Lei v Lei

EXPERT EVIDENCE - Whether expert certificate admissible under s 177 of the Evidence Act? - Whether hearsay contents of expert certificate admissible under s 60 of the Evidence Act? - Whether hearsay contents should be excluded under s 136 of the Evidence Act?

1 This is an application by the plaintiffs to tender an expert certificate ('the Expert Certificate') of Mr Hongliang Liu and attached affidavit and expert report pursuant to s 177 of the Evidence Act 2008 ('the Act'). Mr Liu is a lawyer with legal qualifications in China and Australia. He has been admitted to practice as a lawyer in China since 1992 and is currently based in Shanghai as Special Counsel of Hunt & Hunt Lawyers. His evidence relates to policies of Chinese trade and foreign exchange and ownership of certain companies.

2 Section 177 of the Act provides as follows:

(1) Evidence of a person's opinion may be adduced by tendering a certificate (expert certificate) signed by the person that -

(a) states the person's name and address; and

(b) states that the person has specialised knowledge based on his or her training, study or experience as specified in the certificate; and

(c) sets out an opinion that the person holds and that is expressed to be wholly or substantially based on that knowledge.

(2) Subsection (1) does not apply unless the party seeking to tender the expert certificate has served on each other party -

(a) a copy of the certificate; and

(b) a written notice stating that the party proposes to tender the certificate as evidence of the opinion.

(3) Service must be effected not later than -

(a) 21 days before the hearing; or

(b) if, on application by the party before or after service, the court substitutes a different period - the beginning of that period.

(4) Service for the purposes of subsection (2) may be proved by affidavit.

(5) A party on whom the documents referred to in subsection (2) are served may, by written notice served on the party proposing to tender the expert certificate, require the party to call the person who signed the certificate to give evidence.

(6) The expert certificate is not admissible as evidence if such a requirement is made.

(7) The court may make such order with respect to costs as it considers just against a party who has, without reasonable cause, required a party to call a person to give evidence under this section.

3 The first and second defendants accept that the plaintiffs effected service of the Expert Certificate with notice of the plaintiffs' intention to tender the certificate as evidence of the opinion. The first defendant responded by stating that she did not require the plaintiffs to call the expert witness to give evidence.

4 The first defendant objected to the admission of the Expert Certificate on the basis that she alleged that it was inconsistent with a finding of the Administrative Court of China and other matters going to its accuracy. The third defendant only doubted the accuracy of one aspect of the certificate. Neither the first nor third defendant made any submission relevant to the admissibility of the Expert Certificate.

5 The issues surrounding admissibility of the Expert Certificate and, in particular Chinese company searches attached to it, fall to be determined by reference to the following sections of the Act:

(a) s 48(1)(f) as to whether the company searches are admissible as 'public documents';

(b) s 69 as to whether the company searches are admissible as to the truth of their contents;

(c) s 60 as to whether operation of the exception to the hearsay rule permitting admissibility of otherwise inadmissible contents as evidence not merely of the basis for an expert's opinion, but as evidence of the facts asserted, should be limited in respect of the Expert Certificate and its attachments generally under the discretion in s 136.

Admissibility of company searches as 'public documents' under s 48(1)(f) of the Act?

6 The Expert Certificate attaches company searches purportedly printed by the Shenyang Company Registration Authority which it is submitted are records kept by that authority as public documents forming part of the Authority's records and are imprinted with the seal of the authority. The company searches related to Shenyang Machinery Import and Export Company Huamai Branch, Shenyang Machinery Import and Export Company and Shenyang Technical Import and Export Company Limited. Translations of the search results were also attached to the Expert Certificate.

7 'Public documents' is defined in the Dictionary of the Act to include a document that 'forms part of the records of a person or body holding office or exercising a function under or because of ... a law of a foreign country'. With respect to public documents, s 156(1) of the Act provides:

(1) A document that purports to be a copy of, or an extract from or summary of, a public document and to have been -

(a) sealed with the seal of a person who, or a body that, might reasonably be supposed to have the custody of the public document; or

(b) certified as such a copy, extract or summary by a person who might reasonably be supposed to have custody of the public document -

is presumed, unless the contrary is proved, to be a copy of the public document, or an extract from or summary of the public document.

8 The company searches purport to have been sealed by the Shenyang Municipal Industrial Commercial Affairs Consultation Center, which in my opinion is a body that might reasonably be supposed to have the custody of such public documents. In the absence of evidence to the contrary, the company searches are presumed to be public documents.

9 Section 48(1)(f)(ii) provides as follows:

A party may adduce evidence of the contents of a document in question by tendering the document in question or by any one or more of the following methods -

(f) if the document in question is a public document - tendering a document that is or purports to be a copy of the document in question and that is or purports to have been printed -

...

(ii) by the authority of the Government or administration of the State, the Commonwealth, another State, a Territory or a foreign country ... .

10 Accordingly, the company searches are admissible as public documents, pursuant to s 48(1)(f)(ii), because they purport to be copies of public documents and to have been printed by the authority of a foreign country.

