Crown Glass & Aluminium P/L v Ibrahim

(b) resolved the case by a process of rationalisation which was not based on the evidence and with which the appellant had no testimonial or other opportunity to deal. 62 The appellant's fundamental case, therefore, is that it was denied procedural fairness in that the primary judge resolved the case on bases which it was not given the opportunity to address. A denial of natural justice in this respect would constitute an error of law: Escobar v Spindaleri (1986) 7 NSWLR 51; Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 186 per Handley JA. Such an error may only be reviewed on appeal if it vitiated the ultimate decision: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 153, 155 and 157 per Glass JA with whom Samuels JA agreed; Yates Property Corp Pty Limited (In Liq) v Darling Harbour Authority (at 177); Minister Administering the Crown Lands Act v Deerubbin LALC (1998) 43 NSWLR 249 at 254 - 255; Terrace Towers Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 at [30]; Miller v Commissioner of Police NSW [2004] NSWCA 356 at [26]; Hevi Lift (PNG) Ltd v Etherington (at [63]).

Statement of the case 63 In order to appreciate the appellant's complaints it is necessary to consider closely both how the case was conducted and the primary judge's reasons. 64 Before the primary judge the respondent's case was that he had incorporated the appellant in 1999 and, through it, carried on business renovating shops and "doing shopfronts in glass and aluminium". 65 The respondent gave evidence that on 5 November 1999 he was working at Westfield Shopping Centre and attended Sydney Glass at Bankstown at about 1.00 pm. He left Bankstown to go to his home originally, he said, because one of his employees, a Mr Francis, telephoned him and informed him that he had lost the key to the business's utility. The respondent said he would go home to pick up a spare key. On his way home Mr Francis called him and told him that the key had been found. The respondent said he decided, nevertheless, to return home. At trial, he gave various reasons for this decision. One was that he wanted to visit his wife who had recently given birth. He also said that he was going home to prepare wages as 5 November 1999 was a Friday. 66 He arrived at his home at about 2.00 pm and pulled up in Robert Lane, Marrickville. He said that as he was getting out of his car he was assaulted by three people wearing hats and sunglasses. He was punched on the head and hit about four or five times with a baseball bat. A gun was placed to his head whilst the assailants carried out a search. He said that at the time he was carrying $8,000 in cash which the assailants stole. 67 It is convenient to outline the appellant's approach at trial. The arguments advanced were pursued both in cross-examination of the respondent and by reliance upon contemporaneous documents. 68 The appellant put in issue at trial whether the assault occurred in the course of the respondent's employment. The appellant's case was that the assault had nothing to do with the respondent's business, if he was conducting one. Indeed, the appellant asserted that the respondent's business was a sham. 69 The appellant argued (inter alia) that the respondent's evidence that he had $8,000 in cash on him, which was stolen during the assault, was fabricated in order to explain the assault. 70 The appellant advanced a number of arguments to make good this proposition. He relied upon the respondent's early failure to refer to the cash on occasions when he might be expected to have done so. There was no reference in the respondent's claim form signed on 13 January 2000, to the assertion that one of the reasons the respondent had gone home was to prepare the wages. The claim form was completed with the assistance of the respondent's solicitor who confirmed in it that " the injured worker understands and was made aware of the requirements of the [Workers Compensation] Act ". The respondent acknowledged in cross-examination that the claim form was his document. He had no explanation for not mentioning the payroll in it. It was squarely put to him that on the day of the assault he was not going home " for any reason connected with the payroll ", to which he responded, " put it your way, that's okay " - an answer which no-one at trial appears to have understood as an acceptance of the cross-examiner's proposition. 