Jaqueline Isabell McLennan v Insurance Australia Limited

THE EVIDENCE: ISSUES FOR TRIAL AND THE APPLICATION 6In relation to the evidence of Ms Reisz shortly stated, it provides some background to the litigation. The evidence from Ms Reisz in part supported in the pleadings and also from the evidence of Mr Endries, is that the plaintiff had an insurance contract with the defendant, the insurance contract related, as I understand it, to the building and contents of a property located at 171 Edward Street, Orange, on 27 December 2006, a fire occurred at that property causing damage to both building and contents and thus prima facie invoking the terms of the insurance policy given by the defendant to the plaintiff, the owner of the property, in respect of loss arising from fire damage and related matters. 7A claim was made by the plaintiff in relation to the insurance contract or the policy on the following day after the fire, 28 December 2006. The claim of the plaintiff, as Ms Reisz makes clear in her evidence, was refused because the defendant/applicant concluded that the claim was not genuine. I need not go into the detail of that. The plaintiff has commenced proceedings against the defendant consequent upon that refusal to recognise the claim in circumstances I will outline in a moment. 8It is clear from the evidence from Ms Reisz and other sources that the defendant wishes to cross-examine the plaintiff on some of the material withheld to support its case that the fire which damaged the insured property was intentionally lit with the consent of the plaintiff by persons known to the plaintiff or persons known to the plaintiff to have resided within the property. It is asserted in the evidence and in submissions that the material withheld would not advance the plaintiff's case and if made available to the plaintiff would allow the plaintiff to tailor or endeavour to tailor her evidence upon the hypothesis advanced by the defendant that the plaintiff is not genuine in her claim. 9The defendant proposes to defend the proceedings on numerous bases which I will outline shortly. The evidence from Ms Reisz in her affidavit and given orally also establishes that parts of the withheld material are not known to the plaintiff. The parts not known to the plaintiff, it is reasonably understood by the defendant, include all of the material contained within the evidence, that is proposed to be relied upon from witness 1 and some of the material from witnesses 2 and 3. 10The evidence of Mr Endries reiterates some of the above, but also provides details as to other witnesses who it proposes to call and whose evidence is not being withheld. I have not been given evidence as to whether the relevant affidavits or other evidentiary material relating to those proposed witnesses has already been served upon the plaintiff. That matter is neither here nor there given the character of the application and the need obviously to determine the issues that the applicant wishes to have determined. 11The estimate of the applicant is that the contested hearing will take ten days, largely because of the character of the defendant's case and related matters and that ultimately it requires the fixing of the matter as a special fixture and, if to be heard over a ten day period, it will require hearing of the matter either in Sydney or in Orange. 12The plaintiff's case is set out in the Further Amended Statement of Claim filed. Essentially the claim by the plaintiff alleges that the building and contents policy or policies held by the plaintiff in respect of the building and contents on the property located at 171 Edward Street, Orange, was operational and in effect at relevant times, that the fire on 27 December 2006 causing damage to the building and contents invoked the terms of the agreement between herself and the defendant, that the claim made by the plaintiff was refused by the defendant and in doing so the defendant wrongly neglected and/failed and/or refused to pay out on the building and contents claim or claims under the policy or policies and that the defendant breached its statutory obligation to pay such claims as had been made by the plaintiff and was in breach of the policy of insurance in wrongfully refusing to indemnify the plaintiff for damage and loss caused by the fire. 13The defendant identifies six "inter-related defences", as it describes them in its written submissions on this application, to the plaintiff's claim of breach of contract. Those six defences may be summarised as follows. Firstly, the plaintiff will be unable to discharge her evidentiary and persuasive burden of establishing on the balance of probabilities the matters requiring proof by her, firstly, that the property and contents were damaged in a way that results in the policy responding and the defendant breached the policy by failing to pay the claim. 