ciancio that if Glenroy wished to leave Bodycorp, then AAMI would continue to support it, that it would not lose its recommended repairer status and would save the 8% franchise fee being paid to Bodycorp. Martin also said that if Glenroy left, AAMI would support it with more quoting opportunities.

In April or May of 1998, Mr Barry Martin of AAMI spoke to Corso at Highpoint. Barry said that AAMI had issues with Bodycorp, and that Highpoint would be better off leaving Bodycorp and saving the 8% franchisee fee. Corso replied that he was happy with the arrangement with Bodycorp.
Shortly after, AAMI assessors became increasingly critical of the repair work from Highpoint. Quoting opportunities from AAMI customer service centres were also noticeably less profitable, being only small jobs.
At about this time, Corso spoke with Mr John Oliveri at the AAMI North Melbourne Customer Service Centre. Oliveri suggested that Corso should leave the Bodycorp group. Oliveri said words to the effect that AAMI would look after Highpoint if it left Bodycorp, it would keep its recommended repairer status and save the 8% franchise fee. He also said that AAMI assessors would assist in quoting.

Bodycorp held monthly meetings with franchisees to discuss group issues. On a number of occasions at these meetings, Crea was approached by Mr Michael Maisano, who operated Moorabbin Automotive and was a Bodycorp franchisee. Maisano said that a breakaway group of Bodycorp franchisees was being formed, and that he has assurances of support from Mr Barry Martin of AAMI. Maisano told Crea that if franchisees got together and left the Bodycorp group, it would be easier for AAMI to support the franchisees to whom (sic) left Bodycorp and that the franchisees would make more money.

Crea spoke with Martin who said words to the effect "you should consider leaving the franchise as it would be more profitable, otherwise you'll go down with them".

(4) Luciano Lantieri, being, to use neutral terms, involved in relation to the Heidelberg operation - I do not use the word franchise by reason that there is an issue between the parties on this - and also being a franchisee at Airport West:

In May or June 1998, Mr Scott Munro approached Lantieri. Munro said words to the effect that "if you want to leave Bodycorp let me know and I will arrange it for you. There is no need to stay in Bodycorp and pay commission to them. I left and kept my sign".
In October 1998, Mr Barry Martin of AAMI met with Lantieri. Martin suggested that L&M should leave the Bodycorp group.

(5) Mimma Lantieri, being the wife of Luciano Lantieri who had the same association in relation to Heidelberg and Airport West:

In September 1998, Mr Barry Martin of AAMI began attending L&M premises on a monthly basis to discuss operations and statistical analyses of L&M performance. Martin said words to the effect that "do you think it is worthwhile paying Bodycorp 8%" and "what do you get out of being part of Bodycorp".

In late 1998, Mellor was visited by Mr Barry Martin of AAMI. Martin said words to the effect that "if Bodycorp ceased to work, AAMI will continue to support you and you will keep your AAMI recommended repairer status".

28 Submissions were made by counsel for the respective parties based on the contents of the outlines of evidence. As only outlines were before the court, rather than witness statements or affidavits, I ruled that I would allow each of the witnesses to be called, but the evidence would be taken on a voir dire. I indicated to the parties yesterday I would rule on the admissibility of the evidence given during the course of the voir dire upon its completion. Each witness I have referred to was duly called by Bodycorp, gave evidence-in-chief and was subjected to cross-examination.

29 No further submissions were made by counsel at the end of the voir dire.[8] I do not intend to comment on the evidence of these witnesses at this stage of the trial. It is enough for present purposes to say that broadly speaking, with the exception of Mr Luciano Lantieri, the witnesses gave evidence on the matters referred to in their outlines as set out above.

30 For the purposes of s 98(1), the specified events referred to by Bodycorp are the making of the various representations by the relevant defendants concerning the franchisees continuing to be franchisees of Bodycorp, in circumstances where the franchise agreements were still on foot. The specified particular acts or particular states of mind referred to by Bodycorp were the making of the Statement and the AAMI Statement as pleaded in the ASOC, in each case with the relevant intention. Those matters are relied upon for the purposes of s 98(1).

31 With this background, I now turn to the questions which arise out of the language of s 98(1). The first question:

Are the similarities in the specified events and/or in the circumstances in which they occurred such that it is improbable that the events occurred coincidentally?

I have no doubt this question must be answered in the affirmative. There are 5 witnesses who have given evidence of events on the subject matter, some of whom have given evidence of numerous representations to the effect referred to in the outlines. The representations are proximate in time and were all said to be made in circumstances where the persons involved were current and ongoing franchisees of Bodycorp. In my view it is not plausible to suggest, if the evidence is accepted (about which I make no comment), the events to which it refers were merely coincidental.

Would the evidence of those events and circumstances tend to prove that the relevant defendants:

(a) did the specified act; or

(b) had the specified state of mind,

where doing that act or having that state of mind is a fact in issue or is relevant to a fact in issue?

33 Without identifying precisely the evidence given by each witness, it is clear the making of the representations said to be made by these witnesses is, at the very least, relevant to a fact in issue. To put it bluntly, and only by way of example, if it be the case that a person made representations to a large number of franchisees that they should breach their contracts with the franchisor as it would be in their interests to do so, that evidence would be highly relevant and probative to the question of whether such a representation was made to a further franchisee in a like position to the others. Of course, I am not suggesting that reflects the evidence, but I give that example to demonstrate the point.

34 Turning to the evidence itself, it is my view that the evidence given, if accepted (and again I emphasise I make no comment on this point), would tend to prove that the relevant defendants made the Statement and the AAMI Statement referred to in paragraph 15 and paragraph 20 of the ASOC. Although none of the witnesses gave evidence precisely in the terms of the Statement or the AAMI Statement, the evidence that was given could rationally affect the court's assessment of the existence of the facts and/or states of mind alleged by Bodycorp in the ASOC.