71 The appellant also relied on the fact that the respondent had not told an investigator apparently engaged by (presumably) the appellant's workers compensation insurer that he was carrying cash for wages at the time of the assault. The respondent had also not told the police investigating the assault that he was carrying, and was robbed of, cash. At first, he had, in fact, told the police to "get lost" and only mentioned the cash "late in the piece". 72 Mr Joseph SC, who appeared for the appellant at trial, also sought to demonstrate that the respondent's story that he was carrying cash when assaulted was false because the source of the money could not be identified. 73 The respondent's evidence of the source of the $8,000 varied. He was asked in chief when he had obtained the money and said that he could not recall but added, unresponsively, that: "If you look at the bank statement it could tell you about some cash cheques being drawn out from it …". 74 He said the money was for "paying wages and … some of the glass that I ordered". 75 In cross-examination he said, at first, that it was correct that he was lodging all credits and taking all monies (expenses) out of the appellant's National Bank account. When it was put to him however that he was not paid in cash, he said that he did get cash for "some jobs" but could not recall whether he was getting cash in October 1999. 76 Later when asked in cross-examination how he knew he was carrying $8,000 when he was assaulted, he said: "A. I know myself because I pulled out from the bank that day a cash cheque I drawn it myself. The day before I drew a cash cheque and we draw [sic, presumably this was 'withdrew'] that money. I can't recall what days but I am always prepared for Friday. These people work and I must go back and give them their pay. Q. That is honourable but what I am asking is how do you know? A. I told you, I wrote a cash cheque for myself ." (emphasis added) 77 Subsequently, the respondent gave the following evidence, again in cross-examination: "Q. In any event, you have told us that the $8,000.00 you had when you were assaulted was all cash? A. Yes. Q. You say all of that came from the bank account ? A. I'd say so, yes . Q. Is that a yes? A. Where else could it come from? Q. That is what I am asking. A. Yes, the bank or a job I must have done and can't recall and got cash for it . Q. Do you recall going to the bank to get the cash which was stolen off you on 5th November? A. No I can't recall what day I did that. The same day, the day before . I can't recall but I did have cash on me . Q. How do you know it was $8,000.00? A. Because I had it on me. Q. Do you remember it was $8,000.00? A. Yes. Q. Did you count it? A. No, I had it ready because I had workers to pay and I have made up - Paul rang me up … and told me how much I had to have for wages and how much I had to have for a glass company to pay for polishing some edges of glass. So that's why I had this $8,000.00 on me. Some of it for wages and some - Q. Well do you recall him ringing you on the Thursday night? A. He must have called me for me to have that much amount of money, for Paul to ring me and tell me what to do the next day where I've got to pay wages or pay things, yes ." (emphasis added) "Paul" was Mr Francis. He was not called. The respondent said he could not be located. 78 Subsequently, while still under cross-examination the respondent repeated that he had either got the money "from the bank or from a job that I done". 79 When pressed, he could not recall any job for which he had been paid in cash. In one answer, he at first did not accept that a Mr Haddad gave him cash then said "[the cash] must have come from Mr Haddad or from another job I have done". Mr Haddad was not called. 80 In the course of oral submissions before the primary judge when counsel for the respondent, Mr Smith, was addressing the question whether the assault had taken place in the course of employment, the following exchange took place: "His Honour: There was certainly a pretty big cash flow about this period of time. Mr. Smith: He says he has done pretty successfully. He has got a Westfield contract. His Honour: He has got Mr Haddad as a client who gives him lots of money. Mr. Smith: He was paying him cash, he says, and he already got Westfield. My friend never put to him - His Honour: This is the building industry. Mr Smith: Well it is you know - there have been many a royal commission …" 81 Counsel for the appellant made submissions in reply, but made no reference to his Honour's remark concerning the building industry.