14Secondly, the defendant pleads that in breach of the policy the plaintiff was not truthful and frank in statements made in the claim or connection with the claim. Thirdly, the plaintiff did not pass on any additional information requested by the defendant nor did the plaintiff provide the defendant with all information, documents and help that the defendant needed to deal with the claim. 15Fourthly, the plaintiff breached her duty of utmost good faith pursuant to s 13(1)(3) Insurance Contracts Act 1984 (Cth). Fifthly, the plaintiff does not have an entitlement to any benefit under the policy as the fire damage was started with the intention of causing damage by the plaintiff or by someone who entered the property with the plaintiff's consent. Sixthly, the claim is a fraudulent claim within the meaning of s 56(1) Insurance Contracts Act 1984 to which I earlier referred. 16The events that have excited this Motion may be seen in the orders that were made, as I understand it, by Judge Toner SC in this Court on 14 February 2011 coincidentally, I point out, although it is of no significance, the same date that affidavits were being obtained from witnesses 1, 2 and 3. I must confess I do not understand how these orders were allowed to be made in the context of the chronology as I understand it. The proceedings before his Honour appear to have been a waste of this Court's precious time. 17Be that as it may, amongst the orders that were made by his Honour was that the plaintiff was to serve its evidence including any expert evidence on or before 8 April 2011. The applicant/defendant was to serve any evidence upon which it proposed to rely on or before 6 May 2011. If the defendant sought to be relieved of that obligation then it was to file and serve a motion returnable for the sittings commencing on 30 May 2011. His Honour further noted that if required to be specially fixed, that motion could be returnable at that sittings and that is precisely what happened with the motion being dealt with on the first day of the sittings. 18In the very helpful written submissions prepared on behalf of the defendant by Mr Young, aided by his oral submissions, it was pointed out, and I do not believe relevantly challenged, that in order for the plaintiff to make out her case she must prove on the balance of probabilities that the fire occurred in a manner that results in the insurance policy responding. If the plaintiff failed to do so the defence would be made out and the plaintiff's claim would fail. I will come back to that aspect of the matter in the context of what I was told is the character of the contract between the parties. 19Only if the plaintiff is able to discharge the burden upon her would the defendant then be required to establish the various matters to which I referred to, particularly the last five of the six matters I previously identified. Thus, the plaintiff must prove her case on the balance of probabilities unaffected by the defendant's subsequent burden to prove the allegation of fraud but he did not cite authority for that proposition. 20It was submitted that the applicant's case relies upon an investigative assessment of the facts surrounding the events alleged by the plaintiff to give rise to the claim. Furthermore, it is submitted that the success of these defences will depend upon "the results of cross-examination" of the plaintiff, this being a reference in part to the judgment of Barrett J in the decision of Kon v AMP Life Insurance [2006] NSWSC 957, and, of course, the successful cross-examination of other witnesses in the plaintiff's case. Although at this stage I was led to believe that the principle witness in the plaintiff's case is in fact the plaintiff herself and there are no other witnesses. 21It was submitted, in accordance with what Barrett J had said in Kon , that "the defendant intends to put various factual propositions to the plaintiff which go to credit and certain facts in issue". It was submitted on behalf of the applicant that it was sought to preclude the plaintiff from inspecting material that would not advance the plaintiff's case, but would rather put the plaintiff on notice of some "allegedly suspicious circumstances and enable (her) to tailor or endeavour to tailor (her) evidence" ( Markus v Provincial Insurance Company Limited (1983) 25 NSWCCR 1 per Clark J, then a Judge in the Commercial Division of the Supreme Court.) 22It is for these reasons that the applicant submits that the Court ought to make an order that the applicant be relieved from serving this evidence upon the plaintiff until after the close of the plaintiff's case.

