Judicial notice
120 I turn to the question whether the primary judge was entitled to take judicial notice that tax avoidance is endemic in the building industry.
121 This appeal was argued on the basis that it concerned the common law doctrine of judicial notice. However it should be noted that the continued application of that doctrine in New South Wales is in some doubt as a result of Gattellaro v Westpac Banking Corp [2004] HCA 6; (2004) 78 ALJR 394, a case to which neither party referred. In that case, Gleeson CJ, McHugh, Hayne and Heydon JJ said (at [17]) that "[i]n New South Wales there would appear to be no room for the operation of the common law doctrine of judicial notice, strictly so called, since the enactment of the Evidence Act 1995 (NSW), s 144". This statement was no doubt expressed in qualified terms because Westpac had conceded (see [15]) that the majority in the Court of Appeal had not been entitled to deploy the doctrine of judicial notice in the manner it did. In the light of that concession Gleeson CJ, McHugh, Hayne and Heydon JJ said (at [16]) that it was not necessary to deal with the judicial notice question in detail.
122 Section 144 of the Evidence Act 1995 provides:
" 144 Matters of common knowledge
(1) Proof is not required about knowledge that is not reasonably open to question and is:
(a) common knowledge in the locality in which the proceeding is being held or generally, or
(b) capable of verification by reference to a document the authority of which cannot reasonably be questioned.
(2) The judge may acquire knowledge of that kind in any way the judge thinks fit.
(3) The court (including, if there is a jury, the jury) is to take knowledge of that kind into account.
(4) The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced."
123 The High Court held in Gattellaro v Westpac Banking Corp, applying s 144, that it was not open to the Court of Appeal to conclude that Westpac had a standard form guarantee. Gleeson CJ, McHugh, Hayne and Heydon JJ said (at [18]):
"[18] Knowledge of the proposition that institutions such as Westpac use, or at any particular time used, a standard form guarantee is not common knowledge, either in Sydney, which is the locality in which the proceeding was held, or generally. Nor is it knowledge capable of verification by reference to a document the authority of which could not reasonably be questioned. Further, it has not been demonstrated that the majority of the Court of Appeal gave the Gattellaros an opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of the knowledge in question as was necessary to ensure that they were not unfairly prejudiced . Indeed, counsel for both sides said that the judicial notice issue was raised by the Court of Appeal for the first time in its judgments. For these reasons judicial notice could not be taken in the way the majority of the Court of Appeal did." (emphasis added)
124 Kirby J agreed (at [69]) that the majority in the Court of Appeal was in error in its use of the doctrine of judicial notice. He did not express an opinion as to the relative relationship between the common law doctrine of judicial notice and s 144.
125 It is not necessary to explore the question whether s 144 has, in fact, displaced the common law doctrine of judicial notice as, in my view, the same result would be achieved in this case whichever be applied. It is pertinent, however, to outline the basic tenets of the common law doctrine which, in any event, provide the background to s 144: CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ.
126 The classic Australian exposition of the doctrine of judicial notice is found in Isaacs J's judgment in Holland v Jones (1917) 23 CLR 149, a case concerned with the question whether evidence was required of the identity of the Minister of Defence, proof of whose consent in writing to institute a prosecution for contravention of the War Precautions Act 1914-1916 (Cth) and the Regulations thereunder was essential to the proceedings' validity. A Police Magistrate had concluded that the necessary consent was established "by reading the document in which it was said to be contained, and by saying 'I am satisfied that the signature 'G F Pearce' following upon the words 'I consent to this prosecution' appearing on the face of the information is the signature of G F Pearce whom I know to be the Minister for Defence and whose signature as such Minister I have seen on many informations which have come before me": Holland v Jones (at 152). He convicted the accused who appealed on the basis (inter alia) that there was no evidence of the consent in writing of the Minister for Defence.
127 Isaacs J (with whose judgment Barton ACJ concurred) rejected that argument as based upon a misconception of what was meant by "judicial notice". His Honour (at 152) identified the doctrine of judicial notice as operating in the area where:
"… certain relaxations [from the strict rules to which Courts ordinarily adhere when determining controversies between litigants] are recognized and acted on where justice is thereby better served . " (emphasis added)
128 According to his Honour (at 153):
"The only guiding principle--apart from Statute--as to judicial notice which emerges from the various recorded cases, appears to be that wherever a fact is so generally known that every ordinary person may be reasonably presumed to be aware of it , the Court 'notices' it, either simpliciter if it is at once satisfied of the fact without more, or after such information or investigation as it considers reliable and necessary in order to eliminate any reasonable doubt.
