Day v The Ocean Beach Hotel Shellharbour Pty Ltd

Judgment 1Julia Day was at the Ocean Beach Hotel in Shellharbour on a Friday evening, 4 July 2008. She was approached by a person whose job included keeping security in the hotel and asked to leave. I do not need to go into the transaction between Julia Day and the security person, but Julia Day says what happened is that the security person pulled a chair from under her and she fell onto the floor. She injured herself in that fall. 2Julia Day commenced a case in the District Court. She sued the hotel, the Ocean Beach Hotel Shellharbour Pty Limited, which is the first defendant, and she sued the licensee of the hotel, Karma Elliott-Cosmos, who is the second defendant. In addition, she sued the company responsible for the security at the hotel as third defendant, Checkmate Security International Pty Limited. 3I have heard evidence so far from Julia Day and some exhibits have been tendered and admitted into evidence. There has been no appearance at the hearing on the part of the third defendant, despite being called. Information conveyed to me by counsel suggests that it is unlikely that the third defendant will be taking any part in these proceedings any more. 4After his client's evidence had finished, counsel for Julia Day, Mr E Chrysostomou, tendered two bundles of documents. They were admitted on the voir dire as VDB and VDC. In order to understand the significance of these documents, I need to add that the police brought a prosecution against Julia Day in the Local Court at Wollongong for various offences, including refusing to leave licensed premises. For this purpose, the police took statements from the second defendant, Karma Elliott-Cosmos, from another employee of the first defendant hotel, as well as from the security person who, Ms Day alleges, was the one who pulled the chair from under her. 5The case went to court and Ms Day was convicted. She appealed all of the convictions. One of the appeals was allowed and the conviction set aside and she received a nominal penalty for the other two convictions. 6The point of referring to that prosecution is this. Exhibit VDB comprises the three statements taken by the police from the licensee, the hotel employee (whose name is Hayley May) and the security person (whose name is Matthew Leonard James). It seems as though the statements from Ms Elliott-Cosmos and Ms May were taken a few days after the incident, on 7 July 2008. The statement from Matthew James was taken some months later, on 27 October 2008. 7Exhibit VDC comprises a selection of pages of transcript from the evidence given by those three persons - Ms Elliott-Cosmos (the second defendant in this case), Ms May and Mr James - before the learned magistrate in the Wollongong Local Court. 8Mr Chrysostomou tenders specific parts of VDB and VDC which he has highlighted and he argues that they amount to admissions made on behalf of the defendants and are, therefore, admissible under s81 or s87 of the Evidence Act 1995 (NSW). One argument which Mr Chrysostomou originally relied upon was an argument under section 64 of the Evidence Act but in the end he did not press it. 9Mr W S Reynolds of counsel, who appears for the first defendant hotel and the second defendant licensee, objects to the tender of VDB and VDC. His objections can be broadly classified as the following four. He says that the plaintiff has not complied with certain court orders or procedural expectations which mean that the documents ought to have been served or in some way drawn to the notice of his clients before they were tendered. Secondly, he says that the plaintiff should be bound by her forensic decision not to serve these documents. Thirdly, he says that the documents which are now tendered, or at least the admissions which the documents are said to contain, ought to have been pleaded by the plaintiff and were not. Finally, he says that the documents do not contain any admissions as such. 10It is important in approaching the resolution of the tender of these documents to have an appreciation of what is in issue in the case, or at least to grasp a particular issue in the case. In her statement of claim, in [7], Julia Day says that "on 4 July 2008 a servant and/or agent of the first, second and/or third defendant assaulted the plaintiff in the premises by forcefully and suddenly pulling a bar stool from underneath the plaintiff as she was sitting." In response to that pleading the defence filed on behalf of the first defendant hotel and the second defendant licensee pleads in [7] that they "deny that their servants and/or agents assaulted the plaintiff in the premises ... in the manner alleged, or at all." In [8] in "further answer to paragraph 7 of the statement of claim", the first and second defendants plead that "in the event it was the first or second defendant's servant and/or agent who allegedly assaulted the plaintiff (which is denied), the conduct alleged took the servant and/or agent outside the scope of any service or agency and the first and second defendants have no liability for the conduct alleged." 