CONSIDERATION OF THE EVIDENCE AND SUBMISSIONS 23In relation to the determination of this matter, apart from the evidence contained within the confidential affidavit, the affidavits of the two legal practitioners to whom I have referred and taking into account the oral evidence arising from the cross-examination and re-examination of Ms Reisz, I have also read the affidavit that has been filed by the plaintiff in accordance with the orders of his Honour on 14 February 2011. Apart from evidence relating to formal matters concerning ownership of the property, a claim that there was an existing contract and the like, as I understand the evidence foreshadowed in the affidavit, the plaintiff will assert in her case that she was not present when the fire started and has no personal knowledge of its cause and is not responsible for it. 24In relation to witness 1, as I understand the evidence that is admissible in any future proceeding, that witness would give evidence on matters of background or context from that witness' first hand knowledge from observation and experience. That witness would also give evidence of hearsay representations made to that person, by a person other than the plaintiff, in respect of matters that the defendant would say go to the question of the circumstances in which the fire occurred. 25I should point out for the record that I was somewhat displeased with the form of the affidavit of witness 1. There were forty-seven paragraphs in that affidavit. When push came to shove when I pressed Mr Young (and I do not blame him for this as he did not take the material or settle the affidavit) there were less than ten paragraphs that might reasonably be said to be relevant and admissible in relation to the issues at trial, although I am prepared to accept some of the other paragraphs may provide some background material that might give rise to some cross-examination. 26Witnesses 2 and 3 would give evidence of matters from first hand observation and expertise. It became apparent, because their previous statements to police were tendered as part of the confidential material, that they gave statements in respect of a criminal prosecution of the plaintiff, the details of which are only in a very summary way available to me. The best I can understand, without knowing precisely what charges or charge was laid against the plaintiff although understanding that they related to the circumstances of the fire, is that the charge(s) brought against the plaintiff were either dismissed or withdrawn. 27It is clear from the evidence available from Mr Reisz and the date of the swearing of the affidavits on my very cursory understanding of the criminal prosecution that the evidence contained within the affidavits came to light after the criminal prosecution had closed in whatever circumstances it did. Certainly each of the three affidavits for witnesses 1, 2 and 3, as I understand the material, were sworn on 14 February 2011. Thus, as I have earlier pointed out, none of the potential evidence that might be relevant and admissible has been previously made available to the plaintiff in any other form. It would seem most of the potential evidence of witnesses 2 and 3 would be reasonably known to the plaintiff because that material I would have expected had been made available to the plaintiff in the course of the criminal prosecution. However, some of the matters contained in the affidavits are not found in the statements to police. This additional new information as it might properly be categorised, came to light, as I understand the evidence, on 14 February 2011 when witnesses 2 and 3 were interviewed by a solicitor in the employ of the solicitor for the defendant. 28There is no explanation in the affidavits as to why this additional or new evidence was revealed on that date and not previously revealed when those two witnesses (that is witnesses 2 and 3) had an earlier opportunity to provide what appeared to me to be quite detailed statements. It seems to me, although ultimately it is not a matter of any moment, that the matters additional or new in the affidavit evidence ought to have been contained within the statements given to police given the fact that on its face, in respect of witnesses 2 and 3, it is information that was relevant to the police investigation, although not necessarily relevant to implicating the plaintiff as having been the person who caused the fire. 29In respect of one witness there were three paragraphs in the affidavit sworn that provided additional information to that contained within the statement that the witness provided to police. This is in the context of a thirty-two paragraph affidavit. The two affidavits largely follow in many respects the form of the statements of which I have no comment. 30In relation to the evidence before me there are two other matters, or at least one other matter to mention, although I cannot obviously deal with all of the evidence. I certainly have not got a transcript of what transpired yesterday. I was provided as an exhibit, the "Product Disclosure Statement and Policy Booklet" provided by NRMA Insurance in respect of the policy held or claimed to be held by the plaintiff. I was informed and I have no reason to doubt this, that the matters that requiring proof by the plaintiff were set out at page 8 of the Policy Booklet and that Policy Booklet states at page 8 that if the home or contents suffer loss or damage caused by fire under the contents policy, the insurer will replace or repair damaged contents and under the buildings insurance will rebuild or repair that part of the home that is damaged. 