The primary judge's reasons 82 The primary judge noted that Mr Joseph raised "a plethora of credit issues" with which he argued the Court should deal on either of two core bases:

(a) the Court could not accept anything the respondent said as truthful, or

(b) the respondent was an unsatisfactory and unreliable witness and nothing he said could be relied upon without corroboration. 83 His Honour dealt first with credit issues relating to the respondent's health. The appellant challenged the respondent's credit in this respect by reference to inconsistencies between his evidence concerning his pre-assault medical condition and objective medical evidence which pre-dated the assault. 84 The primary judge concluded that the applicant's evidence concerning medical histories was "not always reliable" and that in making his determinations he should seek corroboration before making a finding in the respondent's favour on a medical issue. 85 Insofar as the respondent's professed business activities were concerned, one of the principal issues the primary judge dealt with as a matter of credit was whether the respondent had $8,000 of the appellant's money on him when he was assaulted. This issue did not only go to credit. It was critical to the respondent's claim that he carried out work at home for his business including making up wages. It was also critical to the appellant's argument that the assault had not taken place in the course of the respondent's employment. 86 Mr Joseph pointed to "the unreality of [the respondent's] claims about his alleged assault" including:

(a) his inconsistent stories about the source of [the moneys stolen] and, (b) his inability to reconcile the sum stolen of $8,000 with his wages requirements. 87 The primary judge summarised the respondent's bank records ([29]-[32]) and concluded: "31. This evidence would suggest that the applicant did not draw, as he said, $8,000 cash at the relevant time - unless of course the cheque butts do not truly record the payee's name and the cheques were indeed drawn for cash as the applicant suggests they could have been."