The basic essential is that the fact is to be of a class that is so generally known as to give rise to the presumption that all persons are aware of it . This excludes from the operation of judicial notice what are not 'general' but 'particular' facts." (emphasis added)
129 Applying that principle, his Honour concluded (at 154) that "it would be mere idle affectation for an Australian Court not to 'know' - more particularly in war time - who is the Minister for Defence".
130 In Munro v Tooheys Ltd (1991) 29 FCR 74 at 91, Beaumont J (quoting E M Morgan, Some Problems of Proof under the Anglo-American System of Litigation, at p 61) said "the party seeking judicial notice 'has the burden of convincing the judge that (a) the matter is so notorious as not to be the subject of dispute among reasonable men or (b) the matter is capable of immediate accurate demonstration by resort to readily accessible sources of indisputable accuracy' ". Applying that test his Honour held that "the question of drinking habits in the community is not a matter of this kind. It is not something so notorious or so demonstrable that evidence of it is not necessary …".
131 It might be accepted that tax evasion and avoidance takes place in the building industry. The 2003 Final Report of the Royal Commission into the Building and Construction Industry - Reform - National Issues Part 3 makes that plain: see http://www.royalcombci.gov.au/hearings/reports.asp. At the same time the Report also observed (Volume 9, ch 16, [3]) that "views vary about the extent of tax evasion and avoidance …".
132 It is questionable, in my view whether the bald assertion employed by his Honour (tax avoidance is endemic in the building industry) is a matter which "every ordinary person may be reasonably presumed to be aware of" or not be the subject of dispute or not be reasonably open to question.
133 It is not necessary to resolve this nice question because the primary judge was not entitled to take judicial notice of this "fact" in reaching his conclusion that the respondent was assaulted in the course of employment without giving the parties an opportunity to deal with its significance in the circumstances of the case. As Isaacs J said in Holland v Jones judicial notice can be used to determine controversies "where justice is thereby better served". In like vein, in Woods v Multi-sport Holdings Pty Limited [2002] HCA 9; (2002) 208 CLR 460 at [163], Callinan J said:
"It would be unfair and entirely unsatisfactory for [the losing] party to learn, after the event, for the first time, that he or she lost because the Court resorted to extrinsic, allegedly notorious facts with which he or she had no opportunity to deal."
134 Section 144 (4) also requires a judge intending to take matters of common knowledge into account to give a party "such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced". As Gattalero v Westpac Banking Corporation demonstrates, failure to afford the parties that opportunity means the Court could not make use of judicial notice.
135 Mr Evatt relies upon the exchange between the primary judge and Mr Smith during the course of addresses in which the primary judge said, "this is the building industry" as adequate forewarning to the appellant that his Honour may infer that tax avoidance was a probable motive for paying wages out of cash.
136 Whatever that elliptical remark was intended to convey to Mr Smith, it was not a matter which his Honour took up with Mr Joseph (who by that stage had addressed in chief). Mr Joseph did not address it in reply. I accept, as Tobias JA has said (at [47]) that the appellant was on notice of the cash from jobs case.
137 I do not accept that the exchange between the primary judge and Mr Smith was appropriate to put the appellant on notice of the use his Honour intended to make of his passing reference to this being "the building industry".
138 The significance of his Honour's reliance on the tax avoidance theory can be seen from his Honour's approach to the bank accounts. His Honour treated the absence of wages cheques drawn from the bank account as some evidence supporting the proposition the respondent was paying wages from cash he had collected from jobs. If this is correct then the fact wages cheques had not been drawn for the several months during which the respondent said his business was operating, would, on his Honour's findings reveal systemic tax avoidance. The proposition that the respondent was engaged in such conduct would, had it been part of the respondent's case, have elicited detailed cross-examination and raised further issues about his credibility. Furthermore, his Honour does not appear to have entertained the proposition, to which I have earlier referred and which, in my view, was an available inference, that the rarity of wages cheques supported the appellant's case that the respondent was not carrying on the business for which he contended.
139 Other issues which might have been canvassed at trial include the credibility of the tax avoidance theory having regard to matters such as those the appellant raised concerning the tax deductibility of wages. Conversely, as Mr Evatt submitted, consideration would have to be given to the misrepresentation inherent in understating income in order to minimise tax. None of these matters were explored because the tax avoidance case was not raised or argued below.
140 In my view the appellant has established that the primary judge erred in law in using judicial notice without notice to the parties.
141 I also accept the appellant's submission that the primary judge's conclusion depended upon a rationalisation which lacked evidentiary foundation. It was not the respondent's case that he was carrying cash to pay wages because he was engaged in tax avoidance. This was "an entirely new case with which the losing party had no testimonial or other evidentiary opportunity to deal": Suvaal (at [36]). That, too, constituted an error of law.