31However, the insured will not cover loss or damage as a result of fire caused with the intention of causing damage by "you" or someone who lives in "your home" or who has entered into "your home" or site with "your consent" or the consent of a person who lives in "your home". There are other matters set out at page 8 and, as I understood what was put to me by Mr Young, those are matters that form part of what the plaintiff must prove in order to receive the benefit of the insurance contract. 32The exclusions to liability are set out at page 36 of the "Policy Booklet". Particularly the Booklet states that the insurer will not cover nor will be liable for loss or damage arising from "any intentional act or omission by the insured or the insured's family or a person acting with the consent of the insured or the insured's family", as well as other matters set out in page 36. It can be seen by what I was told by Mr Young in reference to the Booklet that, in part, the matters correctly identified in the defendant's submission as having to be proven by the plaintiff do overlap with relevant exclusionary provisions set out in the contract. 33For that purpose I was referred to Secure Funding Pty Limited v Insurance Australia Limited [2010] FCA 1094, particularly in a judgment of Middleton J which deals directly an insurance contract of the same character as the contract with which I am concerned. That judgment makes it clear in its terms that which a plaintiff seeking to enforce the contract would need to establish and what a defendant pleading fraud or other breach of contract would be required to prove under the exclusionary principles. 34The principles that I need to apply in considering the application sought by the applicant to withhold the evidence contrary to the order made his Honour on 14 February are set out very helpfully and accurately in the written submission aided or supplemented by the oral submissions of Mr Young. If I might just briefly refer to parts of the written submissions, Mr Young noted that in Markus v Provincial Insurance Company Limited Clark J, as I said earlier, considered where the interests of justice would be served by allowing one party to inspect a document that contained material that would not advance that party's case, but rather would put that party on notice for some "allegedly suspicious circumstances and enable them to tailor or endeavour to tailor their evidence" if they were not genuine. I have already referred to this as being the basis for the application in part. 35In that matter, Clark J said that the interest of justice were "against the requirement that there be production [because] it is clear that the only purpose ... to be served by letting the plaintiffs to see this documentation would be to put them on notice of the allegedly suspicious circumstances". Although the facts of Markus are not particularly pertinent, it is to be borne in mind Markus was a case as I understand it, concerned with objection being taken to the production of material sought under subpoena and the matters the subject of the objection, which were subsequently withheld by his Honour from the subpoenaing party, were considered of such a character as to be capable of putting the plaintiff or plaintiffs on notice of matters that the defendant would wish to cross-examine the plaintiffs and to adduce evidence about at a later time. 36Mr Young referred to Santow J's judgment in Broadwater Taxation and Investment Services Pty Limited v Hendricks which is an unreported decision of the New South Wales Supreme Court from 8 and 9 September 1993. Inter-alia his Honour stated that the test for being relieved from serving evidence until the close of an opponent's case will be satisfied if the evidence "will not advance the opponent's case and that if so made available prior to the completion of cross-examination ....... enabled the opponent to tailor or endeavour to tailor their evidence to meet such evidence". 37Justice Santow held that allowing access to the evidence, designed to test the other side's evidence, prior to trial would deprive that party of a legitimate forensic advantage. Thus the interests of justice dictated that the party ought be relieved of serving its evidence until the close of the opponent's case. 38In Kon to which I earlier referred, Barrett J held that two elements should be satisfied before the Court will order that a party be relieved from serving its evidence until the close of an opponent's case. The first element was that the material was not of a kind that would assist the deprived party in the formulation and presentation of its own case. It was of such a nature that it could be of assistance only to the applicant, that is the insurer, and depending upon what came out of the deprived party's case (that being the plaintiff) it might not even be relied upon for that purpose. In other words the evidence in question might "after the close of the deprived party's case be seen as of no use in any event". His Honour said, "the second point was that the material was of such a nature that it would if made available, tend to tempt the deprived party to tailor its evidence or at least to consider doing so" [10]. This is another way of stating the test that was promulgated by Santow J in the Broadwater case to which I earlier referred. 39I am mindful of the fact that there is no requirement that the Court should determine whether a party is genuine or not, nor is there any requirement for the Court to determine the likelihood that a party will tailor or endeavour to tailor their evidence. This is because it is not possible at this interlocutory stage to test whether in fact the withheld or deprived party would tailor or endeavour to tailor their evidence. 