Mr C Evatt, who appeared for the respondent on appeal with Mr M Rollinson but not below, accepted that the respondent had not given any evidence that the cheque butts did not truly record the payees' names. 88 The primary judge then observed that of the cheque butts in evidence between 7 July 1999 and 24 March 2000, only two related to wages. One was a cheque for $414.00 which made out to the Commissioner of Taxation and the other a cheque for $4,000 made out to "wages". Mr Joseph relied upon those facts, his Honour noted, to "raise the question as to whether the [respondent] was paying a workforce at all and indeed whether the business was genuine". 89 His Honour then said: "34. The strong, inference I draw from the evidence is not that the shopfitter's business did not exist but that the applicant in an industry where tax avoidance is endemic, was conducting a substantial part of his business transactions in cash notably the payment of himself and his employees . 35. I have reached this conclusion on the balance of probabilities after considering the following evidence: (1) The bank statements, cheque butts, taxation returns and insurance documents all strongly suggest that the respondent company was engaged in the building industry. The respondent insurer who employed investigators to protect its interests and who obtained statements from the applicant which noted details of significant business transactions such as the major project for the East Gardens jeweller and the visit to Sydney Glass has not put evidence before the Court from clients building suppliers or alleged employees to substantiate its claim that the business was a sham. (2) The applicant made some revealing admissions that explain why only one cheque was drawn for wages while the business was operating viz: · At T2, 24.8 he admitted he had cash in his hands on 3rd and 4th November 1999. · At T2, 24.10 he said 'Okay, well probably on those days I have put cheques in, or put cash deposit into my account probably because of cheques I had to write out for previous things or other things. I'm not denying it, yes I did have the cash'. · At T2, 24.21 the following exchange took place: 'Q. And on 3 November you say he (ie Mr Haddad gave you two lots of cash? A. Yes and what is wrong with that? Q. Are you saying that on the same day he gave you two different lots of cash, one of $3000 and one of $5000. A. I'm not saying that, I can't recall who gave me that money but I was working, it was working money. I suppose it must have come from Mr Haddad or from another job ive done'. · At T2, 25. Joseph SC pinned the applicant down even further: 'Q. In any event you have told us that the $8000 you had when you were assaulted was all cash? A. I'd say so yes Q. Is that a yes? Q. Do you recall going too the bank to get the cash which was stolen off you on 5 November? A. No I can't recall what day I did it. The same day the day before. I can't recall but I did have cash on me.' (3) It is clear from the applicant's language that he was reconstructing the manner in which he obtained the $8000 he says he had on his person when assaulted on 5 November 1999. The only two facts that he consistently asserts are his recollection of Mr Francis telling him that the wages bill was $8000 and his recollection that he had sufficient cash on him to pay the wages bill including his own drawings at that time. (4) It is of interest that the major cheques drawn on the 4th and 5th November 1999 add up to $8000 which does raise the question of whether the payees mentioned on the cheque butts were genuine. However the fact that only one week's wage bill during the several months the business operated was drawn by cheque strongly suggests that Mr Ibrahim was paying his wages using cash he had collected from clients for whom he was performing work . (5) The applicant's accountant Mr Barakat initially denied any knowledge or professional relationship with the applicant and refused to come to court. Eventually he admitted knowing the applicant but denied having any business records in his possession. Neither party put before the Court any evidence from the Liquidator concerning the state of the respondent company books. (6) I have concluded on the balance of probabilities that the applicant was, as he admitted, obtaining payment for work in cash and paying the wages out of those cash receipts . 36. Given that I accept on the facts that the business was genuine it follows that employees had to be paid and it was highly likely that Mr Ibrahim as the boss with control over the funds would have cash on his person on Fridays when wages are normally made up. 37. My findings of fact do not reflect well on the manner in which the applicant operated his business . However the issue in this instance is whether he had cash on his person at the time of the assault and I find on the balance of probabilities that he did." (emphasis added) 90 At a later stage in his judgment when dealing with another credit issue concerning the fact that $63,000 was deposited into the appellant's bank account at a time when the respondent was said to be on light duties, the primary judge noted the respondent's evidence: " 43. You can see I have had extra people, extra tax that's been paid from the cheques to the accountant . So whenever I had a big job I have had other people. One hand doesn't clap. I can't do a $210,000 job on my own so I had to get other employees and put them on the books for the hours they were working, pay the tax , do the job proper." (emphasis added) 91 His Honour then said: " 44. To my mind the applicant's response ( with the possible exception of the tax reference ) is credible and corroborated by the documentary evidence. There is no credit point here." (emphasis added) 92 Insofar as the appellant sought to challenge the respondent's credit on matters related to his business activities, it is a fair summary of his Honour's judgment to say that he did not expressly resolve that issue adversely to the respondent. 93 Having dealt with the credit issues the primary judge turned to consider the question whether the assault occurred in the course of the respondent's employment. In dealing with Mr Joseph's submission that the respondent's story about the assault had "an air of unreality about it", his Honour noted that submission was relevantly based on the proposition that: "(a) The applicant has not proved from the bank records that he drew the cash for the wages he said he was going to make up. The story about the cash is really about explaining why he was assaulted as otherwise it made no sense for robbers to be waiting for him with guns and a baseball bat in the lane beside his home. (b) The applicant's evidence that he drew a cheque for the wages is demonstrably wrong. (c) There is no corroboration of the applicant's evidence that he used his home as an office. There is not one business record produced to the court to establish any office work going on, no books of account, wages records, invoices, quotations, job designs or specifications." 94 His Honour considered the law on course of employment, then dealt with the wages issue. In this respect, he said: "72. I have previously decided on the facts that Mr Ibrahim did make up wages for himself and his employees on Fridays and that notwithstanding the fact that on the face of the banking records he had drawn no funds that on the balance of probabilities the monies for the wages was in his possession in the form of cash payments from clients ." (emphasis added) 95 This was a reference to his Honour's conclusion in the credit section of his judgment at [34] - [37] which I have set out above. 96 Subsequently, his Honour referred again (at [77]), to the fact that he had found that the respondent "was using cash payments made to him by clients to make up his wages". 97 Taking all the evidence into account, the primary judge concluded (at [79]) that one of the reasons the respondent had for going home on 5 November 1999 was to make up the wages. Accordingly, his Honour rejected Mr Joseph's submission that the assault had an air of unreality about it and held that the assault occurred in the course of the respondent's employment with the appellant.