11 I note that the requirements of s 49 with respect to service of a document in a foreign country has been satisfied by the service on the defendants of a copy of the documents proposed to be tendered not less than 28 days before the day on which the evidence was sought to be adduced.

Admissibility of company searches as to the truth of their contents under s 69 of the Act?

12 Counsel for the plaintiffs submitted that, pursuant to the exception to the hearsay rule in s 69(1), the contents of the searches are admissible as to the truth of their contents because the document:

(a) forms part of the records belonging to or kept by a body or organisation in the course of, or for the purposes of, a business (s 69(1)(a)(i)); and

(b) contains a previous representation made or recorded in the document in the course of, or for the purposes of that business (s 69(1)(b)).

13 Clause 1 of Part 2 of the Dictionary provides that:

A reference in this Act to a "business" includes a reference to the following -

...

(d) an activity engaged in or carried on by a person holding office or exercising power under or because of... a law of a foreign country, being an activity engaged in or carried on in the performance of the functions of the office or in the exercise of the power ... .

The definition of business is to be construed liberally.[1] In my opinion, the company searches are business records within the meaning of s 69 of the Act, because the evidence in the affidavit and expert report of the Mr Liu satisfies the requirements of s 69(1).

14 Section 69(2) provides as follows:

The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made -

(a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or

(b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.

For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person's knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact).

15 The court is permitted to draw inferences from the form of the document and from the nature of the information contained in it, in determining whether the document was made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.[2]

16 On the basis of the expert evidence, and from the form of the searches and the nature of the information contained in them, I consider that the requirements of s 69(2)(b) have been satisfied; and that the company searches are admissible as to the truth of their contents.

Admissibility of company searches as an exception to the hearsay rule under s 60 of the Act?

17 I further note that s 60 of the Act provides as follows:

(1) The hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of an asserted fact.

(2) This section applies whether or not the person who made the representation had personal knowledge of the asserted fact (within the meaning of s 62(2)).

(3) However, this section does not apply in a criminal proceeding to evidence of an admission.

It is settled law that the effect of this section is that representations in an expert report, which might otherwise be excluded as hearsay, are admissible not merely to establish the basis for the expert's opinion; but also as evidence of the facts asserted.[3]

18 The question came for consideration in a similar context before the Full Court of the Federal Court of Australia in Quick v Stoland Pty Ltd.[4] The appeal was from a judgment in favour of a corporation's creditor against a director on the finding that debts were incurred when there were reasonable grounds to expect that the company was not able to pay its debts as and when they became due. The solvency of the company was a relevant issue and the creditor relied upon the evidence of a chartered accountant who expressed his opinion based on financial records of the company and other documents provided to him. These documents included financial records not received into evidence before the primary judge.[5] It was noted by Branson J that the '... report identified the material upon which he relied and set out the important aspects of the reasoning process which led to his forming the opinions expressed in his report'.[6]

19 The appeal against the admission of the expert report and reliance upon the financial records, which had not been otherwise proved, was dismissed. However, Branson J stated:

In cases where there is a genuine dispute as to the relevant facts, it might be expected that a court would ordinarily limit the operation of s 60 of the Act by exercising the power vested in it by s 136 of the Act.[7]

In many cases the extraordinary effect of s 60 would be unfair to the party against whom the evidence is tendered. For example, where the hearsay involves 'facts' that are in conflict or 'facts' that are unreliable it is quite unsatisfactory for those 'facts' to be proved by the operation of s 60. One way in which this problem can be overcome is by an order under s 136 limiting the use to be made of that evidence.[8]

20 I do not consider I should exercise the discretion under s 136 of the Act for the following reasons:

(a) The company searches are purportedly official government records in respect of the relevant companies which are commonly relied upon in Australia to establish facts with respect to company structures.

(b) The defendants have had notice of intention to rely on the records for over six months and the first defendant has specifically chosen not to require the witness to attend for cross-examination.

(c) Although the first defendant seeks to dispute the facts in the company searches she has not provided any admissible evidence to contradict the information contained in the searches.

(d) The cost of establishing the relevant facts with evidence from China would be very substantial.

21 Accordingly, I propose to admit the Expert Certificate together with its attachments as to the truth of their contents.

[1] Valoutin Pty Ltd v Furst [1998] FCA 339; (1998) 154 ALR 119, 129 (Finkelstein J).

[2] Evidence Act 2008 s 183; Rickard Constructions v Rickard Hails Moretti [2004] NSWSC 984 [19] (McDougall J).

[3] Moran v Amoret Installations Pty Ltd [2000] NSWCA 106 [6]-[7] (Heydon JA with whom Meagher and Giles JJA agreed); Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225, 237-238 [75] (Campbell JA with whom Basten JA and Handley AJA agreed); also see Australian Law Reform Commission, Evidence (Interim), Report No 26 (1985) vol 1, 375 [685].

[4] [1998] FCA 1200; (1998) 87 FCR 371 (Branson, Emmett and Finkelstein JJ).