" Admissions made with authority
(1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that:
(a) when the representation was made, the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made; or
(b) when the representation was made, 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 or authority; or
(c) the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party.
(2) For the purposes of this section, the hearsay rule does not apply to a previous representation made by a person that tends to prove:
(a) that the person had authority to make statements on behalf of another person in relation to a matter, or
(b) that the person was an employee of another person or had authority otherwise to act for another person, or
(c) the scope of the person's employment or authority."
8 Because reference was made, in connection with s 87, to s 15 of the Partnership Act, I shall set out that section also:
"An admission or representation made by any partner… concerning the partnership affairs, and in the ordinary course of its business, is evidence against the firm."
9 It will be seen that s 15 of the Partnership Act requires consideration of whether the admission or representation said to have been made by a partner and tendered against the partnership was one "concerning the partnership affairs" and made "in the ordinary course of [the partnership's] business". Thus, in the case of s 15, attention is focused, among other things, on the circumstances in which the admission is made, so as to enable the question to be answered: is it made in the ordinary course of the partnership business?
10 By contrast, I think, s 87 of the Evidence Act focuses simply on the time when the "previous representation" was made and on the authority of the person at that time either to make statements or (para (b)) otherwise to act in connection with the subject matter of the previous representation.
11 Further, the purpose of s 87 is that set out in the initial words of subs (1): to enable the Court to determine "whether a previous representation made by a person is also taken to be an admission by a party". Paragraphs (a) to (c) of subs (1) set out three alternative bases upon which the representation "is" to be admitted. They do not require a concluded finding of the relevant authority or common purpose. They merely require a conclusion that such a finding be one that "is reasonably open".
12 I should mention at this stage that the plaintiffs did not rely on para (c).
13 As I have said, Mr Peck was a partner at the time that the s 597 examinations were conducted. (I have referred, as did the parties, to s 597 examinations; but it is necessary to bear in mind that Mr Peck was examined pursuant to a summons issued under s 596A, because he was at the relevant time a director of NCRH and there was no doubt that he might be able to give evidence concerning its examinable affairs.)
14 It is clear that, in many at least respects, the law of partnership is a branch of the law of principal and agent: see National Commercial Banking Corporation of Australia Limited v Batty (1986) 160 CLR 251, 260 (Gibbs CJ); Walker v European Electronics Pty Ltd (in liquidation) (1990) 23 NSWLR 1, 10 (Gleeson CJ).
15 As James LJ put it in Re Agriculturist Cattle Insurance Co (1870) LR 5 Ch App 725 at 733:
"As between the partners and the outside world...each partner is the unlimited agent of every other in every manner connected with the partnership business, and not being in its nature beyond the scope of the partnership."
16 In the present case, I must proceed, I think, on the basis of the plaintiffs' pleaded case against Phillips Fox relating to the firm's alleged s 10 liability for the matters alleged against Mr Peck in his capacity as a director of NCRH. In other words, I must proceed upon the basis that it may be found that Mr Peck did accept the office of director either in the ordinary course of the business of Phillips Fox or with the authority of his co-partners, so as to render the co-partners liable under s 10. To do otherwise would be to fall into the error of deciding, on a question of admissibility, a fundamental issue in the case: see Merrylands Bowling, Sporting and Recreation Club v P&H Property Services [2001] NSWCA 358; Dubbo Base Hospital v Jones [1979] 1 NSWLR 225.
17 It follows that, if the plaintiffs make out their pleaded case (as I have very summarily, and no doubt inadequately, described it), they will make out that Mr Peck was "the unlimited agent" of the other partners in Phillips Fox relating, among other things, to that part of the business of Phillips Fox that was connected with, or effected by, his accepting the office of director of NCRH and acting in that capacity. It follows from that, in my view, that in that capacity (I stress, hypothetical rather than assumed, but one that must be taken to be "reasonably open"), it is reasonably open to find that when Mr Peck made the representations in his s 597 examination that the plaintiffs now tender against Phillips Fox, he had authority to make statements in relation to those matters on behalf of Phillips Fox.
18 Equally, I think, it follows on the same basis that at the time of the s 597 examinations, Mr Peck had authority to act for Phillips Fox and the representations contained in the s 597 transcripts are, or it is reasonably open to find that they are, representations relating to matters within the scope of his authority as a partner.
19 In this context, as I have said, I regard paras (a) and (b) of s 87(1) as focusing on the time at which the relevant representation is made, not (as might be the case under s 15) on the means by which it is made (or, in this case, obtained or extracted). I think that this is deliberate. What the legislation requires is that the court consider, at the time that the relevant representation was made, the authority of the person making it. But it is apparent that the authority to be considered is not authority to make the particular representation but authority "to make statements...in relation to the matter with respect to which the representation was made" (para (a)) or "authority otherwise to act for the party" in relation to that matter.
20 Thus, I think, the legislation is looking at the general authority of the person whose previous representation is sought to be tendered to make statements of the kind embodied in the particular representation, and not at the authority to make the particular representation (including in the circumstances in which it was made and having regard to the means by which it was made).
21 Thus, as I have said, I think that the legislative scheme under s 87 stands in clear contrast to that in s 15 of the Partnership Act, which at least arguably would require the Court to look, among other things, at the precise way in which the relevant admissions or representations were made, to see if the manner of their making can be said to be "in the ordinary course of [the partnership's] business."
22 That proposition having emerged in argument, Mr Dick of counsel, who with Mr Watson of counsel appeared for Phillips Fox on the hearing of this question, called in aid the proposition that a general provision of a statute should not be taken impliedly to repeal a specific provision in another statute.