Arguments on appeal 98 Mr P Neil SC, who appeared for the appellant with Mr H Halligan on appeal, submitted that the primary judge's finding that the respondent was assaulted while on his way home to prepare wages was critical to his finding that the respondent was in the course of his employment at the time of the assault. He argued that that finding was only open on the basis that the respondent had $8,000 or a substantial amount of cash on him at the time he went home and that he was using that cash to pay wages. Mr Neil pointed out that the respondent had not made any admission that he was paying wages out of cash receipts of the business and argued that a finding that he was, was not open on the evidence. 99 Mr Neil argued that once the respondent's evidence as to the source of cash had been exposed in cross-examination as impossible, the only finding, consistent with the evidence, was that the respondent did not have a significant amount of cash on him at the time he returned to his house, hence had not gone home to make up his wages and hence was not in the course of his employment when assaulted. 100 Mr Neil contended that the primary judge's finding that the respondent worked in an industry where tax avoidance was endemic was critical to the inference he drew that the respondent was paying himself and his employees in cash for tax avoidance reasons. He submitted that, without expressly saying so, the primary judge had taken judicial notice of the fact that tax avoidance was endemic in the shop-fitting business. He argued that it was not a notorious fact of which judicial notice could be taken, that tax avoidance was endemic in the building industry. He also contended that by resorting to judicial notice without forewarning the parties the primary judge had deprived the appellant of the opportunity to put submissions first, as to whether his Honour was entitled to take judicial notice of that "fact" and, secondly, if he was entitled to do so, the use he could make of that "fact" in the circumstances of the case. 101 In his written submissions, Mr Neil observed that wages are a tax deductible expenditure of the business and that the primary judge had not explained how the payment of wages in unrecorded cash could achieve a tax avoidance purpose. 102 Mr Neil also argued that the primary judge's finding that the respondent had cash on him for wages when assaulted and, was in the course of his employment was "merely his own rationalisation of what occurred", was not based on the evidence and, indeed, was contrary to the evidence. He submitted that the primary judge had created a new case with which the appellant had no opportunity to deal: cf Suvaal v Cessnock City Council [2003] HCA 41; (2003) 77 ALJR 1449 per Gleeson CJ and Heydon J (at [36]) per Callinan J (at [149]). 103 Mr Evatt submitted that the primary judge's finding that the respondent was carrying cash for wages when he was assaulted was reasonably open on the evidence. He argued that while the respondent's evidence concerning the source of the cash "did change and [was] not definite", there was, in fact, evidence that the $8,000 in cash was not necessarily the proceeds of cash cheques but was "probably, or possibly, also in part from ATM withdrawal(s)" or other "cash from work", or from "a job I must have done and got cash for", or "work that we've done". 104 Mr Evatt also contended that the primary judge had not definitely rejected the cash from cheques explanation, merely observed that it was contradicted by the cheque butts at the crucial time and then concluded that the cheque butts were not necessarily accurate. 105 Mr Evatt argued that it was accurate for the primary judge to summarise the respondent's evidence as an "admission" that some substantial part of the $8,000 was cash that had been received from customers and had not been banked. He also contended that the primary judge's inference that tax avoidance was a probable motive for paying wages out of cash that was received from customers was reasonably open. Mr Evatt's written submissions asserted: "If customers pay in cash, wages and other expenses are paid from the cash and only any balance remaining is then banked, it can be represented that this balance was the only income ever received. If the only record of many expenses is incomplete or inaccurate cheque butts, it is possible to claim deduction for the expenses against this balance." 106 Mr Evatt contended that the primary judge's finding concerning the source of the $8,000 was not made without forewarning to the parties, referring to his Honour's observation during oral submissions that "[t]his is the building industry". 107 Mr Evatt acknowledged that it was not the respondent's case at trial that he was receiving money or making payments of wages out of cash in order to avoid tax. He queried, however, whether the primary judge had made any such finding.