40I was taken to Halpin and Ors v Lumley General Insurance [2009] NSWCA 372. In that matter the Court of Appeal considered the principles arising from Markus and other cases in light of the terms of the Civil Procedure Act . This case was an appeal against an order made at first instance where Hoeben J withheld evidence from 'the Insured' on bases advanced by the insurer very similar to the current matter. Hoeben J applied the so-called " Markus " decision of Clark J in exercise of his discretion to withhold the evidence, I particularly refer, amongst other parts of the judgment, to paras [40] - [43] and also [60] - [70]. The Court, primarily in the decision of Sackville AJA, upheld his Honour's decision. Justice Sackville took into account, as I do, the very real disadvantage suffered by 'the Insured' in not having access to the evidence, as did Hoeben J. 41On appeal the insured had contended that the primary Judge had erred in holding that the " Markus discretion" still existed, that it could apply to evidence or material relevant to a matter respect of which the party resisting access bears the onus of proof, that it could apply to evidence, or material, relevant to a positive case to be made by the parties seeking access and, once satisfied, that there was a risk of the insured tailoring her evidence the " Markus discretion" should be exercised, unless the insured could persuade his Honour to the contrary generally speaking. 42The Court of Appeal held against those various contentions made on behalf of 'the Insured'. The Court discussed the power that gave rise to the " Markus principles", as they were described, and referred to a number of decisions subsequent to Markus confirming the power exercised by the trial Judge in the matter on appeal. In each of the instances referred to by their Honours, and I refer generally to [77] - [86], the Court of Appeal noted that these cases to which his Honour referred generally upheld the proposition that denial of access by one party to another, where no issue of privilege arose was in particular circumstances an appropriate exercise for the discretionary power of the court and that that power previously exercised in the pre- Civil Procedure Act area was still available, notwithstanding the terms of the Civil Procedure Act . 43Sackville AJA discussed the terms of the Civil Procedure Act and its Rules in the judgment. I particularly note the terms of s 56 dealing with the overriding purpose of the Act and the rules of the Court in their application to civil proceedings is to facilitate the just quick and cheap resolution of the real issues in the case and that the Court must seek to give effect to the overriding purpose when it exercises any power given to it by the Act or by the rules and when it interprets any provision of the Act or such rule (s 56(1)(2)) Civil Procedure Act 2005. 44Sackville AJA also noted, as I do, s 57(1) which states that for the purpose of furthering the overriding purpose referred to in s 56(1) proceedings in any Court are to be managed having regard to the objects or the following objects as set out in that sub-section, firstly the just determination of the proceedings, the efficient disposal of the business of the court, the efficient use of available judicial and administrative resources, the timely disposal of the proceedings and all other proceedings in the court at a cost affordable by the respective parties. 45Further his Honour referred to as do I, s 58(1) where the Act states that whether to make an order or direction for the management of proceedings, including any matter contemplated of course by the exercise of the power which I am called upon to exercise in this matter, I must have regard to the various considerations not stated exclusively which go to the issue of the Court acting in accordance with the dictates of justice. I need not set out the various matters particularised in s 58 (2), but they include having regard to s 56 and 57 and other matters. I note also the terms of s 59 and 60, 61 and 62 as they are discussed by Sackville AJA. 46His Honour also referred, in addition to those sections that I have briefly referred to, to rules 2.1, 2.2, 2.3 and 31.1 which I need not dilate upon. His Honour noted at [89] that both the CP Act and the Uniform Civil Procedure Rules (the UCPR), confer extensive powers on the Court to make orders for the pre-trial management of proceedings. The most significant matters for present purposes, he said, were powers that the court can give directions as it thinks fit whether or not inconsistent with the rules of the court for the speedy determination of the real issues between the parties. The Court at any time can give directions for the conduct of any proceedings as appeared convenient for the just, quick and cheap disposal of the proceedings including orders relating to the delivery and exchange of evidence and the like. 47His Honour in confirming that the Civil Procedure Act did not operate to deny the power to make a Markus type order, noted that the powers were not unlimited, that there were proper qualifications to be noted. For example, such as set out in s 61 of the Act, that the power under the Rules to make directions, whilst expressed broadly, is conditioned by the requirement that the rules be made for "the just, quick and cheap disposal of the proceedings". He also noted that the Court in exercising its power to make directions must seek to give effect to the overriding purpose in s 56(1) of the CP Act, that is to "facilitate the just, quick and cheap resolution of the real issues in the proceedings". Also, he noted that s 57(2) of the CP Act require the Act and the UCPR to be construed and applied so as to best ensure the attainment of the objects set out in s 57(1). And I need not reiterate those objects. 