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 .