11It can be seen that those paragraphs in the defence put at least two matters in issue. The first matter is the allegation that Mr James was the servant or agent of the first or second defendants. The second is whether anything that Mr James did was outside the scope of any service or agency between him and the first and second defendants. Having said that, I now turn to Mr Reynolds' and Mr Chrysostomou's arguments. 12I add as part of this judgment - which I have indicated during the course of the arguments - that I have been greatly assisted by the competent and helpful arguments presented by both counsel. 13Mr Reynolds' overall position is that the plaintiff has made a forensic decision to come to trial, holding these documents which she now wishes to tender. His point is that the plaintiff knew that she could not prove her case, at least against his clients, without some evidence of employment or agency between Mr James and his clients. There seems to be some force in that argument because after the close of Ms Day's evidence there did not seem to be much, if any, evidence at all of such agency or employment. It did appear to me that evidence linking Mr James to the hotel and the licensee needed to be presented before the close of the plaintiff's case. In other words, as I say, I think Mr Reynolds is right to say that the plaintiff appreciated that one way or another she had to get in evidence from one or more of these three persons. 14Mr Reynolds points to the forensic decision which he says was not to serve the statements. The non-service, for reasons which I will come to, Mr Reynolds argues should result in their non-admissibility. He compares it with a decision by a plaintiff not to pursue a claim for an extension of time against a limitation period which was denied when evidence was forthcoming that the plaintiff deliberately elected not to pursue the proceedings at an earlier stage. I should say I do not accept that argument because that seems to be an issue about substantive or procedural rights, whereas the issue in this case is about the tender of evidence. Nevertheless, Mr Reynolds says as part of the context of his arguments that the plaintiff should be bound by her forensic decision. 15I will now turn to one of Mr Reynolds' other points, namely his assertion that the plaintiff has not complied with certain orders of the court and procedural expectations. This argument is based upon a consent order signed on behalf of the parties, made by the court on 27 January 2011. Clause 3 provides as follows: "The plaintiff to serve all medical and liability evidence by 31 March 2011." Mr Reynolds says that that consent order is plain in its terms. Liability evidence, he says, means what it says. The evidence which is being tendered by Mr Chrysostomou is liability evidence. It is evidence of admissions made or claimed to have been made on behalf of Mr Reynolds' clients which would affect their liability in this case. Mr Reynolds pointed to the correspondence which proceeded between the parties before the orders were made. Exhibit VD1 was a letter from the plaintiff's solicitors to the solicitors instructing Mr Reynolds, which enclosed a set of draft proposed consent orders. The draft included a clause to the same effect, indeed in the same terms, as that which appeared in the final orders. 16Both Mr Reynolds and Mr Chrysostomou referred to a letter from the plaintiff's solicitors to the solicitors formerly acting for the third defendant, dated 10 January 2011, in which the plaintiff's solicitors referred to the same proposed consent orders as "the usual consent orders/directions". It is clear from exhibit VDF that the consent orders, which were made on 27 January 2011, were made at what the court regarded as a pre-trial conference. 17Mr Reynolds pointed out that the terms of the originally proposed order from the plaintiff's solicitors to his solicitors did not change between the proposal and the order which was eventually made by the court at the pre-trial conference. 18Both counsel referred to Practice Note DC (Civil) 1, entitled "Case Management in the General List", issued by the Chief Judge on 28 August 2009. Mr Reynolds pointed out that in clause 3.1 the Practice Note provides that the proposed consent orders which a plaintiff should send to the defendant with the statement of claim "must be drafted specifically for each case". He argues that there can be therefore no confusion about the meaning of liability evidence when it appears in the eventual consent order. 19Mr Chrysostomou, on the other hand, argues that the meaning of liability evidence as it appears in the consent order is expert liability evidence; it does not include lay evidence. He too draws support from Practice Note 1 which provides for a pre-trial conference in category 5. Clause 5.7 provides that the court "will give directions for the service of expert reports under rule 31.19 UCPR at the pre-trial conference". This, he says, supports his argument that the meaning of liability evidence is limited to expert liability evidence. He further supports his argument by reference to category 3 in clause 3.4 which provides for service of primary medical reports and qualified experts "who will prepare reports, including any liability or economic loss expert." He says it is clear that what had occurred in this case was that the orders contemplated and made by the court were orders to do with expert evidence. 