23 There is no doubt that the principle of construction that Mr Dick called in aid is well known, and one that has been frequently applied. However, as Windeyer J pointed out in Cobiac v Liddy (1969) 119 CLR 257 at 268, the question is not one to be "answered by maxims".
24 In the present case, there is no doubt that the legislature intended to codify the confused state of the common law relating to the law of evidence. It sought to draw together, in clear statutory form, many principles of the common law; but, at the same time, it sought in many cases to amend those principles. Thus, to take two examples only, the Evidence Act makes very substantial changes to the common law dealing with hearsay, and substantial changes to the common law dealing with opinion evidence.
25 In those circumstances, I think, to the extent that there is some inconsistency between s 87 and s 15, the fact that s 15 appears in a statute dealing specifically with partnerships should not be used to read down or narrow the application of s 87. Otherwise, one would have the somewhat unusual situation that in all cases of agency other than agency flowing from partnership, the question of admissibility of admissions would be determined by s 87, whereas in the case of partnerships it would be determined by legislation passed over 100 years earlier. It is very difficult to see why legislation aimed at part in clarifying the law of evidence should be taken to have such a confusing result in the particular case.
26 I therefore conclude that, to the extent that there is some inconsistency between the two regimes and to the extent that, therefore, the later regime may impliedly repeal the earlier, the presumption to which I have referred should not prevent that conclusion from being given effect.
27 For those reasons, I think, the evidence is admissible against Phillips Fox. As I have said, I do not propose to consider the other bases upon which the plaintiffs press the tender.
28 That does however give rise to the general question of discretion. Although s 87 says that the court " is to admit the representation" if it makes the necessary finding, I do not see that as overriding, or excluding the application of, s 135.
29 In the present case, the statutory regime by which the examinations were conducted included that Mr Peck was entitled to be represented at the examination, but Phillips Fox were not. The representation entitlement given to an examinee included a right for the representative to re-examine the examinee and to seek to clarify, or otherwise comment upon, answers given. Thus, such unfairness as there may have been in the statutory scheme by which examinations were conducted was ameliorated, to some extent, in the case of an examinee. However, that unfairness was not necessarily ameliorated in the case of persons against whom the transcript of the examination is tendered.
30 It has been a well-understood application of the concept of natural justice that the right to a fair trial ordinarily involves the right (within the control of the Court) to test evidence adduced against a party. See GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No. 3) (1990) 20 NSWLR 15. That right is not completely uncontrolled; and, for example, the Evidence Act itself contains provisions limiting the way in which cross-examination may be conducted.
31 Nonetheless, I think, deprivation of the right is capable of producing significant unfairness to a party. It is of course in the very nature of admissions that they are made in circumstances in which the party against whom they are tendered does not necessarily have the opportunity of testing them.
32 However, I think, there is some difference in scope between a one-off admission on the one hand and admissions obtained through the compulsory process of Pt 5.9 of the Corporations Law on the other. In the latter case, the examiner (the liquidator or the liquidator's counsel) will have had ample opportunity to prepare for the examination, including by amassing all relevant documents and by obtaining information from other witnesses. They are then in a position to examine (in truth, cross-examine) the examinee with the benefit of all that preparation. That, I think, is qualitatively different to admissions made in a casual context, in the first category to which I referred earlier.
33 I therefore conclude that it would be unfairly prejudicial to Phillips Fox if the transcripts were admitted against them without them having the opportunity to cross-examine Mr Peck.
34 Mr Peck is a defendant in these proceedings and has put on a statement of evidence. However, he may choose not to give evidence: in other words, his statement may not be tendered. I do not know, and I see no basis upon which I could put him, or his counsel, to a present election. If Mr Peck does give evidence in his own case, then it will of course be open to Phillips Fox to cross-examine him, and the cross-examination may extend, among other things, to relevant matters in the s 597 transcripts. But if Mr Peck does not go into the witness box in his own case, Phillips Fox would be deprived of that opportunity. That, as I have said, would be a significant detriment.
35 In the circumstances, I think, that is a detriment that could be addressed by giving Phillips Fox (in the event that Mr Peck does not give evidence in his own case) leave to issue a subpoena requiring him to give evidence, and to call him in their own case, and further giving them leave to examine him by leading questions.
36 One of the submissions that Mr Dick put for Phillips Fox was that if the transcripts were admissible and were to be admitted, it should be on condition that the plaintiffs call Mr Peck. Clearly enough, that was aimed as producing a situation whereby Phillips Fox would have an opportunity of cross-examining Mr Peck. I do not think that it is appropriate to require the plaintiffs to call an adverse party, particularly where, as against that party, they have the benefit of admissions in the s 597 transcripts. However, I think, the mechanism that I have proposed will produce precisely the same effect, with the presently inconsequential difference that it may be Phillips Fox rather than the plaintiffs that are liable for such costs as may be incurred by Mr Peck in attending on the subpoena which, by hypothesis, Phillips Fox may have to issue to secure his attendance for cross-examination.
37 For these reasons, I think, the transcripts of Mr Peck's examination should be admitted into evidence. However, to cure the prejudice that would flow to Phillips Fox if those transcripts were admitted without being tested, I propose that they should be admitted upon the condition that Phillips Fox have liberty, if Mr Peck does not give evidence in his own case, to call Mr Peck pursuant to subpoena and to examine him by leading questions. If for whatever reason, that course having become necessary and Mr Peck being unable to appear, Phillips Fox cannot cross-examine him, then I would reserve to Phillips Fox leave to reopen the question of the tender of the transcripts.
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