48His Honour discussed the criteria set out in s 56 - 58 and also noted that the CP Act does not expressly afford paramountcy to the just determination of the proceedings although this is the first object stated in s 57(1) of the Act. His Honour went on to note that if the Court considers that an order permitting one party to withhold affidavit or other material from the other party pending the trial is likely to assist in the speedy determination of the real issues between the parties or is likely to advance the just, quick and cheap disposal of the proceedings, it is has the power to make the order. 49Whether the order is appropriate in a particular case will depend on a number of considerations including the application to the circumstances of the case, of the criteria set out in s 56(1) and the dictates of justice as set out in s 58(2). Generally I have regard to 90 - 96 of the judgment. His Honour went onto to discuss the policy issues relating to the exercise of the power which I need not dilate upon and, as I said, concluded that a power existed to make the order under the Act. His Honour also addressed, as learned counsel for the applicant has addressed, the question of onus. Again I need not dilate upon that. 50Particular attention in reply to the submissions of the plaintiff/respondent to this application was had by Mr Young in respect of [113] of the judgment in Halpin . Sackville AJA, when reflecting upon the mandatory considerations of the Act and the object of the "just determination" of the proceedings requires the court in making a judgment on this matter to pay particular attention to questions of onus or proof, said: "For example if one party is permitted to withhold material that is central to a critical issue on which it bears the onus of proof, but has little or no significance in other issues, there may be a serious risk of disruption to the trial and of fairness to the other party. But the Court's power to direct that a party be permitted to withhold certain material from the other party until after the trial has commenced is not constrained by any principle of the kind propounded by the Insured in the present case. Thus merely because the material withheld from the Insured might have some relevance to an issue which the Insurer bears the onus does not mean that the direction should not have been made" [114]. 51In relation to the Insured's affirmative case, his Honour said at [115]: "It is no doubt for these reasons, the courts considering the so-called "Markus discretion" have taken into account whether the withheld material could advance the opposing party's affirmative case. By parity of reasoning, matters identified in s 56 and 57 of the CP Act are likely to require a court dealing with the application to withhold material pending trial to give consideration to whether the material supports the affirmative case for the party denied access and, if so, whether acceding to the application will cause injustice". 52In relation to the issue of the exercise of the discretion, I note the terms of [117] and [119] of the judgment. 53Apart from the submissions I have already referred to, the applicant's submissions essentially were that the material which the defendant will seek to adduce cannot possibly assist the plaintiff's case and generally that could be seen to be so. Specifically the success of the plaintiff's case is inherently dependant upon the plaintiff's ability to prove on the balance of probabilities damage to the property and other matters particularised in para 25 of the submissions. Conversely the success of the defendant's case is inherently dependent upon the plaintiff's inability to prove those matters and the proof of matters relevant to the case pleaded by the defendant. And I have taken that into account. 54With regard to the oral submissions of the defendant, most of them I have already dealt with. I have already pointed out the fact that the evidence sought to be adduced is relevantly new evidence and I have already dealt with the fact that one witness produces potential evidence that would be entirely new, two of the witnesses produce evidence which would be partially new. It was conceded in submissions as I understood it that one resolution of the matter may be making the material available only to the solicitors for the plaintiff, but in reality that would create an impossible "Chinese wall" for Mr Manwaring the solicitor for the plaintiff to hold up. I have taken into account all the submissions of the defendant. 55The plaintiff acknowledges her disadvantages, did not expressly assent to what the defendant submitted was to be proven by the plaintiff, but generally did not make any specific submissions to the contrary. The plaintiff's Senior Counsel submitted, however, there was a real risk of disruption to the proceedings arising out of the introduction of material in the course of the trial in respect of which the plaintiff has not been placed on notice. It was also submitted that the material might be regarded as lacking credibility when there was no explanation as to why the new material came to the attention of the applicant after the criminal proceedings had concluded and I was taken to various passages in Halpin on matters of principle. 56The claim was made, of course that the material in question, as the solicitor for the defendant made clear, had been made available to police subsequent to the affidavits being sworn. But I believe the point made by Mr Young in reply is valid, that access would be denied to the plaintiff if an order was made in accordance with para 1 of the notice of motion given what in reality happened in Markus .