Consideration 108 The passages from his Honour's judgment which I have set out demonstrate that he:

(a) rejected (at [31], [35]) the respondent's evidence that the $8,000 was drawn from his bank account;

(b) accepted the respondent's evidence that he was carrying $8,000 cash which came from "a job that I'd done" (the "cash from jobs case");

(c) was only able to reach the last conclusion by the following process of reasoning, which was either expressly or implicitly set out in his judgment:

(i) the respondent was engaged in the building industry;

(ii) tax avoidance was endemic in the building industry; (iii) the use of cash in the building industry is a method of tax avoidance; (iv) the appellant's bank records showed only one wages cheque drawn in several months; this strongly suggested the respondent was paying his wages using cash; (v) the respondent was receiving cash from jobs which he was not banking; (vi) the respondent was paying wages using the cash he had received from jobs but not banked; (v) the respondent carrying on business in the manner recorded in the last three sub-paragraphs because he was engaged in the tax avoidance endemic in the building industry. 109 Although the primary judge accepted that the respondent was "reconstructing the manner in which he obtained the $8,000" (at [35] (3)), this could only have been true to a limited extent. The appellant's bank records were available. The respondent was cross-examined on what they disclosed. When confronted with the proposition that they did not support his principal explanation that the $8000 came from a cash cheque drawn on the bank account, the respondent resorted to the cash from jobs explanation. 110 The bank records demonstrated, to the primary judge's satisfaction (see [31] and [35] (4)), that the respondent's principal explanation for the source of the $8,000 could not (to put it neutrally) be accepted. It might have been thought that this conclusion would have reflected adversely on the respondent's credit. His Honour appears to have avoided making an adverse credit finding in this respect because he concluded that the respondent was reconstructing the manner in which he had obtained the $8,000. 111 It is apparent that the primary judge regarded the cash from jobs case as a bald assertion which required "corroboration" or, some sort of rationale, in order to command acceptance. He sought that corroboration, in my view, because he had already rejected one explanation the respondent had given. It was consistent with the approach he had taken to the respondent's medical history, that the primary judge would then look for corroboration for the cash from jobs case. Such an approach also reflected acceptance, albeit not expressly stated in this context, of the appellant's two core credit attacks. 112 The primary judge clearly regarded the absence of wages cheques as inadequate, alone, to support the cash from jobs case. That may have been because, although again his Honour did not expressly so state, the absence of wages cheques was equally consistent with the appellant's case that the respondent's business was a sham. 113 Accordingly his Honour looked, in my view, for "corroboration" or a rationale for the cash flow jobs to the theory that the respondent was carrying cash because he was engaged in tax avoidance. I say "theory" because, as Mr Evatt conceded, not surprisingly the respondent did not advance a case at trial that he was carrying cash or paying wages from cash because he was engaged in tax avoidance. 114 In the ordinary course one might have thought that a process of ratiocination, one step of which was premised on the proposition that the respondent was engaged in an illegal activity, would have given pause for thought concerning his credibility. His Honour does not appear to have considered this, commenting merely (at [37]) that his "findings of fact [did] not reflect well on the manner in which the applicant operated his business". Mr Evatt suggested that that observation was made in relation to the manner in which the respondent conducted his business by putting much, but not all, of his cash in the bank, the absence of information on cheque butts and the failure to produce books. In my view that submission was ingenuous. Paragraph 37 appeared at the conclusion of his Honour's analysis of the reasons he was able to accept the cash from jobs case. It was clearly a summation of, among other matters, his Honour's conclusion that the respondent was engaging in tax avoidance. 115 This analysis is supported by a later passage in the judgment where the primary judge referred (at [43]) to the respondent's evidence that he paid tax. His Honour was not prepared to accept that evidence (see [44]). Once again, it might have been thought, that his Honour's rejection of this aspect of the respondent's evidence would have cast doubt upon the respondent's credibility and, therefore, on the cash from jobs case. Be that as it may, his Honour's conclusion that the respondent's statement he was paying tax was not credible, supports the proposition that he had concluded the respondent was engaged in tax avoidance. 116 The primary judge's acceptance (at [37]) of the cash from jobs case, albeit contained in the credit section of his judgment, was the sheet anchor of his conclusion that the respondent was in the course of employment when he was assaulted. His Honour relied (at [72]) upon his acceptance of the cash from jobs case when he considered the course of employment issue. At this stage his Honour also considered (at [73]-[76] the appellant's argument that the earlier inconsistent versions of the assault recorded in the claim form and related to the insurance investigator were to be preferred to the carrying cash case which later emerged. He dealt with those versions (at [77]) again, by relying upon his acceptance of the cash from jobs case. After referring to other arguments which do not require consideration, his Honour concluded (at [89]) that the assault occurred in the course of the respondent's employment. 117 It is plain, in my view, that the primary judge was only able to reach his conclusion that the assault took place in the course of employment because he had accepted the cash from jobs case, a finding which critically depended upon the respondent being engaged in tax avoidance. That finding, in turn, depended upon the premise that tax avoidance was endemic in the building industry presumably (although the primary judge did not advert to this factor) at the time the respondent was assaulted. Whether or not the latter premise was open to his Honour, a matter with which I deal below, there was no evidence that the respondent was engaged in tax avoidance. 118 I cannot agree with Tobias JA (at [48]) that the primary judge's reference (at [34]) to tax avoidance did not form "the, or an, evidentiary basis" for his finding that the respondent was carrying cash for wages when assaulted and, therefore, was injured in the course of his employment. There would have been no reason for his Honour's reference to tax avoidance had it not been intended (as, in my view, it in fact did) to provide an evidentiary basis for his conclusion in favour of the respondent. 119 The primary judge's conclusion lacked an evidentiary foundation in a critical respect. This was an error of law, which vitiated the ultimate decision.

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.

Conclusion 142 I do not think it appropriate, as Mr Neil submitted, that this outcome means there be a judgment for the appellant. The respondent should not be deprived of the opportunity to have his case considered on a basis he advances rather than one devised by the primary judge. 143 Finally, I observe that nothing in this judgment should be read as acceptance of the proposition that the respondent was engaged in tax avoidance. As I have said the factual basis of that inference was not explored at trial. Orders 144 I would make the following orders:

(2) Award entered in favour of the respondent, to the extent it relates to the assault, be set aside. (3) Matter remitted to the District Court of New South Wales for rehearing on the application for compensation in relation to the assault.

(4) Respondent to pay the costs of the appeal and to have a certificate under the Suitors' Fund Act 1951 if otherwise qualified. 145 CAMPBELL A-JA: I agree with Tobias JA. **********

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