20I should add that both parties agreed that I could have reference to the correspondence as part of the surrounding circumstances representing the facts known to the parties at the time that the orders were made in accordance with Campbell J's decision (as his Honour then was) in Kirkpatrick v Kotis (2004) 62 NSWLR 567 at 579 and Cassaniti v Paragalli [2006] NSWSC 50 at [18]. 21Mr Chrysostomou further supports his argument by saying that the reference to the usual orders in the letter from his solicitors should be understood in the context of the Practice Note as being a reference to expert reports. In addition, he contrasts this procedure with a procedure envisaged by the UCPR where a court can make provision for hearings to proceed by way of statements under UCPR 31.4. However, Mr Reynolds argues that when one looks at UCPR 31.4 that is simply not relevant because it provides for evidence-in-chief being given by reference by that statement and the witness being there. I think Mr Reynolds is right. I do not think Mr Chrysostomou can get any support from UCPR 31.4. 22So far as the exhibit VDB is concerned, which are the statements provided by the witnesses to the police, it is common ground that those statements were produced under subpoena issued by one of the parties. Mr Reynolds points to category 6 in Practice Note DC 1, particularly cl 6.3, which provides for the parties to inspect all documents produced under subpoena "and serve any documents on which they rely before the status conference". Mr Reynolds argues that this is a further example of non-compliance by the plaintiff with the expected procedures in conducting a case such as this. Mr Reynolds argues that the documents which are tendered are inadmissible simply by virtue of the claimed non-compliance by the plaintiff with these orders and procedural requirements. He points to the significance of the Practice Note being for case management and the importance which the court places on case management for the efficient conduct of a trial in accordance with s56 of the Civil Procedure Act 2005 (NSW) and argues that the effect of non-compliance should be dealt with by my discretion not to admit the evidence. It is part of my implied power which I have to regulate the conduct of proceedings before me. 23I do not accept that argument. To my mind, the admissibility or otherwise of what is tendered turns on the provisions of the Evidence Act in a case such as this. There are provisions in the Evidence Act, such as section 135 and section 192, which provide for circumstances where a party may be prejudiced or unfairly dealt with or where leave is required for a party to be absolved from some form of non-compliance. In my opinion, it is by reference to the Evidence Act and the criteria which that statute provides that I should make the decisions about the tender of these documents. 24I am of the view on balance that the consent order made on 27 January 2011, specifically clause 3, does not require the service of statements or material such as that contained in exhibits VDB and VD3. Despite what Mr Reynolds argues with some persuasiveness about the plain terms of the clause, to my mind - in the context of the correspondence between the parties and the terms of the Practice Note, which include clauses 3.4 and 5.7 - that order is not an order for the service of lay evidence. 25However, I think Mr Reynolds is right in his argument about reliance on clause 6.3 of the Practice Note. That clearly provides that a party should serve any documents upon which they rely, which have been produced under subpoena. I would regard the plaintiff as being in breach of that expectation insofar as the plaintiff is tendering exhibit VDB. I will return to that issue later. 26Mr Reynolds' next argument is that the material contained in exhibits VDB and VDC ought to have been pleaded. They are, he argues, admissions which UCPR 14.7 and 14.14 require pleading. There was tendered as VD3 correspondence between the parties concerning particulars. Mr Reynolds' solicitors asked Mr Chrysostomou's solicitors by letter of 13 December 2010 the following question: "How is it alleged that the person described in paragraph 7 was a servant and/or agent of the first or second defendant and what facts, matters and circumstances are alleged to give rise to the allegation?" The response came from Mr Chrysostomou's solicitors dated 25 February 2011 and the relevant part reads as follows: "It is clear from the evidence given in previous court proceedings involving the criminal aspects of this matter that the person described in paragraph 7 was an employee of the third defendant, but servant and/or agent of the first and second defendant on the basis that whilst employed by the third defendant he took instructions and directions from either the second defendant directly and/or servants and/or agents of the first defendant whose duties included the giving of directions to security personnel." 