CONCLUSION 57In consideration of all these matters I have ultimately decided that I should decline to make the order sought in the context of the principles that I am required to apply, as encapsulated in Halpin , particularly in the context of the powers that exist under the CP Act. The primary reason for declining to make the orders is that I have had to consider the evidence sought to be withheld in the light of the evidence filed by the plaintiff and the other evidence available as to what the plaintiff would seek to establish. Ultimately, I am not satisfied that the applicant has relevantly established, the onus for the application resting with the applicant, that the material would, if made available, "tend to tempt" the plaintiff to tailor her evidence, or at least consider doing so. 58On the evidence filed, the plaintiff, as I said, will be the only material witness to matters relating to her knowledge of the circumstances in which the fire occurred. The proposed evidence of witness 1 which was specifically identified by learned counsel for the applicant amongst the barrage of inadmissible material, relates to representations essentially made to a third party not in the presence of the plaintiff. The plaintiff could scarcely be expected to be able to comment directly or indirectly upon the circumstances of the making of the representation. Not only would she not be able to comment upon the circumstances of the making of the representation but would not be able to in any way suggest that the representation sought to be relied upon for hearsay purposes central to witness 1's affidavit had in fact not been made. 59Of course, I cannot dismiss the possibility of her being able to provide evidence of surrounding circumstances that touch upon the reliability and/or credibility of the representor and the representee (that is witness 1). But as I said, in my view on the understanding of the material before me, the plaintiff could not tailor her evidence on the central issue upon which witness 1's evidence relates. 60There is a question as to whether given the circumstances of the making of the relevant representation and the circumstances in which the material comes forward whether the material is admissible in any event. Naturally for the purposes of determining this application I assume that it is admissible. 61As for the element of surprise in cross-examination there is a real risk in my view that the cross-examination upon the material will be unproductive. The inability of the plaintiff to comment upon the making of the representations as opposed to the background of the dramatis personae suggests that so far as witness 1 is concerned, what could be gleaned in cross-examination would be of little value. 62Evidence from witnesses 2 and 3 is material upon which the plaintiff could not tailor her evidence, concerned as it is with observations of events occurring in the presence of the witnesses but in the absence of the plaintiff. As it is additional or new evidence from these particular witnesses, as I have explained, to my mind, in the context of the other material they have already provided I would assume to the plaintiff, it contains little revelation when it is properly analysed. Many of the suspicious aspects of the fire that give rise to the refusal of the claim and then the case as pleaded by the defendant, are already known as I understand it to the plaintiff, judging from the statements that were obtained by the police from witnesses 2 and 3 without the aid of any other material. 63In any event, the material withheld, it can be fairly said, may in at least one aspect be a matter that falls within the ambit of what needs to be established by the plaintiff, but ultimately that is a matter of no moment in this decision. 64In respect of the additional or new material sought to be withheld, I note the three deponents swore their affidavits on the same day. Nothing can be made of that because there is no suggestion of impropriety in that occurrence. Two of the deponents have a professional relationship with one another. The material has come forward however over four years after the fire and after the police investigation is closed. It seems given the terms of s 56 to 61 and particularly having regard to the terms of s 56 and 57 to which I have referred from the CPA, given the expected length of the proceedings by the applicant itself, there is a real risk that if the material was withheld and was not revealed until either cross-examination, if in fact the material could relevantly be the subject of cross-examination, or was first produced to the plaintiff after the plaintiff's case is closed, there would be considerable disruption to the proceedings. This would prolong the proceedings and add to the cost of the proceedings in quite unnecessary circumstances. 65I could foresee quite reasonably that the plaintiff may be forced to seek an adjournment to make enquiries to determine whether, particularly in relation to witness 1, there may be further evidence that may need to be led in reply at least that reflects upon the credibility of witness 1, the circumstances in which witness 1 claims to have been the beneficiary of representations made by another person or which may reflect upon the opportunity indeed for the representations to have been made. 66In relation to this matter, as I said, I note the rather extraordinary length of time that it took for the new material or additional material to emerge, particularly given that two of the three witnesses in my view had ample opportunity to reveal the additional material before the taking of instructions from them to enable the affidavits to be sworn in February 2011. 