Does the evidence have significant probative value either by itself or having regard to other evidence adduced or sought to be adduced by Bodycorp?

36 That the evidence must have significant probative value indicates the evidence needs to be more than simply relevant, as that term is used in s 55 of the Evidence Act.

37 What more is required is obviously not identified by way of a bright white line. Cases on this issue have referred to the requirement of the evidence being "important" or "of consequence".[9] That said, the statutory test is not capable of more precise language and the word significant must be given its natural and ordinary meaning within the context of s 98 and the Act as a whole.

38 His Honour, Sackville J, in the context of s 97 of the Evidence Act dealing with tendency evidence, stated in Jacara Pty Ltd v Perpetual Trustees WA Ltd as follows:[10]

The probative value of the evidence as tendency evidence must depend on the circumstances of the case. The factors to take into account will usually include the cogency of the evidence relating to the conduct of the relevant person, the strength of the inference that can be drawn from the evidence as to the tendency of the person to act in a particular way, and the extent to which the tendency increases the likelihood that a fact in issue occurred.

39 I adapt that language for the purposes of understanding the term "significant probative value" in s 98.

40 The requirement of significant probative value must be something that the court "thinks" is in existence. As Perram J said in Combined Insurance Co. of America v. Trifunovski (No 4):[11]

The word, "thinks" underscores that the test involves "a degree of value judgment".

41 On the assumption that the evidence of the witnesses in question is accepted, in my view that evidence is of significant probative value in relation to the question of whether the matters alleged in paragraphs 15 and 20 of the ASOC occurred, and also whether the requisite intent existed. I say this on the basis of the evidence viewed collectively, and also when viewed in isolation, subject, of course, to there being at least 2 events.

42 The defendants have pointed to a large amount of correspondence and other documentation which either directly contradicts, or might be said to contradict, the evidence the subject of the voir dire.[12] The existence of such evidence does not alter my view.

43 Under s 98(1), I am required to consider the evidence by itself or having regard to other evidence adduced, or to be adduced, by Bodycorp. That is, it is not an exercise which involves looking at the evidence generally.

44 Some of the documents referred to by AAMI and Martin were documents referred to and relied upon by them. Those documents are simply not relevant for the purposes of the court's considerations under s 98(1). To the extent that the documents referred to are documents that have been tendered by Bodycorp, I have reviewed them all. There is nothing in those documents that would suggest to me that the probative value of the relevant evidence is diminished by reason of that documentary evidence. The fact that other explanations might have been given by the relevant franchisees to justify their conduct in leaving the Bodycorp franchise does not detract from the evidence given on the voir dire.

G. Section 135 of the Evidence Act

45 AAMI and Martin have also sought to rely upon s 135 of the Evidence Act. That allows a court to refuse to admit evidence in certain circumstances.

46 The first such circumstance, under s 135(a), is where the evidence would be unfairly prejudicial to a party. Initially a submission was made that the evidence was unfairly prejudicial. As I understood it, that submission was withdrawn. In any event the evidence is plainly not unfairly prejudicial. Martin was clearly able to instruct, and in fact had instructed, his counsel on the matters raised. Both senior and junior counsel were able to cross-examine on the matters the subject of the voir dire without any need for an adjournment.

47 The second matter, under s 135(b), is where the evidence might be misleading or confusing. In that regard, I understood the submission to refer to the contents of the outlines. The evidence itself has now been given and it was neither misleading nor confusing; for the most part, it was simply evidence of what various former Bodycorp franchisees allege Martin said on a number of occasions.

48 The third matter, under s 135(c), is the issue of whether it would cause or result in undue waste of time. In relation to Bodycorp's evidence, it cannot be said that there would be any undue waste of time. The evidence has now been heard under the voir dire; there will be no extra time in Bodycorp's case if the evidence is treated as admissible. The only additional time will be that occasioned by Martin having to give evidence on the matters raised on the voir dire. This cannot properly be characterised as "undue" if, as I have found, s 98(1) has been satisfied.

49 Accordingly, subject to one matter I will come to, I direct the evidence the subject of the voir dire, commencing at T991.14 through to the lunchtime break today, be evidence in the trial.

50 The exception is a matter for the defendants. Mr Luciano Lantieri's evidence (I refer to T1010.21-1012.15) did not seem to advance the case of Bodycorp at all, and was certainly not probative of anything relevant. However, the defendants may wish to keep the evidence in. I will invite counsel to address me on this point.

[6] See Odgers Uniform Evidence Law in Victoria (2010), 430-431 [1.3.6880].

[7] See Nam v R [2010] VSCA 95, [4], [25] and [26].

[8] I gave counsel the opportunity to make supplementary submissions, but no party sought to be heard further.

[9] See Jacara Pty Ltd v Perpetual Trustees WA Ltd [2000] FCA 1886; (2000) 106 FCR 51, 69 [73]-[74], referring to R v Lockyer (1996) 89 A Crim R 457, 459.

[10] [2000] FCA 1886; (2000) 106 FCR 51, 69 [76] (with whom Whitlam and Mansfield JJ agreed).

[11] [2011] FCA 271, [11], citing Jacara Pty Ltd v Perpetual Trustees WA Ltd, 69 [74].

[12] It is sufficient to identify this documentation by way of reference to the court book, at pp 4651, 4782, 4797-4798, 4799-4800, 4806, 4821, 4838, 4852, 4877, 4928, 4932, 4937, 5138, 5207-5209, 5218, 5391 and 5398-5399.

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