27Mr Reynolds argues that these are an example of "footprints in the sand", an expression he adopted from the judgment of Allsop J (as his Honour then was) sitting in the Federal Court of Australia in White v Overland [2001] FCA 1333 at [4]. It did not provide his clients with sufficient information about the plaintiff's reliance upon what turned out to be admissions. Mr Reynolds further argued that the admissions themselves ought to have been pleaded as facts pursuant to the UCPR. Mr Reynolds argues that I will have to come to the point of finding whether or not the admissions were made. It would be a very important finding for the purposes of this case and ought to have been pleaded in the statement of claim, or at least particularised. I do not agree with that submission. To my mind UCPR 14.7 clearly provides that "a party's pleading must contain only a summary of the material facts on which the party relies, and not the evidence by which those facts are to be proved." 28Mr Reynolds' further reliance upon UCPR 14.14 is somewhat stronger. He says that the admission should have been pleaded specifically because it is a matter which takes his client by surprise. 29Mr Chrysostomou on the other hand argues that the admissions are evidence, not facts, and not the kind of material that falls within UCPR 14.14(1)(3). This is, of course, an inclusive list not exclusive but Mr Chrysostomou argues that the kind of pleading envisaged by that rule would be something such as issue estoppel or res judicata. I think Mr Chrysostomou is right. I think that there is a distinction here between the facts which his client is relying upon and the evidence by which he proposes to prove those facts. The admissions which he is going to rely upon are the kind, which as he in my opinion correctly argues, are admissions under the Evidence Act. They are not admissions of a kind which would constitute some kind of defence to the claim. In any event, I am of the opinion that the information provided by way of particulars by the plaintiff's solicitors to the first and second defendants' solicitors clearly puts the first and second defendants on notice of the kind of evidence which will be led. It not only pointed to the source of that evidence, namely the evidence given in the previous court proceedings, but also referred to the third defendant who, the plaintiff claimed, "took instructions and directions from either the second defendant directly and/or servants and/or agents of the first defendant, whose duties included the giving of directions to security personnel". That description to my mind clearly alerted the first and second defendants to the likelihood not only of reliance upon evidence being given in the previous court proceedings, but that the nature of that evidence would likely include things said by the second defendant or on behalf of the first defendant. 30For those reasons I am of the view that it was not necessary for the plaintiff to plead in substance what are the admissions contained in exhibits VDB and VDC. In any event they were sufficiently particularised. I do not regard the reference to the court proceedings as "footprints in the sand" because I accept Mr Chrysostomou's submission that the defendants could have sought copies of the transcript from the plaintiff's solicitors or taken steps to obtain the transcript themselves. They were clearly on notice that the plaintiff was going to rely upon evidence that was part of the Local Court proceedings. 31Mr Reynolds' next argument is that the material contained in exhibits VDB and VDC do not amount to admissions. He says they amount to a narrative either in the form of police statements or evidence. The statements in exhibit VDU were representative of material taken in the furthering of a police enquiry and were not an admission as such. He also relied upon an argument that they did not fall within the terms of s87(2) of the Evidence Act so far as his defendants were concerned in that Mr James, when he made his statement on 27 October 2008, could not be said to have the authority to act for his clients. 32Mr Chrysostomou argued that in any event the statement of Mr James was admissible against the third defendant. No one is here to argue to the contrary. He says once Mr James' statement and evidence in the lower court is admitted against the third defendant, then it is in for all purposes. I am not inclined to accept that argument. The provisions which he relies upon in tendering this material are provisions of the Evidence Act dealing with admissions. The admissibility of admissions is dealt with in section 87 - or at least that is one of the provisions which Mr Chrysostomou relies upon - and it provides for admissions by a party. In other words, Mr Chrysostomou is seeking to tender against the first and second defendants things said on behalf of the third defendant. To my mind he needs to demonstrate that the evidence should be admissible against the first and second defendants for the reasons or by reference to the criteria referred to in section 87, and I do not accept his argument in that regard. 33However, nor do I accept Mr Reynolds' arguments that the material does not amount to admissions made on behalf of his client. Here it is important to bear in mind the distinction I made by reference to the pleadings. Two separate issues in this case are whether or not Mr James was an agent of the first and second defendants and, if so, whether or not he was acting within the scope of his agency. Whilst what was said by the second defendant and the other person, Ms May, who was employed by the first defendant, may or may not be relevant to the second issue, they are clearly relevant to the first. The passages which I have in mind are those highlighted by Mr Chrysostomou in exhibit VDB. They are relevant to the matter put in issue by the first and second defendants of any agency or employment relationship between them and Mr James. 