67It follows from what I have said that the condition precedent, or one of the conditions precedent, required to be established in order to warrant the exercise of the discretion available to withhold the evidence has not been satisfied by the applicant. In addition, I am not satisfied that the withholding of the evidence will lead to a just and expeditious disposal of the proceedings. The prospect of disruption of the proceedings to enable the plaintiff to properly attend to and produce relevant evidence as to matters concerning the circumstances of the witnesses, or the evidence they give, is a matter that I have taken into account, even though in light of the test as it has been discussed, for example by Barrett J, the applicant's claim fails "in limine". 68There is just one last matter I wish to deal with and it concerns witness 1. The defendant/applicant states through its witnesses that it would wish to cross-examine upon some of the material set out in the affidavit. I have already made comments about the fact that much of the affidavit contains second hand or third hand or fourth hand hearsay that on any understanding of the Evidence Act , would not be admissible. 69In determining this matter I understand, of course, that even third or fourth hand hearsay may still provide some basis, or avenue, for cross-examination in respect of relevant subject matter, the subject of the representations. I bear in mind that in any event the affidavit having been provided by witness 1 to the applicant it would not stop it from cross-examining the plaintiff upon the material, if ultimately the affidavit of witness 1 was not served, on the basis that the defendant for tactical reasons or whatever chose not to call witness 1 to give evidence. 70But on the material identified by Mr Young, particular centring my attention on para 35 which seems to be the high water mark of relevant material contained within the affidavit of witness 1, even accepting as I said earlier that the evidence may be prima facie admissible, ultimately another problem that might arise is that if the material was excluded when it was sought to be led, because of discretionary powers available to a Court under the Evidence Act particularly s 135 and 136 of the Evidence Act , it might on one view of it seem hardly just and fair that prior cross-examination of the plaintiff could occur upon material the integrity of which can never be tested and which, in its terms as I said, might ultimately be excluded. I emphasise that I assume the evidence is admissible. But the reality is that, particularly in relation to witness 1, part of the material sought to be relied upon (in fact the central part of the material) might ultimately never be admitted into evidence if witness 1 was called to give evidence about that matter.

ORDERS 71Thus, in the circumstances as I have outlined them, I decline to make orders in accordance with para 1 of the motion. With regard to the issue of the expedited hearing or the listing of the matter as a special fixture, I reserve the Court's position on that matter subject to making further enquiries. I appreciate the legal representatives of the applicant are in court today and I would certainly attend to that matter quickly but it may be a matter where I might need to communicate with the applicant's solicitors through Mr Campbell if that be convenient and I will make an appropriate order in relation to the listing of the matter as a special fixture at such time as I am able to get sufficient assistance from the listing authorities for the List Judge in Sydney. Thus, in relation to this matter I make the following direction. 72I order that the defendant is to serve the evidence upon which it intends to rely at the hearing of the matter on or before 28 June 2011 or such later date as is fixed by the Court to enable the defendant to properly pursue its appeal rights from this decision. I will not make any orders in relation to the matter being specially fixed at the moment. I reserve on that matter. 73I order that the defendant pay the plaintiff's costs of and incidental to the motion that I have dealt with today. And I grant liberty for either party to apply in seven days notice. 74REES: Your Honour, might I clarify one matter? In order 1 was that order just to serve, not to file and serve? 75HIS HONOUR: I can't hear you. 76REES: Sorry in relation to order 1-- 77HIS HONOUR: Yes. 78REES: --was the order just to serve evidence not to file and serve? 79HIS HONOUR: What is required, I don't know what - just bear with me what orders did his Honour make? His Honour require filing and serving of evidence? No just serving, not filing. 80REES: Thank you. 81HIS HONOUR: They're the orders originally made there was no requirement to file in the original orders of Judge Toner and I have a copy of the "consent" order, the draft orders that were handed up by Mr Young and it merely relates to serving the evidence and that's all I've said for the evidence to be served, there's no requirement to file it-- 82REES: Thank you. 83HIS HONOUR: --on or before the date but what I'm trying to give effect to in the order is that if there is to be an appeal against my decision and there's further time required for the filing of the appeal then naturally the defendant would not be required to serve the evidence until such time as the matter has been resolved by an appellant court otherwise it defeats the whole purpose of an appeal. So I just want to make it clear that if there's further time required that can be granted. Maybe I could amend that order to say by 28 June or until such time as the matter is resolved on appeal to the Court of Appeal or some other court, something along those lines but I'll perfect that order to give effect to what I indicated to Mr Young in relation to the matter. 84REES: Thank you. 85HIS HONOUR: Right is there anything else? 86REES: Nothing further your Honour. 87HIS HONOUR: Sorry to keep you so late it's half past five. I'm sorry to keep the court staff back particularly the court reporter who has to travel back to Bathurst. So I wish her well in her travels and I will adjourn the court until 9.30 tomorrow. 88ADJOURNED

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 September 2011