34I return to Mr Reynolds' argument that anything said by Mr James was not admissible against his client because it cannot be shown that when he made the representation he had authority to act for the party. The test provided for by s87 of the Evidence Act is whether "it is reasonably open to find that ... the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person's employment authority." I have no difficulty in determining that the statements made by Ms May fall into that category, because she says that she is an employee of the first defendant. Nor is there any difficulty with Ms Elliott-Kosmos' statements because, as Mr Chrysostomou argues, they fall within direct admissions under section 81 of the Evidence Act. At the time that Mr James acted as he is claimed to have acted on 4 July 2008, it seems to me that it is reasonably open to find that he had authority to act for both the first and second defendants. 35However, the representation that was made by him, as I said on 27 October - some three and a half months after the events in question - is another matter. Mr Chrysostomou points to earlier passages in Mr James' statement in exhibit VDB which indicate that he still, at the time of making the statement, was employed by the third defendant "who provides security guards" to the first defendant. He also points to evidence of Mr James given at the Local Court in exhibit VDC where at T14 Mr James was asked the following question: "Q. Then how long roughly to use your best estimate after this incident being 4 July 2008 that you stopped or ceased working at the hotel? Would it be weeks, months? A. I probably stopped - it'd be months, yeah, it'd be months." Mr Chrysostomou argued that given that evidence and the evidence that at the time of making the statement he still worked for the third defendant, coupled with no reference in the statement to no longer working at the Ocean Beach Hotel, which he said he did, it would be reasonably open for me to find that at the time that he made the representation he had authority to act. 36On balance I accept that argument. It would be open to go either way in that decision or finding. I rely upon the reference to "months" in the transcript and no reference to ceasing work made in the statement. He was still employed at the time by Checkmate. Even if he had ceased working at the first defendant at the time that he made the statement on 27 October 2008, I would still regard it as reasonably open to find that he would have authority to act in giving a police statement following an incident at the hotel which resulted in the prosecution of someone the first and second defendants regarded as appropriately discharged from the premises - as having authority to make that and within the scope of that authority. 37Accordingly, I am satisfied that the material tendered by Mr Chrysostomou amounts to admissions made by or on behalf of all of the defendants. 38Mr Reynolds points to exhibit VDC which contained the passages which Mr Chrysostomou tenders from the transcript. He correctly points out that not all of the transcript has been tendered. There are gaps between the pages which are tendered. Mr Chrysostomou argues in reply that all he is tendering are the relevant passages and that he can make available the whole of the transcript. I think that is an appropriate response. I expect that once the whole of the transcript is provided to Mr Reynolds, if he wanted to tender some additional passages which throw light on anything said relevantly by the witnesses, then he could do so. 39I regard it as important that the police statements were produced under subpoena. That means they are available to all parties. I note that they were available to the plaintiff before the defendants, but in due course I accept that the defendants must have had access to the statements. In addition, they were put on notice by the plaintiff's particulars that reliance would also be placed upon evidence in the Local Court. 40Therefore, to the extent that the plaintiff needs leave for any non-compliance, I would grant the plaintiff leave to tender the evidence. I would not regard it as being unfair to the defendants. I regard the evidence as important. They are factors which I take into account under section 192 of the Evidence Act. 41To the extent that Mr Reynolds argues that the tender of the material would be unfairly prejudicial to his clients under section 135 of the Evidence Act, I note the significant burden which a person objecting to such a tender has, as pointed out to me by Mr Chrysostomou. The probative value of the material is obviously substantial. I do not regard the defendants as unfairly prejudiced for the reason that they were on notice of the existence of the material. 42For the reasons which I have given, I admit into these proceedings exhibits VDB and VDC.